01/29/2012 10:08 pm ET | Updated Mar 30, 2012

That Uncertainty Word -- I Don't Think It Means What You Think It Means

In numerous posts, I've argued that the evidence doesn't come close to supporting the conservative talking point that what's holding back hiring is Obama-driven regulatory uncertainty.

Well, here's another data nugget: the share of layoffs, job losses, and UI claims that employers report are due to government regulations or interventions. They are tiny--expect in one case in the table, never more than half of one percent. And in the most recent quarter, they were all about zero (technically, the number reported was too small to meet BLS sampling criteria).


Source: BLS, Table 2

My point is not simply to dispense with an erroneous talking point, but to try to stop the key-dangling-look-over-here-not-over-there routine re the major economic problem we still face: inadequate demand.

Moreover, the policy implications of getting the diagnosis wrong are steep. The regulatory diagnosis points toward dismantling stuff like financial and health care reform -- particularly nuts, btw, since neither has really been implemented yet. The insufficient demand diagnosis points toward stimulus.

And if we can't read the right signs, we're going to stay lost.

Data Note: A layoff is an event involving the filing of 50 or more initial UI claims by an employer during a 5-week period, with at least 50 workers separated from a job for more than 30 days. Separations include job losses from such an event, whether or not the worker claimed UI.