Political  Calculations

James Pethokoukis has the latest version of the chart originally created by Geoff at Uncommon Misperceptions, to which he's added a new wrinkle in its latest update: the green data point showing what the U.S. unemployment rate would be, if only the labor force participation rate had not fallen so much from where it was in January 2009 when Barack Obama was sworn into the presidency.

Pethokoukis' Big Chart

We thought we'd put that data point to the test. But, being us, we'd do the same math covering all the time since January 2002, just over 10 years ago, just to see how we had arrived at that point. Our results, showing the effects of keeping the U.S.' labor force participation rate at a constant 65.7% of the U.S. population, are below:

What Would the U.S. Unemployment Rate Be If the Labor Force Participation Rate Was the Same As it Was in January 2009?

What we find suggests that there might indeed be something to the President's apparent belief that his economic plan has worked, although only half as well as intended, it seems:

Here, we observe that the actual trajectory for the U.S. unemployment rate largely parallels the one he and his economic planners centered in Washington D.C. desired. Since the actual trajectory for the U.S. unemployment rate requires a significant decline in the United States' labor force participation rate in order for it to have fallen as it has, we must assume that was their intention.

Political Calculations

Political Calculations is a site that develops, applies and presents both established and cutting edge theory to the topics of investing, business and economics.

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