White House: No job growth for rest of the year

posted at 12:55 pm on May 11, 2009 by Ed Morrissey

Barack Obama pushed for almost $800 billion in stimulus spending by claiming that it would save or create millions of jobs this year.  Critics pointed out that most of the spending started in 2010 and more than half of it came in 2011 or later, calling the stimulus useless at best for salvaging jobs, let alone creating them.  The White House has quietly agreed with its critics, according to the New York Times, and now says it expects to see no hiring rebound in 2009:

President Obama’s chief economics forecaster said on Sunday that the country was not likely to see positive employment growth until 2010, even if the economy began to grow later this year.

Speaking on C-SPAN, Christina Romer, chairwoman of the White House Council of Economic Advisers, said that she expected the G.D.P. to begin growing in the fourth quarter of this year. Ben S. Bernanke, the Federal Reserve chairman, made a similar prediction last week.

But Ms. Romer also said that she expected unemployment to rise even after the economy turns, saying that the G.D.P. has to grow at a rate of about 2.5 percent before unemployment will fall. Before that happens, she said, it is “unfortunately pretty realistic” that the unemployment rate could reach 9.5 percent. A reasonable estimate for the G.D.P.’s growth rate in 2010, she said, is three percent.

Robert Reich, who served as labor secretary under President Bill Clinton and advised the Obama campaign, said on Sunday that the rate of growth would have to be higher — 4.5 percent — to reverse rising unemployment.

Talk about lowering expectations!  We just got done hearing Obama take credit for saving 150,000 jobs — which his administration never documented.  Now we’re hearing that the stimulus package demanded by Obama and passed over near-unanimous Republican objections won’t actually make any difference at all.  The cure, Obama and his team now admit, is private-sector growth.

None of us are particularly surprised to hear this.  We predicted all along that the massive government spending and the tax-revenue increases Obama planned would stifle growth and keep unemployment high.  We knew this by looking at the actual results of the same kind of policies during the Great Depression and the 1970s, two of the worst economic periods in the US over the last century.  In both cases, stripping capital from the market in service to expanding the federal government produced nothing but higher unemployment and stagnation.

I’m a little surprised to hear the Obama administration admit this, although they don’t really have much choice.  They tried to spin the latest unemployment figures as an improvement, when it went up from 8.5% to 8.9% and only got slightly improved by the massive, temporary hiring at the Census Bureau.  The rate of job loss in the private sector still exceeded 600,000 jobs a month, and the GDP has lost 6% on an annualized basis for the second straight quarter despite the stimulus.  This chart from Geoff at Innocent Bystanders makes the reason for their sudden honesty plain:

Actually, only the red indicators come from Geoff.  The chart itself comes from page 5 of an analysis prepared by Romer and Obama’s council of economic advisers in support of the $787 billion Porkulus plan:

The U.S. economy has already lost nearly 2.6 million jobs since the business cycle peak in December 2007. In the absence of stimulus, the economy could lose another 3 to 4 million more. Thus, we are working to counter a potential total job loss of at least 5 million. As Figure 1 shows, even with the large prototypical package, the unemployment rate in 2010Q4 is predicted to be approximately 7.0%, which is well below the approximately 8.8% that would result in the absence of a plan.

We’re already past 8.8%, well on the way to 9.5%, above her predictions in either case.  They predicted that the upper curve would occur without spending $800 billion on government make-work, and that passage would prevent the severe spike in unemployment.  Now Romer admits that the upper curve will happen anyway.

We need new economic advisors.  Romer and her crew aren’t worth $800 in small bills, let alone the fortune we’ve frittered away on Obama’s policies and her recommendations.

Update: Third Base Politics says jobs are the new Iraqi War.


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Comments

Mission Accomplished!

rockmom on May 11, 2009 at 1:59 PM

I like it.

BadgerHawk on May 11, 2009 at 2:06 PM

he wrote checks his body brain couldn’t cash.

More accurate. He’s not as smart as he thinks the media says we keep being told he is.

cs89 on May 11, 2009 at 2:08 PM

It’s sad, really. Romer was a pretty credible economist at one point. I was happy when they brought her on.

DrSteve

The list of Obama appointees who have not whored themselves out is short indeed.

