This may be short lived…

Our system worked today. The majority of the House of Representatives — which was always intended to be the branch most responsive to the will of the people — rejected what would have been a massive and disasterous government bailout.

I’m happy to say that I was wrong. Last week when I read about Paulson’s initial proposal for the bailout, I thought that the backing of the White House and the leaders of both parties, coupled with an atmosphere of fear and the need to “do something quickly,” would be more than enough to push it through. Instead, a coalition of far-left Democrats and the few remaining free-market Republicans, joined by many members of both parties worried about losing their seats in the upcoming elections, defeated the bill and came out victorious.

My gut still says the bill will resurface and will probably be passed, in some form or another. But today we won, and tomorrow, I’ll be quite happy to be wrong again.

In praise of journalism

What a terrific use of the bully pulpit by New York Times business columnist David Leonhardt. Recipe: Take one commonly-discussed government statistic (unemployment rate). Add one part historical background and two new data sources, and analyze. Result: A newly illuminated phenomenon.

(In this case: One new frame for thinking about the recent upswing in “non-employed” people whose existence is invisible in the regular unemployment statistics.)

Over the last few decades, there has been an enormous increase in the number of people who fall into the no man’s land of the labor market[...]. These people are not employed, but they also don’t fit the government’s definition of the unemployed — those who “do not have a job, have actively looked for work in the prior four weeks, and are currently available for work.”

Consider this: the average unemployment rate in this decade, just above 5 percent, has been lower than in any decade since the 1960s. Yet the percentage of prime-age men (those 25 to 54 years old) who are not working has been higher than in any decade since World War II. In January, almost 13 percent of prime-age men did not hold a job, up from 11 percent in 1998, 11 percent in 1988, 9 percent in 1978 and just 6 percent in 1968.

There are only two possible explanations for this bizarre combination of a falling employment rate and a falling unemployment rate. The first is that there has been a big increase in the number of people not working purely by their own choice. You can think of them as the self-unemployed. They include retirees, as well as stay-at-home parents, people caring for aging parents and others doing unpaid work.

If growth in this group were the reason for the confusing statistics, we wouldn’t need to worry. It would be perfectly fair to say that unemployment was historically low. [...] Instead, these nonemployed workers tend to be those who have been left behind by the economic changes of the last generation. Their jobs have been replaced by technology or have gone overseas, and they can no longer find work that pays as well.

Read the whole thing.