Did Geithner use Turbo-Tax to calculate Detroit employment?

posted at 3:05 pm on June 1, 2011 by Ed Morrissey

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.

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I would rather walk barefoot over salt tipped glass than drive a Chrysler or GM.

angryed on June 1, 2011 at 3:09 PM

The funny thing is that Geithner, Obama and the rest of these crooks never mention the dealerships they ruined in the process. Why? Because dealerships are private enterprises, not unions.

search4truth on June 1, 2011 at 3:10 PM

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 2009.

Why did the jobless rate drop so much?

They’re not employed, nor unemployed. Soylent green is people. That or they attempted Sanctuary.

Or moved to Texas….where the jobs are.

BobMbx on June 1, 2011 at 3:11 PM

Laughing at the Turbo-Tax reference in the title. :D

malclave on June 1, 2011 at 3:14 PM

I think it’s more likely due to people moving away from the area.

ButterflyDragon on June 1, 2011 at 3:17 PM

If one hasn’t gotten the clue by now that everyone around bho does not ever tell the truth about anything, period! I think one of the major things that bho looks for to get new people, they must not pass a lie detector test!
L

letget on June 1, 2011 at 3:18 PM

So is anybody with an (R) challenging this dufus’ numbers?

AshleyTKing on June 1, 2011 at 3:19 PM

And don’t forget, Michigan was the only state to lose population between 2001-2010.

rbj on June 1, 2011 at 3:23 PM

They just cannot stop lying…

PatriotRider on June 1, 2011 at 3:27 PM

Ed –

Awful big assumption Geitner calculated anything

Odie1941 on June 1, 2011 at 3:28 PM

And don’t forget, Michigan was the only state to lose population between 2001-2010.

rbj on June 1, 2011 at 3:23 PM

True and it should be John Conyers seat in the Detroit area.

fourdeucer on June 1, 2011 at 3:32 PM

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.
====================================================

Pre-2012 Perception/Deception Operation!!!!!!!!!!!!!!!

canopfor on June 1, 2011 at 3:34 PM

The vast majority of Americans will never see this analysis and never realize that they’ve been lied to. Truly sad. The White House counts on ignorance to sustain it’s poll numbers.

WordsMatter on June 1, 2011 at 3:36 PM

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 Updated: June 01. 2011 1:52PM
Feds: Auto bailout losses will be less than $16B
**************************************************

The Treasury Department said in a May 10 report that its estimate of auto bailout losses as of March 31 is $13.9 billion. The Congressional Budget Office also estimates a $14 billion loss. The CBO has written off $8 billion of the government’s auto bailout as an unrecoverable loss.
==================================================

The Republican National Committee said the administration should do more to help taxpayers recover funds.
**********************************************

“It’s a good thing for Chrysler to get back on its feet and be able to provide jobs in states like Michigan, but with trillions of debt and deficits, the American taxpayers can’t be on the hook for billions of dollars in loans.

Chrysler is starting to do what every American does when they have a loan — pay it back. President Obama should put

as much effort into making sure the taxpayers are paid back in full as they have been in taking unnecessary victory laps,”

said RNC spokeswoman Kirsten Kukowski.

From The Detroit News: http://detnews.com/article/20110601/AUTO01/106010396/Feds–Auto-bailout-losses-will-be-less-than-$16B#ixzz1O3SrZ6hf

canopfor on June 1, 2011 at 3:41 PM

I would rather walk barefoot over salt tipped glass than drive a Chrysler or GM.

angryed on June 1, 2011 at 3:09 PM

Heh … got you beat. I’d slide down a razor blade into a pan of alcohol before buying GM or Chrysler.

HondaV65 on June 1, 2011 at 3:45 PM

So is anybody with an (R) challenging this dufus’ numbers?

AshleyTKing on June 1, 2011 at 3:19 PM

Anyone with a (D) … ?

davidk on June 1, 2011 at 3:46 PM

I have a question that is slightly off – topic but relevant on property taxes:

If property taxes (school taxes, etc.) are based on the home values, and home values have gone done:

(WSJ) Housing Imperils RecoveryHome Prices Sink to 2002 Levels; Consumer Confidence Falls as Pessimism Grows

Why haven’t property taxes gone down?

