We may or may not see 10% headline unemployment rate, because unemployment as a rate is based on two things: one is how many people are out of work and looking for work, the other is how many people are employed. Unemployment rates can then be lowered by driving people out of the work force, or just not counting them. Reagan’s administration did that, as did Chao earlier on. Keeping a lid on the headline unemployment rate has both a political payoff, in making it possible to argue things are better than they are, and an economic policy one: a lower UI means that it is possible to argue for lower interest rates. Greenspan did that.

Because of persistent oddities in the Household survey from which the UI rate is derived, many economists started ignoring it. In the early 2000’s I argued that the oddities came because the Household data was counting people doing unpaid work as “employed,” and that people doing non-payroll labor in the farm sector were being miscounted – that is, it measured a different “universe” of people than payroll data, and once one adjusted for the differences, that the household date normalized out. Later Greenspan came out and admitted this. But by that point people had moved to following the “establishment” data, which is where payrolls come from.

To nail the nail in the B/D coffin: if B/D were being fudged intentionally, then it would have added more jobs, not fewer. This is why for years employment numbers were coming in below expectations, and then revised upwards just as consistently. The B/D model was underestimating job growth, not overestimating it. The fix for the B/D problem is to realize that the economy we have, is crummier than the economy we ought to have, that as long as the B/D model is underestimating employment, it means we are getting too many McJobs, and not enough jobs with established firms that pay more money and have better wages.

The model’s failure was telling us something: that the Bush economy was McJobsifying faster than anyone expected. This tremor was data, it helped lead me to looking at the mortgage industry, because many of the McJobs being created were things like Mortgage processors. The B/D model took numbers for a normal economy, and translated that into a jobs number. This was always fewer jobs than were correct – which was why for a long time jobs figures came in lower than expected, not higher. The B/D model understated employment, making it look worse. In all, by almost a million jobs during the early recovery.

Now, what that should have told more people – as it told me – was that more of the jobs being created were at companies that didn’t actually do anything, they were part of a rapidly growing bubble industry that was artificially making the economy look better.

The B/D model was off not because the people who made it were making unreasonable assumptions, but because the policies of the administration itself were destroying the economy.

As long as the means of economic production are held hostage to corporate ownership, there will not be much chance to remedy the failure of corporate capitalism. No economic market may be controlled by monopolistic or oligarchic corporations, no corporation should control more than 5% of their market, tax policies can be applied to these ends. In those markets that monopolistic control is natural, absolute oversight and regulation is required. An attack on wealth will be counterproductive, but de-coupling wealth from economic means of production is imperative.