WSJ: The only people who believe that Porkulus saved 3 million jobs are …
posted at 3:35 pm on July 15, 2010 by Ed Morrissey
The White House is doubling down on the failure of its Porkulus spending to create or even save jobs in the American economy by claiming that their efforts saved or created 3.6 million jobs in the last year. That’s quite a claim, considering that overall employment fell by over 2.3 million since the passage of Porkulus in February 2009, and the Wall Street Journal isn’t buying it. Instead, the WSJ reminds readers of the promises that led to the spending of almost a trillion dollars that America didn’t have, and how far short the results have fallen:
Christina Romer went so far as to claim that the 3.5 million new jobs that she promised while the stimulus was being debated in Congress will arrive “two quarters earlier than anticipated.” Yup, the official White House line is that the plan is working better than even they had hoped.
We almost feel sorry for Ms. Romer having to make this argument given that since February 2009 the U.S. economy has lost a net 2.35 million jobs. Using the White House “created or saved” measure means that even if there were only three million Americans left with jobs today, the White House could claim that every one was saved by the stimulus.
The White House also naturally insists that things would be much worse without the stimulus billions spent on the likes of Medicaid payments, high speed rail projects, unemployment benefits and windmills. Mr. Obama said recently in Racine, Wisconsin that the economy “would have been a lot worse” and the unemployment rate would have gone to “12 or 13, or 15 [percent]” if government hadn’t spent all of that money.
This is called a counterfactual: a what would have happened scenario that can’t be refuted. What we do know is what White House economists at the time said would happen if the stimulus didn’t pass. They said the unemployment rate would peak at 9% without the stimulus (there’s your counterfactual) and that with the stimulus the rate would stay at 8% or below. (See the nearby chart.) In other words, today there are 700,000 fewer jobs than Ms. Romer predicted we would have if we had done nothing at all. If this is a job creation success, what does failure look like?
All of these White House jobs estimates are based on the increasingly discredited Keynesian spending “multiplier,” which according to White House economist Larry Summers means that every $1 of government spending will yield roughly $1.50 in higher GDP. Ms. Romer thus plugs her spending data into the Keynesian computer models and, presto, out come 2.5 million to 3.6 million jobs, even if the real economy has lost jobs. To adapt Groucho Marx: Who are you going to believe, the White House computer models, or your own eyes?
Actually, the data supports the argument made at the time Congress passed Porkulus and Barack Obama signed it. The massive and sudden increase in debt incurred for the program created a rational conclusion that national debt service costs would grow sharply. With the Democratic agenda of higher regulation proceeding apace in 2009, businesses pulled back and sheltered capital, which is why the only jobs actually saved were in state bureaucracies from the bailouts sent to cover their budget gaps … for one year only. Those jobs will shortly go on the chopping block now that Congress has gotten gun shy about engaging in another year of subsidizing state bureaucracies.
Mike Pence blasted this new message in a floor speech today in the House:
In the worst economy in a quarter of a century, American families are hurting, businesses are struggling in the city and on the farm. And that’s obvious to almost everyone in this country except the Obama Administration.
Remarkably, yesterday, the White House issued a report saying that the stimulus bill that passed a year and a half ago, had ‘saved or created 2.5 to 3.6 million jobs.’ As my three teenagers might say to me in like circumstances, ‘Really?’ Two point five to 3.6 million jobs? Unemployment was 7.5 percent when the stimulus was passed, it’s 9.5 percent today.
It’s important the American people know that the report, issued by the administration yesterday, isn’t even based on actual numbers. It comes from what economists say is a highly-inflated projection of how much economic growth is created for every government dollar that’s spent. The facts come from the Bureau of Labor Statistics. They speak for themselves.
Since the stimulus was enacted, more than 3 million jobs have been lost in this country. A net job loss of 2.4 million jobs. Enough with the talk. The stimulus bill has failed. It’s time for new ideas. Across the board tax relief and fiscal discipline now.
And let’s recall yet again the actual employment data from the Bureau of Labor Statistics that exposes the White House argument as sheer fraud., with the red star designating the passage of Porkulus:
That’s a chart only Captain Kickass and Sergeant Smartass could spin into victory.
Update: Matt Welch puts it succinctly: “I don’t know about you, but government propaganda really irritates the hell out of me.” Kind of like Porkulus road signs, only more transparently false, I’d say.