Colbyjack on June 1, 2011 at 3:48 PM

Deceitful cretins. All of them.

capejasmine on June 1, 2011 at 3:51 PM

Interesting Union Crap!
========================

Center For Automotive Research: Detroit Beating The Wage Gap
May 11, 2010
**************

Speaking at the same Detroit conference on the auto bailout that Steve Rattner and Ron Bloom attended, the Center for Automotive Research’s Sean McAlinden proclaimed the end of Detroit’s era of unsustainable high wages. In 2007, said McAlinden,

building a car in North America cost GM about $1,400 more per car than it did Toyota, thanks largely to a $950 health care charge.
**************

The AP reports that McAlinden’s estimate of GM’s average hourly worker salary is $69,368 while the transplant average is $70,185. Better still is McAlinden’s prediction that

between 2013 and 2015, Toyota could even be paying $10 more per hour than GM unless the Japanese company reacts and lowers wages.

And all it took was giving the UAW a $17.5 stake in the new GM!
****

After all, the UAW hardly comes out of this looking like roses with its membership…

unless we see these numbers used in a union counterattack.
**********************************************************

And that’s not a scenario that’s entirely out of the question. After all, GM may be beating the transplants on hourly worker wages, but compare white-collar salaried employee compensation, and it’s clear that GM still pays its non-hourly workers quite well by comparison. According to McAlinden,

Salaried workers at the Detroit automakers made $122,963; at foreign competitors, they made $81,506.

That won’t make the union too happy. But then, they won’t really have much to say until their VEBA fund is able to monetize its stakes in GM and Chrysler. And if those stakes don’t yield enough cash to meet VEBA’s obligations,

expect things to get nasty all over again.
******************************************

And then there’s the issue of pensions, which the GAO recently warned could compromise the whole auto bailout. It’s not clear if McAlinden includes these looming pension bills in his compensation analysis, but it’s likely he doesn’t considering GM has no public plan for how to deal with the looming crisis.

http://www.thetruthaboutcars.com/2010/05/center-for-automotive-research-detroit-beating-the-wage-gap/

canopfor on June 1, 2011 at 3:57 PM

Why haven’t property taxes gone down?

Colbyjack on June 1, 2011 at 3:48 PM

Colbyjack:A brilliant question,(taxes)come to mind,and
if said area,is sufferring economically,one
would think,that those (taxes)would be re-cal
culated!!

canopfor on June 1, 2011 at 4:02 PM

WTG Tim. Yes, let’s make Detroit the model of economic success for the rest to follow. We’ll all party like it’s 1930 in no time.

MJBrutus on June 1, 2011 at 4:08 PM

US taxpayers still hold 560-odd million shares of GM, against a $28-billion acquisition value, with shares currently running around $30 each. That’s some $11-billion that the US taxpayer is in the hole, even as we speak. Another $25+ billion in pension liabilities that got transferred to the US taxpayer through the Pension Benefit Guarantee Corporation, that we’ll be stuck with forever and ever, amen. GM is lo-o-o-ong way from being paid up.

Yeah, Timmy, you’re a real whiz-bang. Keep on truckin’ big fella. All your fear-mongering about the demise of GM and all those job losses:
- As if GM’s 27% market share was going to just evaporate and no other manufacturer would pick it up; ya know, 13-million buyers every year collectively deciding that they will never ever buy a new car again;

- As if GM parts manufacturers’ only client is/was GM new-model cars – notwithstanding the millions and millions of pre-2008 model cars that are still on the roads and will be for years and will break down and will need spare parts.

And the US Secretary of the Treasury can’t tell the difference between supply and demand. The demand was there all along; the jobs just might not have stayed in Detroit. Timmy & Company are truly a special kind of stupid.

ss396 on June 1, 2011 at 4:11 PM

Why haven’t property taxes gone down?

Colbyjack on June 1, 2011 at 3:48 PM

Colbyjack:A brilliant question,(taxes)come to mind,and
if said area,is sufferring economically,one
would think,that those (taxes)would be re-cal
culated!!

canopfor on June 1, 2011 at 4:02 PM

If the government truly cared about the people, it would lower it’s property and school tax burden if the values of people home’s have gone down.

