Dr. Fariq Kasem in History Department at the College of Education, Basrah University needs the works below for his research. Anyone wishing to donate photocopies of the works (or the works themselves), please send them to the address given below:
1, Adenauer, Konrad. Memoirs, 1945-1953, Vol.III. Washington, DC: Regnary Publishing, 1983 (or any English edition).
2. Anders, Wladyslaw. The Crime of Katyn: Facts and Documents. London: Polish Cultural Foundation, 1965.
3. Catudal, Honore Marc. Kennedy and the Berlin Crisis. Berlin: Verlag, 1980
4. Wandycz, Piotr. The United States and Poland. Cambridge: Harvard University Press, 1980.
5. Mikolajczyk, Stanislaw. The Rape of Poland: Pattern of Soviet Aggression. Whitefish, MT: Kessinger, 2008 (or any English edition).
6. Zochowski, Stanislaw. British Policy in Relation to Poland. New York: Vantage Press, 1988.
7. Polish-Soviet Relations, 1918-1943: Documents. New York: Polish Information Center, 1943, (also Wash. DC: Polish, 1943).
8. Any books on Indonesia, 1945-1950.
Please send books, donations, or queries to:
Books to Baghdad Program, Dr. Jonathan P. Roth, Department of History, San Jose State University, San Jose CA 95192-0117, (408) 924-5505, jonathan.roth@sjsu.edu
There is a widespread tendency to reify Lincoln's thought, especially with respect to slavery and race, as if he held a consistent set of well-integrated ideas throughout his entire life. This can be true of those who admire Lincoln, as for instance the political theorist Harry Jaffa, who takes as his lifetime template the more mature Lincoln beginning to embrace full political rights for African-Americans, as well as true of critics of Lincoln, such as Ebony editor, Lerone Bennett Jr., who sees Lincoln as always and forever a full-fledged white supremacist. Both extremes overlook the fact that Lincoln was human. He changed his views throughout his life and was capable of inconsistency at any particular time, just like the rest of us mere mortals.
Wilentz, however, accuses several of the books he reviews of an opposite failing. They embrace what he calls the"two Lincolns" approach, in which"Lincoln's anti-slavery political convictions" not simply"hardened over time" but instead arose from a sudden and dramatic conversion"in the deepest recesses of his soul." In challenging this approach, Wilentz quite correctly points out that Lincoln was first and foremost a politician, who was frequently capable of adjusting his public statements to what the electorate would tolerate, even when those statements diverged markedly from his personal views. The peculiar fact that Wilentz actually considers this one of Lincoln's admirable traits hardly mars the power of the essay. My only reservation is that I think that Wilentz sometimes approaches too closely to the Jaffaite illusion that Lincoln's opposition to slavery was as strong and consistent in his early life as it was at the time of his death.
Hat Tip: Ross Levatter and Randy Barnett, the latter of whom posted about the Wilentz essay at the Volokh Conspiracy.
But first we must distinguish between the gross national debt and the outstanding national debt, both of which the government regularly reports. The gross national debt includes the holdings of the various federal trust funds for Social Security, Medicare, and several smaller government programs. These programs have run surpluses that are in essence loaned to cover other government expenditures. Consequently, the figure to which most economists and commentators refer is the outstanding national debt, net of the trust funds (i.e., the debt held by the public, including the Federal Reserve). Changes in neither measure of the national debt match annual deficits or surpluses, nor do the changes in either measure match each other.
Let me start with the debt held by the public. When the U.S. government borrows money to cover ordinary expenditures, the full amount appears in annual outlays, the annual deficit, and the annual increase in the outstanding national debt. But when the U.S. government borrows money to make direct loans to private parties, usually only the net present value of those loans is counted as an outlay and part of the deficit. Under the Federal Credit Reform Act of 1990 (applied retroactively in all official budget statistics), the net present value of each loan (and loan guarantee) is the estimated amount of the subsidy (or cost to the government, exclusive of administrative costs). The subsidy is analogous to the loan loss reserves that banks set aside when they make loans. The outstanding national debt, in contrast, increases by the full amount of the loan. The national debt can therefore increase by more than the deficit when the U.S. government makes direct loans and by less than the deficit when the loans are repaid.
This accounting practice today is affecting how the TARP (Troubled Asset Relief Program) bailouts are reported. The Congressional Budget Office puts the TARP's contribution to the fiscal year 2009 deficit at $184 billion, even though the TARP is expected to add an additional $461 billion to the outstanding national debt during the same fiscal year. That means President's Obama's reported budget, coming in at nearly 28 percent of GDP (the highest since World War II), significantly understates the increase in federal spending on a pure cash-flow basis.