SKYFOX on May 11, 2009 at 2:12 PM

To the trolls. I told you so. I am NOT happy to be able to say that.

sonofdy on May 11, 2009 at 2:18 PM

To the trolls. I told you so. I am NOT happy to be able to say that.

sonofdy on May 11, 2009 at 2:18 PM

It’s OK…they aren’t listening anyway. They have mouths, but no ears.

AUINSC on May 11, 2009 at 2:20 PM

President Obama’s chief economics forecaster said on Sunday that the country was not likely to see positive employment growth until 2010,

I wonder what inflation/interest rates will be by then.

snickelfritz on May 11, 2009 at 2:22 PM

Let me guess. The jobs will magically appear in September 2010, just in time for the elections. Right?

Aitch748 on May 11, 2009 at 1:04 PM

Reagan used to joke that the economy could be humming along beautifully and the evening news would lead with a story about one guy who lost his job.

With Obama it’s the reverse. The economy could be tanking all over the place and the evening news would lead with a story about one guy who got a stimulus check to dig a ditch somewhere.

PackerBronco on May 11, 2009 at 2:42 PM

I laugh every time I see that picture of Obama. He’s a real eagle eye.

jdflorida on May 11, 2009 at 2:47 PM

White House: No job growth for rest of the year

In the opinion of this graduate economist: No job growth under his Presidency.

Basilsbest on May 11, 2009 at 2:49 PM

Odd absence of trolls on this thread.

At some point, even the trolls realize that this Obammunism is just plain stoopid.

tarpon on May 11, 2009 at 2:50 PM

Hopey Changemas, everybody!!!!

NoFanofLibs on May 11, 2009 at 3:03 PM

if only his kidneys would fail

Locrian on May 11, 2009 at 3:06 PM

translated: Pelosi lied, jobs died.

stormin1961 on May 11, 2009 at 3:12 PM

Romer – Ain’t she that economist who’s find of a fusion of Aunt Bea/Julia Childs? Yeah, I saw her insist that her MIT degree would save us all and that Obama’s economic plans were sound.

Wyznowski on May 11, 2009 at 3:30 PM

translated: Pelosi lied, jobs died.

stormin1961 on May 11, 2009 at 3:12 PM

d00d… don’t ever post a pic like that again! Warn someone first!

Hopey Changemas, everybody!!!!

NoFanofLibs on May 11, 2009 at 3:03 PM

Hopey Chagemas: the holiday that never ends.

OR: the economy won’t recover until Pelosi, Reid, and Obama lose their jobs.

Chaz706 on May 11, 2009 at 3:33 PM

But I thought that we had already added tens of thousands of new government jobs… jobs that will continue to be a drain on the productive sector for what little remaining future we have.

Laurence on May 11, 2009 at 4:07 PM

Obama: We raised your taxes this year to create 3 million jobs next year.

Voter: But how can I pay more taxes now if I don’t have the money?

Obama: Hope! Change! Yes we can!

Steve Z on May 11, 2009 at 4:11 PM

It might be that unemployment would have gone up less without the pork. Certainly, it would go down quicker without the pork.

burt on May 11, 2009 at 4:23 PM

The Cleveland Plain Dealer:

But this “will not disrupt the lives of the people who work at Chrysler or the communities that depend on it,” Obama said.

Maybe someone should have asked what the White House meant by “no plans” and “disrupt.”

Congress members say they were blind-sided by the news the next day, May 1, that Chrysler in fact intended to permanently shutter five plants: one each in Ohio, Wisconsin and Missouri, and two in Michigan.

Read it all, even Dennis Kucinich pretty much calls Obama a liar

Kucinich, however, said he is struggling even to understand why the administration would tell him and others something that wasn’t true. “To me,” he said, “it really becomes a question of credibility.”

John_R on May 11, 2009 at 4:24 PM

Feel good America, you’ve elected a black man for POTUS.
Ho long will the thrill up the leg feeling last. If you a liberal fascist pundit, then your job is secure and thus you’re completely isolated from the unwashed masses that have little chance at finding employment in the private sector so you couldn’t care less.