Colbyjack on June 1, 2011 at 4:16 PM

ss396 on June 1, 2011 at 4:11 PM

Don’t forget the additional $16B-value special tax subsidy invented just for Government Motors:

Rasmusen Presents The Lawlessness of the GM NOL Ruling

Why are the democratics all in a kerfuffle over standard manufacturing deductions for oil companies, but this lucrative giveaway for Government Motors is not news?

slickwillie2001 on June 1, 2011 at 4:19 PM

Correct me if I’m wrong, it seems that, once upon a time, someone like Geitner had to put out something close to the truth because the MSM would put their accountants on it and tell the public whether the figures were true or not. It just seems that, now the administration can put out anything and never be challenged. Like how can the economic reports, that come out in the beginning of the month, always be corrected downward? You’d think that, sooner or later, the press would be asking questions from the source of those documents.

I’m just wondering if the press in this country is going to get it, before the next election, or after. If Obama and company believe these numbers, nothing will ever be done so it’s incumbent on the press to force them to check their figures.

bflat879 on June 1, 2011 at 4:21 PM

I have a question that is slightly off – topic but relevant on property taxes:

If property taxes (school taxes, etc.) are based on the home values, and home values have gone done:

(WSJ) Housing Imperils Recovery – Home Prices Sink to 2002 Levels; Consumer Confidence Falls as Pessimism Grows

Why haven’t property taxes gone down?

Colbyjack on June 1, 2011 at 3:48 PM

Home prices(values) have fallen and therefore the “appraised value” of your property has fallen.
The sticky wicket is that taxing authorities figure out how much money they want to collect, divide that by the total appraised value of the property in their district and set a tax rate that will bring in that revenue. In other words, since taxing authorities do not want to get by on less money, as values fall tax rates rise.

brtex on June 1, 2011 at 4:36 PM

I have a question that is slightly off – topic but relevant on property taxes:

If property taxes (school taxes, etc.) are based on the home values, and home values have gone done:

(WSJ) Housing Imperils Recovery – Home Prices Sink to 2002 Levels; Consumer Confidence Falls as Pessimism Grows

Why haven’t property taxes gone down?

Colbyjack on June 1, 2011 at 3:48 PM
Home prices(values) have fallen and therefore the “appraised value” of your property has fallen.
The sticky wicket is that taxing authorities figure out how much money they want to collect, divide that by the total appraised value of the property in their district and set a tax rate that will bring in that revenue. In other words, since taxing authorities do not want to get by on less money, as values fall tax rates rise.

brtex on June 1, 2011 at 4:36 PM

That and… we need to fund teacher unions ridiculous guaranteed salaries and benefits.

Odie1941 on June 1, 2011 at 4:44 PM

I have a question that is slightly off – topic but relevant on property taxes:

If property taxes (school taxes, etc.) are based on the home values, and home values have gone done:

(WSJ) Housing Imperils Recovery – Home Prices Sink to 2002 Levels; Consumer Confidence Falls as Pessimism Grows

Why haven’t property taxes gone down?

Colbyjack on June 1, 2011 at 3:48 PM

We just put cattle on the property and got our tax exemption.

nimrod on June 1, 2011 at 4:57 PM

Why haven’t property taxes gone down?

Colbyjack on June 1, 2011 at 3:48 PM

HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAAHAHHAHAAHAHAHAHA

GrannyDee on June 1, 2011 at 5:17 PM

Home prices(values) have fallen and therefore the “appraised value” of your property has fallen.
The sticky wicket is that taxing authorities figure out how much money they want to collect, divide that by the total appraised value of the property in their district and set a tax rate that will bring in that revenue. In other words, since taxing authorities do not want to get by on less money, as values fall tax rates rise.

brtex on June 1, 2011 at 4:36 PM

That and… we need to fund teacher unions ridiculous guaranteed salaries and benefits.

Odie1941 on June 1, 2011 at 4:44 PM

nimrod on June 1, 2011 at 4:57 PM

When the numbers went in the other direction, the Left told us we all needed to ‘Pay their fair share’ and all that pabulum.

Now that the values have gone down, the government be should be able to do with less.

The government is reaming us based on value we no longer have, if they are going to increase taxes when the values go up, they had better be ready to lower them when the values go down, IT’S ONLY FAIR!