The same thing happened last September when the Treasury initiated its Supplementary Financing Program, in which it eventually borrowed half a trillion dollars solely for the purpose of reloaning it to the Fed, primarily to finance the Fed's currency swaps with foreign central banks. None of that money was booked as part of federal outlays, and so it could not appear in the annual deficit. Yet however much remains outstanding (currently down to $200 billion) will be included whenever the national debt is reported.
The additional difference between the outstanding national debt, held by the public, and the gross national debt is of course the total amount in the federal trust funds. Since the trust funds can rise or fall independent of the U.S. government's annual outlays, the increase in the gross debt can be more or less than the increase in the outstanding debt. The easiest way to comprehend this relationship is to keep in mind that when all the trust funds are totally exhausted, the two ways of measuring the national debt will perfectly coincide. (Currently, under intermediate assumptions about future variables, the Medicare trust fund will be empty in 2017 and the Social Security trust fund will be empty in 2037).
A technical point: Many mistakenly believe that, when the Johnson Administration moved Social Security from"off-budget" to"on-budget," it made a major difference. But because both"off-budget" and"on-budget" sets of government outlays and receipts are regularly reported and unified, the change was of little significance, even from an accounting perspective. Indeed, in 1983 Social Security was technically moved"off-budget" again. For details about these virtually meaningless convolutions, go here.
"Any discussion of mark-to-market accounting must differentiate between the beneficial effects of honestly reporting assets at what they are actually worth and the destructive impact of inflexible regulations that utilize the principle. Current discussions have blurred the distinction.
"(1) The Financial Accounting Standards Board (FASB) determined that securities held by a company which it intends to sell when funds are needed for another purpose ought to be reported at fair market value rather than historical cost. This seems eminently sensible to me.
"(2) The FASB allowed an exception for debt securities which would eventually mature at a fixed price, and which the company had the positive intent and ability to hold to maturity. Mark-to-market accounting is specifically not required when the company elects to classify the security as one to be held to maturity.
"(3) In spite of ignorant comments to the contrary, 'market' doesn't mean that the last trading price of a security must always be used, nor that a security whose market has virtually disappeared due to unusual circumstances must be valued at zero or near zero. The FASB explicitly permits the use of alternative market measures in such circumstances, such as the complicated derivative pricing model known as Black-Scholes. For instance, Berkshire Hathaway (Warren Buffett's company) has $8.1 billion (at cost) of derivatives on its books, all carried under mark-to-market accounting, but none of them currently priced based on the non-existent market for those derivatives.
"I am fully supportive of the use of mark-to-market accounting on balance sheets. It is clearly the most honest way to report derivatives. So what's the problem with mark-to-market accounting? I see the following government-created problems associated with them:
"(1) Mark-to-market was adopted by regulators as the basis for determining minimum capital requirements. Creating an inflexible regulation based on an inherently volatile measure was always an accident waiting to happen.
"(2) While foresighted bank executives might have chosen to maintain capital in excess of regulatory requirements so that a decline in value wouldn't trigger a crisis, it would have made no business sense to do so, since it would have reduced their lending income and ability to pay competitive rates on deposits or offer other benefits to attract customers. In a free market, they would have been able to do so, since they would have gained a reputation advantage from their greater safety, but with FDIC insurance protecting all deposits, customers don't shop based on safety, as they assume they are protected by the government from the loss of their deposits. Thus, only the rates and benefits offered by a bank matter to a customer, not the reliability of the bank, thanks to the FDIC."
(JRH interjecting: I might add that Less's point here is well supported by the historical record. Prior to government deposit insurance, U.S. banks voluntarily maintained capital-asset ratios in the range of 10 to 20 percent, way above current mandated levels.)
"(3) With banks thus always seeking to keep only the minimum required capital, the problem was further exacerbated by the Basel capital requirement formula, which requires less than half the capital if kept in the form of AAA securities compared to high quality individual mortgages (as I discuss in my article on Credit Default Swaps, forthcoming in the April 2009 issue of The Freeman). This caused an explosive increase in the worldwide demand for AAA securities as a result of the needs of regulatory arbitrage.
