The Labor Department Friday announced that the number of jobs increased between April 2005 and March 2006 not by 5.8 million but by 6.6 million. As an editorial in the Wall Street Journal notes, "That's a lot more than a rounding error, more than the entire number of workers in the state of New Hampshire. What's going on here?" The most plausible explanation, advanced by the Journal and by the Hudson Institute's Diana Furchgott-Roth in the New York Sun, is that lots more jobs are being created by small businesses and individuals going into business for themselves than government statisticians can keep track of. Newspaper reports on the number of jobs usually focus on the Labor Department's business establishment survey. But over the past few years, the Labor Department's household survey has consistently shown more job growth than the business establishment survey. The likely explanation: The business establishment survey misses jobs created by new businesses. Our government statistical agencies do an excellent job. But statistics designed to measure the economy of yesterday have a hard time reflecting the economy of tomorrow.
The federal budget deficit has been cut in half in three years, three years faster than George W. Bush called for. Why? Tax receipts were up 5.5 percent in FY 2004, 14.5 percent in FY 2005, and 11.7 percent in FY 2006. That's up 34.9 percent in three years. And that's after the 2003 tax cuts. When you cut taxes, you get more economic activity, and when you get more economic activity, the government with a tax system that is still decidedly progressive gets more revenue.
The bottom line: The private-sector economy is much more robust and creative than mainstream media would have you believe.
Wow, good economic news, now THERE is something that the MSM is REALLY able to keep totally secret. The more I let The Long Tail sink in, the more I realize that we are seeing yet another fundamental economic / business / technical change in my lifetime. From a 10K view:
WWII to Mid to late 60's - The post war boom. If you could manufacture with reasonable capability you could make money. The era of the big mass market, the big corporation, and big labor.
The sick '70s - Nothing kills like success. Japan began to undercut us, fuel prices went up, government regulation and taxes had the golden goose of economic growth on the mat. The unions priced and powered themselves out of relevance. It looked like curtains for the US, and Carter told us the best days were behind us.
The go-go 80's and 90's - Reagan cut the regulations and taxes and freed the engine of US business and the US economy sprinted by Japan and Europe with ease. It was a new economy though. Competitive, non-union, low cost, high stock return, and high innovation. "Just showing up" no longer cut it.
The new millennium bubble and beyond - The "new new economy". Efficiency, connectivity, organic growth, the long tail, usage improving the product and the age of very tight TECHNOLOGICAL customer relationships.
There is a great article on this at O'Reilly Web 2.0. The combination of political bias and attachment to the old world of the late 60's means that much of what counts as "intelligentsia" in the MSM and government is now a few generations behind current.
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