The BLS has just released the October unemployment at 10.2%. Romer's update for Q4 was 9.6% for the entire Quarter. Unless she has a miracle for November and December, unlikely, then there is no way this will ever be attained. If I ever had a CFO that projected those numbers they would have been history a long time ago. No one can trust a word she says! The chart we presented just a few weeks ago we present below.
Now to the numbers. The chart below shows the current numbers and the Romer projections from January. The top line is the actual numbers and the bottom is what she predicted would happen with their Stimulus package. After eleven months this is now the current administration's economy and it is their problem. None of their actions seem to be helping and in fact they may soon make it worse. One nee look no further then the Health Care Plan which we have been discussing.
The error as a difference in percents is shown below. These are shown against the Stimulus and no Stimulus.
Finally the error as a percent of target is shown below. These are big mistakes. They show a gross misunderstanding of fundamental economics. We had been projecting a target max unemployment of 10.5% and we are standing by that. Yet the actions of the current Administration may make it worse. There is true fear and trembling in small business about health care costs as in the HR 3962 fiasco.
The problem is two fold. First and fundamentally, economists have no idea what they are doing. We may have the best and the brightest but arrogance does not build a bridge. We saw that in the Kennedy Administration. Perhaps one cannot do the job at all with the tools available, if so then just say it. Second, the massive amount of economic uncertainty engendered by the programs coming out of Congress cause more fear and trembling than anything else. Many are wondering if they should do anything until they know what the lay of the land is. That is not good.
Now to the numbers. The chart below shows the current numbers and the Romer projections from January. The top line is the actual numbers and the bottom is what she predicted would happen with their Stimulus package. After eleven months this is now the current administration's economy and it is their problem. None of their actions seem to be helping and in fact they may soon make it worse. One nee look no further then the Health Care Plan which we have been discussing.
The error as a difference in percents is shown below. These are shown against the Stimulus and no Stimulus.
Finally the error as a percent of target is shown below. These are big mistakes. They show a gross misunderstanding of fundamental economics. We had been projecting a target max unemployment of 10.5% and we are standing by that. Yet the actions of the current Administration may make it worse. There is true fear and trembling in small business about health care costs as in the HR 3962 fiasco.
The problem is two fold. First and fundamentally, economists have no idea what they are doing. We may have the best and the brightest but arrogance does not build a bridge. We saw that in the Kennedy Administration. Perhaps one cannot do the job at all with the tools available, if so then just say it. Second, the massive amount of economic uncertainty engendered by the programs coming out of Congress cause more fear and trembling than anything else. Many are wondering if they should do anything until they know what the lay of the land is. That is not good.
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