"(4) With capital of virtually every international bank invested as heavily as possible in AAA securities critical to the financial competitiveness of the bank, the problem was further exacerbated by the ratings cartel created by the SEC in 1975, which effectively mandated that companies obtain a rating from Moody's, S&P, or Fitch, who were thus effectively insulated from the destructive effects of reputational damage by a system that made it impossible for them to be put out of business by more accurate upstart rating services. This also prevented better methods of risk measurement (such as Credit Default Swaps) from replacing ratings.
"(5) Fannie and Freddie fed the supply by creating AAA securities in gigantic sums, initially from the securitization of high-quality mortgages, then from lower-quality mortgages that had components artificially improved in quality from the creation of 'tranches', and finally from lower tranches artificially improved in quality as a result of Credit Default Swap protection from AAA-rated companies such as AIG (also discussed in my CDS article). AAA ratings that were, in many cases, undeserved.
"(6) It is also possible, although I haven't thought this through, that the mortgage lending boom itself was stimulated by the need for AAA securities to satisfy regulatory arbitrage needs worldwide, and once it was clear that low-quality mortgages could be turned into AAA securities, the lowering of lending standards was inevitable, even absent the CRA and FHA mandates.
"So, thanks to various government interventions, banks operated with the minimum capital required by the mark-to-market application of the law, consisting almost entirely of artificially created AAA securities benefiting from artificially high market pricing resulting from sloppy ratings. And then reality bit, and an honest revaluation of these securities based on mark-to-market accounting, linked to inflexible government regulations, brought down the banking industry. And that is the extent to which I believe mark-to-market accounting can be blamed for this crisis."
Fortunately, libertarians have begun to challenge the Statist bias of presidential ranking. One of the first works to do so was a Mises Institute collection (to which I contributed a chapter), published back in 2001 and edited by John V. Denson: Reassessing the Presidency: The Rise of the Executive State and the Decline of Freedom. More recently the Cato Institute has published Gene Healy's The Cult of the Presidency: America's Dangerous Devotion to Executive Power (2008), and the Independent Institute has published Ivan Eland's Recarving Rushmore: Ranking the Presidents on Peace, Prosperity, and Liberty (2008). Only Eland's book actually ranks all the presidents, although the Denson volume contains a wonderful article by economists Richard Vedder and Lowell Gallaway offering a tentative ranking based on the growth of government.
I have been privately circulating for some time my own rankings, so I thought this might be an appropriate occasion to update and unveil them to the general public. They differ significantly in some respects from Eland's. I cut off obviously before Barak Obama and don't count William Henry Harrison, who was in office only a month. The one ranking I've actually elaborated on in print is my choice of Martin Van Buren as the least bad president. The article appears both in the Independent Review and the Denson collection (which kept my preferred title,"Martin Van Buren: The American Gladstone"). And of course, my book, Emancipating Slaves, Enslaving Free Men: A History of the American Civil War, implicitly explains why I rank Abraham Lincoln the worst.
Except for the first ten in both the "Least Bad" and the "Most Horrible" categories, my judgments are all subject to some revision. Further study or arguments might persuade me to shift them around slightly. One of the most important criteria in my rankings is the body count. I have the idiosyncratic belief that presidents merit high marks for keeping the country out of war rather than dragging it into one. Overall my rankings are based on explicitly libertarian criteria. Those who rolled or held back government intervention get points, those who increased government power lose them.
Most Horrible U.S. Presidents (starting at worst):
1. Abraham Lincoln
2. Woodrow Wilson
3. Harry Truman
4. Franklin D. Roosevelt
5. Lyndon Johnson
6. George W. Bush
7. Theodore Roosevelt
8. George H. W. Bush
9. Herbert Hoover
10. John Adams
11. William McKinley
12. James Madison
13. James Knox Polk
14. John F. Kennedy
15. George Washington
16. Millard Fillmore
17. John Quincy Adams
18. William Howard Taft
19. John Tyler
20. Jimmy Carter
21. Franklin Pierce
Least Bad U.S. Presidents (starting at best):
1. Martin Van Buren
2. Grover Cleveland
3. Calvin Coolidge
4. Warren G. Harding
5. Thomas Jefferson
6. Andrew Jackson
7. Gerald Ford
8. James Monroe
9. Zachary Taylor
10. James Garfield
11. Ronald Reagan
12. Dwight D. Eisenhower
13. Andrew Johnson
14. William Jefferson Clinton
15. Richard Nixon
16. Rutherford B. Hayes
17. Chester Arthur
18. Benjamin Harrison
19. Ulysses Grant
20. James Buchanan
One of the more persistent fallacies credits fiscal policy during World War II with ending the Great Depression. Genuine fiscal policy, of course, requires an increase in government borrowing, either by the government spending more, taxing less, or doing both. By that standard, as the classic 1956 article by E. Cary Brown demonstrated, neither Presidents Hoover nor Roosevelt conducted much in the way of fiscal policy prior to the war. Both were believers in balanced budgets, and so strived to accompany their expenditure increases with tax increases. Indeed, their most serious peacetime deficits resulted from congressionally enacted veterans’ benefits that they both resisted.
