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Archive: October 2006

Day of shame

US flag at half mast in front of US Supreme Court

Today President Bush may have actually reached the low point in his already morally bankrupt presidency. Today he signed the "Military Commissions Act", which, among other things, authorizes US government officials to use torture, at the President's discretion.

As the ACLU noted: "The president can now --with the approval of Congress-- indefinitely hold people without charge, take away protections against horrific abuse, put people on trial based on hearsay evidence, authorize trials that can sentence people to death based on testimony literally beaten out of witnesses, and slam shut the courthouse door for habeas petitions."

And this isn't simply the ACLU's interpretation of the new law. This is exactly the President's stated intention.

Truly a shameful day in the history of this country.

Yet another paper on European employment

CEPR has released the next (short) paper in a series comparing economic and social outcomes in the United States in Europe. This one, called "Whatever Happened to the American Jobs Machine?" [pdf], points out that after outperforming Europe with respect to job creation in the 1990s, the United States is actually underperforming Europe (the EU-15 countries) over the current decade.

According to data from the Organization for Economic Cooperation and Development (OECD), between 1990 and 2000, the average annual growth in employment in the United States was about 1.4 percent, compared to just 0.4 percent per year in Europe. By the 2000 to 2005 period, however, job creation in Europe had increased to 0.9 percent per year, while in the United States the rate had dropped to just 0.7 percent per year.

There are all sorts of problems with this comparison. Probably the most important problem is that it is silly to compare job creation rates across countries that have very different population growth rates. Countries with rapid population growth (the United States, Canada, and Australia, for example) tend to have higher job creation rates, while countries with low population growth rates (almost everywhere in Europe) can have excellent labor-market performance with low or no net job growth --because they don't have a growing labor force.

Nevertheless, critics of European labor-market protections used exactly these kinds of comparisons to bludgeon the European left during the 1990s. The paper simply points out that the tables are now turned.

But don't expect advocates of the US model to give up so easily. Here's an unintentionally funny exchange between a Washington Post reader, who eventually cited the paper, and Steven Pearlstein, one of the paper's business columnists:

Arlington, Va.: Is the "bankrupt socialist ideal" responsible for the fact that the US is lagging behind Europe in job creation, with US employment growing more slowly than the EU-15 over the past five years?

Steven Pearlstein: That's simply nonsense. Where did you get that. Nobody -- and I mean nobody-- thinks Europe is better at generating new jobs, new companies and new ideas than the U.S or Britain. Nobody. Its just not true. They are better at providing job security, and income equality, and making sure everyone has access to health care. Their public sector hasn't been allowed to atrophy as much as ours. Their capital, in some instances, can be cheaper, but only becuse they shortchange their savers. But job creation is not one of the strongpoints, as all those 28 year olds still living with their parents and drawing unemployment can tell you.


Arlington, Va.: Re. Europe creating jobs faster than the U.S., see "Whatever Happened to the American Jobs Machine?" [link]. Citing OECD data, the author has a graph that shows the U.S. civilian employment grew at 0.7 percent annually whereas the EU-15 employment was 0.9 percent from 2000 to 2005.

Steven Pearlstein: We had a recession after a fantastic boom. They had no boom, and not much of a recession. So that time period is not a good one from which to draw any sweeping conclusions.

Pearlstein's comeback is weak. I agree with the idea that countries shouldn't go shopping for economic models based on five years of data. But it is his side that set up the primacy of job creation rates, and the paper just points out that over an embarrassingly long period the United States has been creating fewer jobs on a percentage basis than what Pearlstein and others regularly refer to as a basket case.

The paper also got a mention at the The New Republic's "The Plank" blog, setting off a nice discussion.