The Obama administration has been on a full-court press to sell the American public on the automaker bailouts started by its predecessor but amplified into politically-machinated bankruptcies by the current White House. Last week, Barack Obama hailed Chrysler’s announcement that it had repaid the bailout loans — without mentioning that the payoff came from another government loan to Fiat, and that the Obama administration has already forgiven $4 billion in loans to the automaker. Yesterday, Treasury Secretary Tim Geithner did more spinning in an essay for the Washington Post, claiming that the bailouts have led to a renaissance of jobs in Detroit:
While it remains unacceptably high, Detroit’s unemployment has fallen nearly one-third over the past two years. The car companies are leading a comeback in American manufacturing. And while we will not get back all of our investments in the industry, we will recover much more than most predicted, and far sooner.
Well, that’s true … as far as it goes. The jobless rate for Detroit spiked to 15.9% in September 2009 before settling down to April’s 11.3%. However, Detroit unemployment was 12.3% in January 2009, when Obama took office, so the actual delta for his entire term is one percentage point. Over a two-year period — the time frame Geithner uses — it dropped about three percentage points (from 14.5%), which would be more like a fifth than a third.
But that’s still deceptive. Geithner uses these numbers to claim some sort of hiring renaissance in Detroit, but the employment numbers tell a different story. When Obama took office, there were 713,300 jobs in metropolitan Detroit. That bottomed out to 680,900 in June 2009, after the politically-machinated bankruptcies pushed by the Obama administration. The latest figures for April 2011 show 695,200 jobs in Detroit, an overall drop of 18,000 jobs. For the wider Detroit area, the job level started at 1.7822 million in January 2009, and now stands at 1.7398 million in April 2011, a drop of more than 43,000 jobs. Statewide, jobs declined from 3.9488 million in January 2009 to 3.9119 in April 2011.
Why did the jobless rate drop so much? Just as has happened throughout the US, people have fallen completely out of the workforce in Detroit in large enough numbers to lower the unemployment rate while the number of actual jobs declines. Geithner deliberately cast the bailout in deceptive terms to insinuate that jobs have returned to the American automaker Mecca, while reality is that Detroit is still bleeding jobs — as is the rest of America.
Update: The last word in the penultimate paragraph should have been 2011, not 2009; I’ve fixed it, thanks to reader Jerry S.