So why did U.S. involvement with World War II seemingly end the depression? Two reasons: (1) The draft conscripted 22 percent of the prewar labor force. Forcing people to work at low wage, high-risk jobs can always reduce unemployment, which is why slave societies never face an unemployment problem.
(2) Monetary policy accommodated the huge increases in government borrowing during World War II. By pegging the interest rate on Treasuries at very low rates (2.5 percent for T-bonds, and 0.375 percent for T-bills), the Fed automatically monetized the debt. The money stock nearly tripled with the result that seigniorage covered almost one fourth of the war’s cost. That is the highest seigniorage percentage for any U.S. war outside of the two hyperinflations: the American Revolution and the Confederacy. In other words, what looked like fiscal policy was really monetary policy in disguise.
And even then, the only reason monetary policy was effective at raising output was because it drove prices and wages above Hoover’s and Roosevelt’s explicit and implicit floors. Murray Rothbard was the first to emphasize the detrimental impact of these price and wage floors in America’s Great Depression (1963), followed by Richard Vedder and Lowell Gallaway in Out of Work (1993), but now with the work of Harold Cole and Lee Ohanian, this realization has gained mainstream respectability among economists.
Moreover, Bob Higgs has pointed out that, although World War II coincided with an increase in U.S. output, most of that output went into war production rather than enhancing well being. If you look at real consumption per capita, and adjust for wartime controls, there was not much improvement until the end of the war. Which leads to what in my opinion is devastating historical evidence against fiscal policy. The enormous decrease in government spending after World War II, followed by four years of surplus and a nearly 50 percent fall in the national debt as a percent of GDP, constitutes the most contractionary fiscal policy in all of U.S. history, another observation you can find in Vedder and Gallaway. If Keynesian theory were correct, there should have been a massive depression, which is what nearly all economists were predicting at the time. But the demobilization saw no real recession or significant unemployment.
Japan’s lost decade is often cited as an example of monetary policy’s ineffectiveness. Be that as it may, the Japanese also tried fiscal policy throughout the decade with no discernable benefits. In fact, there is no really good empirical evidence for the effectiveness of fiscal policy, as Tyler Cowen, among others, has reminded us repeatedly on his blog, Marginal Revolution. The econometric studies are all over the map. Some have even recently found that tax cuts have far greater multipliers than expenditure increases, in outright contradiction of Keynesian theory. Other studies get high multipliers only by assuming the debt is automatically monetized. For example, more than half the stronger multipliers in Greg Mankiw’s popular intermediate macro text are the result of accommodating monetary policy.
My best guess is that the expenditure multiplier from pure fiscal policy is probably close to zero or, if you consider supply-side effects, possibly negative. But this cuts both ways. I believe that the tax multiplier is also close to zero. Any justification for tax cuts depends on their supply-side, not demand-side, effects. This goes as well for all the interminable debates about how the government spends the stimulus.
In short, Obama’s stimulus package is simply a “Hail Mary” pass. As John Cochrane of the University of Chicago has aptly put it in his recent critique of fiscal stimulus, “public prayer would work better and cost a lot less.” If the American people are lucky, the stimulus will merely be ineffectual. If not, it will make matters worse. Counter-productive government intervention under Bush has already turned a relatively minor recession into something nearly as bad as the recession of 1982. Any further deterioration will increase the clamor for still more disastrous government intervention. The only positive thing I can say about the stimulus package is that, by driving up the U.S. government debt, it will probably bring about a Treasury default much sooner than otherwise.
Rogoff shows his political bias by leaving off the elimination of government programs as one of the theoretical options, although he may think of that as default. But he still has the dilemma right. He also appreciates the fundamental problem in the financial system:
"The right lesson from Lehman should be that the global financial system needs major changes in regulation and governance. The current safety net approach may work in the short term but will ultimately lead to ballooning and unsustainable government debts, particularly in the US and Europe."
Read the article here.
