Mindful that both the public and the policy makers place heavy emphasis on “jobs, jobs, jobs,” I have been thrashing about in the employment data collected, organized, and distributed by the Bureau of Labor Statistics. At this point in the recession, everyone knows that the standard rate of unemployment, for what it is worth, has risen greatly since 2007 and lately has been stuck in the neighborhood of 10 percent. Because of this statistic’s various ambiguities (which I have discussed elsewhere), however, I am concentrating here on a more unequivocal indicator—employment.

There is no happy news on this front, of course. Total employment peaked in 2007 at 137.6 million persons on nonfarm payrolls, fell slightly in 2008, and then dropped precipitously in 2009 to 132.0 persons, for a two-year loss of 5.6 million jobs. In 2009, total employment was approximately equal to its magnitude in 2001, even though the labor force had grown substantially in the interim. The sharp recent decline in employment, which normally increases from year to year along with the labor force, has been bad enough, but when we examine the components of aggregate employment, we discover even worse news.

We find that the loss of employment has occurred entirely in the private sector: employment fell from 115.4 million persons in 2007 to 109.5 million persons in 2009, a decline that took private employment back to its level at the end of the 1990s. As private employment has collapsed since 2007, however, the government payroll has actually grown slightly from 22.2 million persons in 2007 to 22.5 million persons in 2009, which puts this class of employment roughly 1.7 million persons above its magnitude in 2000.

Monthly data for the most recent year display this difference starkly. From December 2008 to December 2009, total employment fell from 135.1 million persons to 130.9 million, while government employment remained essentially constant at 22.5 million persons. The government employees also enjoyed increased compensation during recent years. Nice work if you can get it: no risk of losing your job, plus practically iron-clad prospects of rising real compensation, notwithstanding that millions of former private-sector employees now find themselves without jobs.

Of course, much of the Obama administration’s “stimulus” spending has been directed toward ensuring that state and local government workers do not lose their jobs, and federal employees, as usual, have not had to fear joining the unemployment line, owing to the rapidly growing appropriations for practically every department and agency in the recent, skyrocketing federal budgets.

This situation bears an eerie resemblance to the employment situation during the Great Depression, when private nonfarm hours worked fell steeply from 1929 to 1932 and did not get back to the 1929 level until 1941, notwithstanding (or perhaps because of) the millions of persons added to government payrolls during the New Deal period. In both cases, the possibility that government employment crowds out private employment, rather than stimulating it, cannot be dismissed out of hand.

Unless private employment growth resumes soon, the United States risks falling into the same long-term economic “sclerosis” that has plagued the welfare states of western Europe for decades. Already it appears that the past ten years may prove to have been America’s second “lost decade” (the 1930s having been the first), an interval of little or no net economic gain, owing to destructive government policies that produced only unsustainable booms followed by inevitable busts, along with such huge, frequent, and unsettling changes in government policies that private planning, especially for long-term investment, has become too risky for private investors to bear—a situation I call regime uncertainty.

Vulgar Keynesians like to suppose that whenever the government undertakes new spending to augment the ranks of its employees a multiplier effect will result, causing private economic activity and employment to follow the same upward course. Here again, however, a closer examination of what the government does and how it goes about doing it may serve to shield us from the fallacies of overly aggregative economic analysis.

In 2003, Historians Against the War (HAW) seemed a promising opportunity to bring together antiwar historians of all political persuasions. And, in fact, many libertarian historians joined with liberals, socialists and others on the left to oppose the war. Such an ecumenical political organization had rarely appeared in American history since the demise of the American Anti-Imperialist League in the early twentieth century. Because of its openness, HAW received praise from such free market blogs as the Beacon of the Independent Institute, Antiwar.com, Scott Horton's The Stress Blog, LewRockwell.com Blog, and Liberty and Power at the History News Network.

Seven years later, however, HAW has become essentially a left-wing social club with virtually no political effectiveness. The shift to the new HAW began in March when the leadership purged from the Hawblog yours truly and Thaddeus Russell, a historian of the left who has libertarian sympathies and is critical of the moral universalism and imperialism of the progressive tradition. The major complaints against us were that we were devoting too much space to pushing a"libertarian agenda" (others did not hesitate to blog on progressive proposals that had nothing to do with foreign policy),"bashing Obama" and his foreign policy, and criticizing the HAW leadership for its silence on the new administration.

The blog purge was only a prelude. Soon after it took place, HAW scuttled its generally welcoming and ecumenical original statement of purpose in favor of a leftist critique of"global capitalism" that seemed almost calculated to spurn potential libertarian or conservative recruits.