Now that we’ve soaked the rich, Obama and his Congressional minions spent even more money than revenue streams could ever “hoped” to cover, where is the justification? Investment? Nope! Jobs? Nope! Record deficits, Affirmative

America bought this flim flam man and now we’re all having to suffer because of that poor decision on election day.

larvcom on May 11, 2009 at 4:56 PM

White House: No job growth for rest of the year

In the words of the trolls (when not referring to Bush policies), “have some patience.”

Upstater85 on May 11, 2009 at 5:21 PM

Is he trying to pull a Mr. Scott?!?

– The Cat

P.S. When it turns around bring this up. He gets none of the credit. Period

MirCat on May 11, 2009 at 5:51 PM

The elephant in the room is job losses. At 600k a month.

dogsoldier on May 11, 2009 at 6:08 PM

Odd absence of trolls on this thread.

DrSteve on May 11, 2009 at 1:33 PM

They’ll be along later this evening, after Wolfie on CNN and Keef on PMS-DNC tell them how to spin this.

Del Dolemonte on May 11, 2009 at 7:01 PM

“None of us are particularly surprised to hear this. We predicted all along that the massive government spending and the tax-revenue increases Obama planned would stifle growth and keep unemployment high.”

You INGRATES!

PRESIDENT Obama has graciously allowed you to keep $1.56 of Your money EVERY “working day, YOU ACTUALLY WORK.

Now shut your mouths, turn off fix news!

Or Obama will give you Government Cheese to go with YOUR whine!

S/ or /s?

DSchoen on May 11, 2009 at 7:10 PM

I assume the governing class will have to sacrifice?

How will Princess Pelosi pay the servants? And Princess Franks?

Vermont Neighbor on May 11, 2009 at 8:28 PM

Dumbya’s enduring legacy.

benny shakar on May 11, 2009 at 9:19 PM

Dumbya’s enduring legacy.

benny shakar on May 11, 2009 at 9:19 PM

As another ObamaBot who gives W the air of omnipotence, perhaps you can explain to us stupid Americans why the Obamanation cannot correct these problems after getting/stealing/printing 4 TRILLION dollars, which we were told would correct this problem. Could it be that …

Obama is inexperienced, and thus incapable.
Obama’s plans are all about growing government, not helping Americans.
Obama lied. American business died.
Obama considers it more important to kill millions of babies in the world than fixing the economy.

Please, feel free to educate us … unless you are as clueless as is The One.

DannoJyd on May 11, 2009 at 10:01 PM

To the trolls. I told you so. I am NOT happy to be able to say that.

sonofdy on May 11, 2009 at 2:18 PM

It’s OK…they aren’t listening anyway. They have mouths, but no ears. brains.

AUINSC on May 11, 2009 at 2:20 PM

Dr. Charles G. Waugh on May 12, 2009 at 12:16 AM

OBAMA’S NEW DOG: Porkingese.

Dr. Charles G. Waugh on May 12, 2009 at 12:19 AM

Dumbya’s enduring legacy.

benny shakar on May 11, 2009 at 9:19 PM

Pathetic.

Chuck Schick on May 12, 2009 at 1:18 PM

Dumbya’s enduring legacy.

benny shakar on May 11, 2009 at 9:19 PM

Hmmm which party has controlled congress since 2006? Which party wrote and passed the budget that Obama inherited? Which party does Obama belong to?

Don’t bother answering BS, you need to conserve your meager brain power to operate the keyboard. Tell me: Is one finger typing really that hard? (I’m guessing the other finger is firmly wedged up your nostril.)

PackerBronco on May 12, 2009 at 1:37 PM

No private enterprise job growth during the Obama administration is more like it. Not everyone wants to work for the feds. The feds are horrible managers & stewards of ANYTHING. Obama must be stopped.

izoneguy on May 12, 2009 at 2:32 PM

My econ degree was long ago. To me it is clear we will have hyperinflation and at the best when he leaves office, we will have been at some time almost near the level of GDP left by Pres Bush. I heard a line from geithners mouth the other day about preventing a boom. Booms are bad because they cause the bust. Controlling an economy is difficult unless you want to make it worse. If you want to let it improve, remove restrictions and free up the markets. That won’t happen.

seven on May 13, 2009 at 11:11 AM