William Chirolas -- World News Trust
William Chirolas
Oct. 3, 2009 -- I have spent eight years screaming about how the birth-death model adjustment (which assumes new companies are formed, and just have not yet reported those new jobs, when old companies go bust -- indeed unreported job creation going up as more companies go bust) was a crock -- and that those real 22 million job creations under Bill Clinton were just about the last real job creations we have had in the United States, with near zero created since George W. Bush was elected (the birth-death model correction under Clinton being in total to the date he left office, from the month the correction concept first was thought of, still just about five digits Jan. 20, 2001).
Well guess what, now the government -- even under the flawed method that I object to -- says that its flawed adjustment has been wrong this year by 824,000.
We have 824,000 less jobs in the economy.
We have 824,000 more people who have lost their jobs.
The correction -- the decrease of 824,000 -- will be made to the total employed number in the January 2010 report (it is an annual adjustment always made in January).
They still refuse to simply take the W-2 tapes received from each major business as part of the Federal Income tax filing each February as a count of the employed. They instead use statistical estimates from the establishment survey, corrected to the unemployment tax tapes submitted at the same time as the W-2 tapes are submitted, and further "corrected" (because the government doesn’t know if a company fails to respond because it has gone out of business or is just late) by a "birth-death" correction, and it is from this last correction not being within the statistical "reasonable zone" that they get a new 824,000 correction to the correction.
It does not help my anger that these jobs were lost under Bush and the GOP - there is a near 1 year lag in the adjustment - I am tired of the government taking a bad Greenspan idea that when businesses go bust in America it is just "creative destruction" and that those folks are within a month starting new business that employ the fired folks - so that increases in the number of real businesses that go bust means an increase in the number of employed in these imaginary new businesses.
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William Chirolas brings 40 years of real-world business experience in local, state, national, and international tax, pensions, and finance to the world of blogging. A graduate of MIT, he calls the Boston area home, except when visiting kids and grandkids.