Hat Tip: Arnold Kling
But the current release does more than revise the recent estimates. Using new input-output analysis, the BEA has just completed a comprehensive revision of all the numbers in the National Income and Product Accounts going way back to 1929. Consider the slight difference this can make in the story of the current recession, which the National Bureau of Economic Research (NBER) dates as beginning in December 2007. The old estimates reported that real GDP fell by 0.2 percent in the fourth quarter of 2007, whereas the new estimates report that it rose by 2.1 percent. For the first quarter of 2008, the old estimate is a 0.9 percent rise; the new estimate is 0.7 percent fall. Second quarter of 2008: old, 2.8 percent rise; new, 1.5 percent rise. Third quarter of 2008: old, 0.5 percent fall; new, 2.7 percent fall. Fourth quarter of 2008: old, 6.3 percent fall; new, 5.4 percent fall.
This of course dramatically underscores the inherent imprecision of all these numbers. Admittedly, imprecise numbers are better than no numbers at all, so long as one remains aware of their limitations. But these frequent changes are not only confusing but an incredible nuisance for both historians and economists. With three sets of series (or as we will see, actually more) that researchers might choose from, the BEA's futile quest for a false precision can wreak havoc with the efforts of those wishing to compare the work of different scholars.
Nor is this the first time that national income figures have undergone comprehensive revision. The BEA now does comprehensive revisions every five years. Just a quick perusal of selected back issues of the annual Economic Report of the President shows how this can affect the numbers. Richard K. Vedder and Lowell E. Gallaway caught probably the most egregious instance in their neglected Out of Work: Unemployment and Government in Twentieth-Century America (1993). The 1960 estimates of real Gross National Product (this was when the preferred aggregate was still GNP rather than GDP), using a 1929 base year, reported that output rose by 30 percent during World War II (1941-1944) and then fell by a modest 5 percent to 1948. In contrast, the 1990 estimates, using 1982 as a base year, had output rising by 50 percent during World War II and then falling by a massive 30 percent from 1944 to 1948.
In other words, the 1990 estimates discovered a massive post-World War II recession in the U.S. that absolutely nobody was aware of at the time and that failed to show up at all in the unemployment numbers. Yet most macro texts over the last decade have graphs that mindlessly depict this imaginary depression by statistical artifact. The BEA made another big change in 1996 when it switched from using an implicit Passche price index (with forward moving quantity weights) to using a chain-weighted index for deflating nominal GDP to real GDP. Under the latest revisions the severity of the post-World War II"depression" has been softened somewhat to a 13 percent fall in GDP that ends in 1947.
Obviously most revisions are nowhere near as significant. Indeed, given the dizzying frequency of its trivial adjustments, clearly the BEA is a government agency with far too much money at its disposal. All would be better served, in my opinion, if the imprecision of the National Income and Product Accounts was more openly acknowledged and the frequency of the BEA revisions significantly curtailed. Or better yet, abolish the BEA and turn the whole enterprise back over the private NBER, where it resided before being nationalized during the Great Depression.
One part of the press release, however, is a bit misleading. It states that in his first book, And the War Came: The North and the Secession Crisis, 1860-1861 (1950),"Stampp rejected the then-common theory that sectional compromise might have saved the Union, and he also traced the cause of the Civil War to slavery." I suspect that this characterization comes from Leon Litwack, a former student and colleague of Stampp's, who is quoted extensively elsewhere in the release. Although a fine scholar who has written important books of his own, Litwack has tended to be more polemical in support of his left-liberal politics than Stampp ever was.
Be that as it may, And the War Came focuses not on southern motives for secession but, as the subtitle indicates, on the northern reaction. It therefore shows better than any other work that slavery played only a marginal role, compared with numerous other concerns, in the Union's decision to suppress secession. Indeed, it is the work in which Stampp came closest to implying that secession may have been legitimate, despite slavery--a position he later backed away from.
Stampp's next book, The Peculiar Institution: Slavery in the Ante-Bellum South (1956), still remains one of the best introductions to the subject, notwithstanding all the mountains of subsequent research and writing on American slavery. Using traditional historical methods, The Peculiar Institution anticipated nearly all of the valid conclusions in the controversial cliometric study of Robert William Fogel and Stanley L Engerman, Time on the Cross: The Economics of American Negro Slavery (1974), without slipping into what I consider to be some of Fogel and Engerman's errors. Overall, Ken was a scrupulous and meticulous researcher, a lucid and compelling writer, and an inspiring and influential teacher, exemplifying historical scholarship at its best. He will be sorely missed.
