On Friday, the government reported that the economy added a less-than-anticipated 96,000 jobs in August, and that the unemployment rate dropped from 8.3 to 8.1 percent, primarily because so many Americans stopped looking for work.
Fox News Sunday host Chris Wallace asked economists close to the Romney campaign and the Obama administration what those numbers meant, and which candidate has the best plan for revitalizing what both sides concede is an anemic recovery. Predictably, their answers suggest that numbers matter less in economics than the prism through which they are viewed.
Through the Republican prism, the August jobs report offers further proof that the Obama administration agenda is responsible for one of the weakest economic recoveries on record. If you subtract the roughly 2 million jobs created by Federal Reserve policies such as “quantitative easing,” the White House record looks even weaker. President Obama’s plan to raise taxes on high-income taxpayers would only make matters worse, Republicans say.
“We've seen deep recessions in the past where recoveries even from very deep holes were much more vigorous. The problem is the administration has pursued the wrong policies,” said Glen Hubbard, an economic adviser to the Romney campaign.
He touted Romney’s tax reforms, which include across-the-board tax cuts, deep cuts in corporate taxes, and entitlement reforms such as raising the age of retirement and reducing the Medicare benefits of wealthier households. “Most economists believe fundamental tax reform can be a very powerful stimulus of growth. By contrast, I can’t imagine how raising the marginal tax rate for high-income people, many of them employers, is a recipe for growth.”
Through the Democratic prism, the August report was an anomaly caused in part by job seekers deciding to go to school in the fall. If you look at the past year, unemployment is down a full percentage point, and despite modest job growth the United States is still faring better than most of the rest of the industrialized world in recovering from the Great Recession.