Fool me once shame on you. Fool me twice shame on me.

Fool me once shame on you. Fool me twice shame on me.

One of the things that is supposed to help the president’s reelection chances is a reduction in the unemployment rate.

Historically, no sitting president has been reelected with an unemployment rate as high as we have now, so the spin we are hearing goes more or less like this:
1. It was Bush’s fault;
2. At least it’s getting better.

The first is both a waste of time and the bore because the president has very little impact on the unemployment rate.

The second is the more interesting because, if true, it might represent the best the incumbent can do and he should be judged accordingly.

But what if it isn’t true? And what if all we need is a little long division to figure it out?

Getting people to read even a short article about long division is the kind of thing that should be on the most insidious journalism school exams.

At the end of 2007, participation in the labor force was 66% of the available working age population, with a labor force of 146.2 million.
By the end of 2011, it was 64%, with a decrease of 5.4 million workers to 140.8 million. The official number of unemployed people rose from 7.7 million at the end of 2007 to 13.1 million at the end of 2011, without any accounting for those who were “too discouraged to look for work.”

Nevertheless, as the government has included fewer and fewer people in the category of searching for work, the official unemployment rate continues to fall because both the numerator and the denominator used to make that calculation are losing equal amounts.

In fact, the January BLS report that was so joyfully received by the market showed an Unemployment Rate of 8.3% but a decrease in labor force participation to 63.7% because another 1.2 million people left the labor force. They gave up.

Which figure is more important?

The number of people working divided by the number of people who haven’t given up trying.

Or

The number of people working divided by the total number of available.

The second number matters more and it is getting worse.

Fool me once shame on you. Fool me twice shame on me.

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Haven Pell

At the conclusion of the Constitutional Convention of 1787, a woman asked Benjamin Franklin, “Well, Doctor, what have we got, a republic or a monarchy?” Without hesitation, Franklin replied, “A republic, if you can keep it.”

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