The latest example is this advertisement for an upcoming HAW panel. It takes for granted that HAW members and"progressive historians" are one and the same. It shows no effort to include libertarian and conservative anti-war historians, left historians critical of"progressivism," or even to acknowledge the existence of non-progressives.

Worse yet, as Thad Russell pointed out, HAW's use of this label in this way also identifies the organization with the most aggressive imperialists in American history including the two main founders of American progressivism, Theodore Roosevelt and Woodrow Wilson. The advertisement asks "what can progressive historians & historically minded activists do to positively influence political events?" The implication, of course, is that libertarian and conservative anti-war historians are not qualified to"do” anything about Obama’s Wars. They are to be ignored.

Thad Russell comments:

As a member since the earliest days of the organization (I signed on shortly after the Iraq invasion), I ask -- and am on the verge of very publicly demanding -- that the HAW steering committee clarify whether the organization is limited to"progressive" historians (as the AHA flyer as well as many other statements made by the steering committee strongly suggest) or just historians who are AGAINST THE WARS. If the former, I will resign immediately since I refuse to identify myself with Wilson, the Roosevelts, Truman, Kennedy, Johnson, and the"progressive" tradition that is responsible for the largest imperialist wars in U.S. history.

How about a panel discussion on that?

I would also like to note that, via the HAW blog, David Beito and I raised the issue of Obama's warmaking and the HAW's silence on it from the first days of the administration but were banned from the blog for doing so. Please see our posts on the blog archive, beginning here.

And do let us know whether you agree with the steering committee's decision to ban us from the blog.

In solidarity against the wars, Thad Russell www.thaddeusrussell.com

“Attendance Center.” How apt a phrase for what is happening in higher education, as every politician and president (Bush and Obama included) promise “more, more, more!”

A new book is getting acclaim for documenting how simply funding more college “attendees” is a waste of money: The Lowering of Higher Education in America: Why Financial Aid Should be Based on Student Performance. Toby hammers home the message that always shocks people when I tell them that most of those who go to college will never graduate with a degree. Moreover, mere “attendance” at a college does little to improve earnings and leaves many in debt. The situation is even worse at community colleges, where politicians at the state and national levels are heavily subsidizing two-year college education. By accepting all, the old whip of “working hard in high school” to “get into college” is gone—every K-12 student knows they can go to college whether they prepare themselves or not.

The following excerpt from an article on the abysmal state of community college “attendance centers” highlights how much worse the problem is at that level:

A cursory look at the data is not encouraging. Although 41 percent of America’s college-bound students enter community colleges each year, only 28 percent of this cohort actually complete their studies and earn a degree, an even more dismal outcome than that displayed at the nation’s baccalaureate colleges, where 56 percent manage to graduate. These depressing statistics haven’t dampened the general consensus favoring support of community colleges because proponents appear to believe that college “access” trumps successful college completion and that “some college is better than none.” Refuting the latter point, U.S. community college non-graduates have only marginally higher earnings and lower unemployment rates than high school graduates and do far less well than their counterparts that manage to complete their studies. The disappointing outcomes at community colleges are to some extent hard-wired into four aspects of their design. These institutions are proudly and aggressively “open admissions” which means that there are no academic criteria to get in except, in most places, a high school diploma. . . .

Readers interested in learning the graduation rates (and other vital statistics) of any college in America can find it here. Will financial aid be tied to merit rather than a free lunch for everyone, regardless of performance? The political incentives work against any such reform. After all, the citizens of Entitlement U.S.A. believe it is their unalienable right to a discounted (or free) college education. Furthermore, politicians count votes and “something for nothing” is always popular. On we go . . .

I have been promoting this idea publicly since 1997, in articles, songs, dances (without wolves), stand-up comedy, performance art, and blog posts, not to mention my tedious lectures and my boring 2006 book Depression, War, and Cold War. I cannot say that the world has beaten a path to my door as I’ve sought to convince my fellow economists that this phenomenon was important in retarding recovery from the Great Depression and, in all likelihood, in retarding recovery from the present recession (although, to be fair, I must acknowledge that a few of my fellow economists and others have taken note).

Before I could write anything about the WSJ article, however, Brooks Wilson wrote a nice post about it at his blog, which I recommend. Wilson has artfully combined my crisis hypothesis on the growth of government with my regime-uncertainty argument to produce what he calls “the crisis paradox” — “crisis is the best time politically and worst time economically to enact fundamental economic reform.” Indeed. But, of course, that is precisely how things tend to happen, making political entrepreneurship the mortal enemy of economic prosperity.