In 1992, shortly after Mozilo became chairman of the Mortgage Bankers Association, the Federal Reserve Bank of Boston issued a report stating that it had found systemic discrimination by mortgage lenders against African-American and Hispanic borrowers. Robert Gnaizda, former general counsel of the Greenlining Institute, a nonprofit organization focused on minority rights, sent the report to Mozilo and other mortgage bankers."I received a harsh response from Mozilo," Gnaizda told me. Privately, however, Mozilo was appalled. He ordered that all Countrywide's records on rejected minority applicants be sent to him, and he retroactively approved about half of them. Then he dispatched African-Americans, posing as prospective borrowers--he called them"mystery shoppers"--to Countrywide branches, and concluded that they were indeed treated differently from white borrowers.
Countrywide opened new offices in inner-city areas, created counseling centers, and loosened some lending standards, to include borrowers with less than pristine credit histories. Between 1993 and 1994, the company's loans to African-American borrowers rose three hundred and twenty-five percent, and to Hispanics they increased a hundred and sixty-three per cent. In 1994, Countrywide became the first mortgage lender to sign a fair-lending agreement with the Department of Housing and Urban Development.
Up until 1983 the government measured only civilian employment and unemployment. This made complete sense as long as the U.S. had a military draft. A large portion of the armed forces was thereby analogous to the prison population and logically excluded from the labor force for the same reason. But with the ending of conscription, it made more sense to treat military personnel like regular employees responding to wage and benefit offers. This is probably why the National Commission on Employment and Unemployment Statistics, in its report of 1979, recommended compiling total employment and unemployment, including resident military personnel, as well. This new series was initiated in January 1983 but lasted only a decade. Because of certain statistical ambiguities, the BLS effectively discontinued labor force measures that included the armed forces in June 1994. For those who want to know the details, what follows are the answers that Steve Hipple of the BLS provided to Justin's questions:
Why were the resident armed forces no longer included? There were 3 main reasons:
1) Dept of Defense data on resident armed forces were problematic. For example, many of the troops involved in Desert Storm were still classified as residing in the US because their official station was not changed from their US post. To complicate matters further, each service classified its troops differently, which is, of course, a problem for us. In short, we had problems with inconsistent data.
2) As far as we know, only the New York Times among our data users ever used the total rate, rather than the civilian rate;
3) We don't have any of the demographic detail on the armed forces that would allow us to publish the type of detail on a total basis that we do on a civilian basis. So one could not compare a group's rate (say, black teens) with the total rate, because one would be on a civilian basis and the other on a total basis.
Has anyone complained about BLS excluding them from the counts? We have received no complaints about the lack of inclusion of the armed forces in the rate since we discontinued the series.
How much would including the resident Armed Forces affect unemployment rates? The unemployment rate for the total labor force (which was always published in addition to, and not in place of, the civilian rate), was usually about one-tenth of one percentage point lower than the civilian rate (occasionally it was two-tenths lower). That's because adding the Armed Forces did not change the number of unemployed (numerator), since persons in the Armed Forces are all employed, by definition. But the labor force (denominator) grew slightly; thus, the total unemployment rate was always fractionally lower than the civilian rate. For instance, in 1983, the total unemployment rate (including the Armed Forces) was 9.5 percent; the civilian unemployment rate was 9.6 percent. In 1993, the total unemployment rate was 6.7 percent; the civilian unemployment rate was 6.8 percent.
What about military reservists? Individuals who are on active duty are not included in the CPS [Current Population Survey] universe (the civilian noninstitutional population) or in any of the labor force measures. Those serving in the Armed Forces Reserves are within the scope of the CPS. That is, they are considered civilians, so they are interviewed and their responses go into the official labor force estimates. However, if their unit is called to active duty, they are then considered to be in the Armed Forces and thus outside the scope of the survey. The time reservists spend in initial or ongoing training, or their annual 2-week (or longer) duty, is not considered active duty. Only if their unit is called up by military or Presidential order are they considered to be on active duty.
Reservists are treated differently in the CES [Current Employment Statistics], which is a measure of jobs, not people. According to CES definitions, if a reservist is on active duty the ENTIRE pay period of the 12th, they are NOT counted as employed even if: 1. the employer is making up the difference between their military pay and their normal pay, 2. they receive no pay but still receive benefits, or 3. they receive their normal pay. If a reservist works even one day during the pay period, they are counted as employed. CES data exclude the military. The sample 790 forms available under the technical notes section at http://www.bls.gov/ces/home.htm show that 'armed forces personnel on active duty the entire pay period' are excluded from All Employee counts.
