Tuesday, September 18, 2007

Well, she's not not making sense, exactly

Well, I am now officially feeling the pressure of being a contributor to this blog, thanks to Brad nudging me to get over to McArdle's site and pick some low-hanging fruit. Apparently I have inherited the role of shoddy economic analysis watchdog, based on the MA I earned from a third-rate department at a second-rate university some years back. I always knew that degree would take me places . . .

I have to say, I was a bit disappointed, since there's nothing in her recent posts that seems screamingly wrong to me - I thought her housing post made sense, even if it wasn't very interesting. Her post on German unemployment made the points you'd generally expect her to make, but I think she gets one thing wrong (emphasis mine):

Likewise, though Germany's OECD harmonised unemployment measure is lower than the official measure, it's still much higher than the level in the US: 6.4% vs. 4.6%. In a country with a population the size of Germany's, that's an extra 1.8 million people out of work. And if anything, that understates the problem, since America's social safety net is structured to inflate the stated size of the labor force (and thus the unemployment figure): for many benefits, you can only qualify if you are actively looking for work.

It seems to me that this is more or less backwards. US unemployment statistics are very particular in who shall and shall not be considered unemployed. For example, someone who has stopped looking for work after a long and fruitless search will not be counted in the unemployment statistics (see http://www.bls.gov/cps/cps_htgm.htm; scroll down to the "Who is not in the labor force?" heading). But that doesn't mean he's not unemployed anymore - just that he's reached the conclusion that there just aren't any jobs for him. He's still there. He's still not working. But we just pretend not to see him. How removing certain types of unemployed people from the official definition of the labor force acts to inflate the stated size of said labor force is beyond me.

Also, as a native Detroiter, I bristled at this:

And while Eastern Germany is a problem, it's been almost 20 years since unification; at some point, you have to acknowlege that, whatever its historical problems, Eastern Germany is now part of Germany. America does not, after all, get to throw out Mississippi and Michigan because historical forces have caused them to underperform the rest of the country.

It's cute, sure, and could even be an arguable point if (as one of her commenters pointed out) Mississippi and Michigan contained one-fifth of the US population, or if the "historical problems" faced by Detroit were anywhere near as complicated as those faced by Eastern Germany. But then, I'm sure she's seen "8 Mile," so she's no doubt an expert on the history of Detroit as well.

Yeah, I know - it's a thin gruel today. Unfortunately, I have deadlines in the real world this week; but with any luck, I will soon be able to give Megan's postings all the attention they so richly deserve.

1 comment:

brad said...

Pfft. No pressure. Hell, I'm not likely to have a chance to contribute anything real until Thurs or Friday, judging by my schedule. Who knew a whimsical lark would end up involving effort?