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Thursday, January 5, 2012

Paul Krugman, "Bain, Barack and Jobs": Figures Don't Lie, But Liars Do Figure

I have always been fond of the pellucid witticism, "Figures Don’t Lie, But Liars Do Figure," which has been attributed to Mark Twain, but whose true source remains obscure (see: http://quoteinvestigator.com/2010/11/15/liars-figure/).

Paul Krugman, in his latest New York Times op-ed, "Bain, Barack and Jobs" (http://www.nytimes.com/2012/01/06/opinion/bain-barack-and-jobs.html?_r=1&hp), would have us compare the number of jobs created or lost by Barack Obama and Mitt Romney. With respect to Romney's claim that Obama has lost more jobs during his tenure than any president since Hoover, Krugman writes:

"But his claims about the Obama record border on dishonesty, and his claims about his own record are well across that border.

Start with the Obama record. It’s true that 1.9 million fewer Americans have jobs now than when Mr. Obama took office. But the president inherited an economy in free fall, and can’t be held responsible for job losses during his first few months, before any of his own policies had time to take effect."

Krugman proceeds to observe that Romney's claim to have created jobs includes the period when Romney was no longer at Bain, and does not include job losses at companies which Bain scrapped.

Personally, I don't care for comparing such "figures." Krugman tells us, "The economy lost 3.1 million jobs between January 2009 and June 2009 and has since gained 1.2 million jobs," but doesn't tell us what kind of jobs were lost and what type of jobs were gained. Were the jobs gained of a sustainable nature or were they "make-work"? Were they of the kind that contribute to further economic growth? Were they of the kind that allow Americans to support their families and send their children to college?

Moreover, I also don't buy the capricious statistics foisted upon us by Romney staffers. Romney was not in the business of growing companies, but rather shopped for distressed companies to be scrapped or made more efficient and sold. Indeed, some of the companies purchased by Bain ultimately created additional jobs, but by the same token you cannot avoid acknowledging the jobs lost by those companies that failed.

However, let's look beyond the "figures" game. As observed by Krugman in an op-ed (http://www.nytimes.com/2011/12/12/opinion/krugman-depression-and-democracy.html) published less than a month ago, we are in a depression, and if you're over the age of 50 and looking for a job, your goose is cooked.

I live in an alternative reality, completely dissimilar to that of Krugman, in which I assist companies with disruptive, ground-breaking technologies in raising capital, which allows them to hire talented employees, create cutting-edge products, and save lives. And although there is plenty of money out there, people have never in my lifetime been so scared of investing.

In order to create jobs, we need to change the investment environment by reinstating Glass-Steagall, reinstating the Uptick Rule (see: http://jgcaesarea.blogspot.com/2010/02/reinstate-uptick-rule-immediately.html), and reducing long-term capital gains tax.

Answers from Obama, who never managed a company and who, by his own criteria, will have failed during his first term in office ("I expect to be judged a year from now [i.e. a year from August 2011] on whether or not things have continued to get better"), or from Romney, who made his millions from corporate raiding? I see "figures," but no solutions.

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