Colbyjack on June 1, 2011 at 5:22 PM

14 billion down a rathole, and they call it victory

I wonder what color the sky is?

mojo on June 1, 2011 at 5:25 PM

Hasn’t the actual population of Detroit also fallen?

hawksruleva on June 1, 2011 at 5:37 PM

Colbyjack,
I live in one of the Detroit suburbs that has the 2nd most amount of office space next to Detroit. Since the start of this mess, my yearly taxes have gone down considerably. This year I received a revised tax bill shortly after the first one was received. This year my taxes went down a second time for a total of about 15%. Overall, my taxes have gone down over 30%. What does that mean? 30+ less police (Fire is volunteer), Over a hundred municipal employees laid off, all DPW employees will be outsourced next month. The school bus drivers and cafeteria works were outsourced 2 years ago. For the 3rd time, the city will vote to have a library or not, many other services have already been eliminated. This city was selected by CNN Money 4 years ago to be one of the 25 most livable cities in the country. The teachers just signed a revised contract to pay more of their benefits. Nobody here is sitting around nor are the taxes being kept artificially high. If you you wished to impugn this, you are full of **it. You should research the states revenue situation before making baseless allegations. Most other communities in the state are doing the same thing as well as the state government itself.

nedludd on June 1, 2011 at 5:37 PM

Correct me if I’m wrong, it seems that, once upon a time, someone like Geitner had to put out something close to the truth because the MSM would put their accountants on it and tell the public whether the figures were true or not. It just seems that, now the administration can put out anything and never be challenged. Like how can the economic reports, that come out in the beginning of the month, always be corrected downward? You’d think that, sooner or later, the press would be asking questions from the source of those documents.

bflat879 on June 1, 2011 at 4:21 PM

Good reporting could also eliminate the need for many federal agencies and inspectors. A true watchdog media is more effective in keeping business from harming consumers than any federal agency. Who would you rather see at your factory’s door – a government inspector, or Mike Wallace and a cameraman?

If the media spent time doing more real journalism, they’d be much more useful. Which might lead to fewer unemployed journalists. Sadly, like many liberals, they won’t understand the truth until it’s too late.

hawksruleva on June 1, 2011 at 5:41 PM

There is one big factor which I think you missed. The main reason that the unemployment rate has been declining in Detroit is because people have been leaving in droves for greener pastures like Texas. Fewer population = a lower unemployment rate with the same amount of jobs. Huge swaths of Detroit are blighted, abandoned buildings. The city is becoming a ghost town.

Theophile on June 1, 2011 at 5:52 PM

nedludd on June 1, 2011 at 5:37 PM

Struck a nerve have we?

“baseless allegations”? In most places, local taxes are based on property values, and those values have gone down, so what is baseless about that?

Why is it that it’s always assumed that government cannot do with any less than it’s getting no matter where you are in the city?

I know of folks trying to sell there home in the area and they cannot get some much as a serious nibble. Home values are down in the city and the rest of the country, why can’t the local governments do with less?

If people are moving out for better economic horizons, why do they need to keep on as many civil servants?

Colbyjack on June 1, 2011 at 6:15 PM

Well I can say with certitude that he didn’t use turbotax for his own tax returns!!

TheQuestion on June 1, 2011 at 6:19 PM

Did Geithner use Turbo-Tax to calculate Detroit employment?

*snort*

BigWyo on June 1, 2011 at 6:24 PM

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.

This is what Democrats call investments? How are our “investments different than more government spending?

cartooner on June 1, 2011 at 6:37 PM

colbyjack,
It didn’t strike a raw nerve when my point was that

a) Taxes went down and subsequently revenue.

b) the municipalities and the state did not scramble to “save” unnecessary programs and government. They acted to reduce the size of govt. That is your point about doing with less.

c) The baseless allegation is on your part. You continue the charade by still representing that govt is doing nothing. While you may know of people “in the area”, they are in my neighborhood and across the street. I know what they are going through. I have seen the signs out for years. Tell me, what does that have to do with taxes collected? Especially since Proposition A allows the state to raise frozen property taxes on a residence when it is sold.

d) After 25 months unemployed, I am working among those persons like me who have hung on to keep what we spent a lifetime accumulating. The employment situation is improving a bit but the character of employment has fundamentally changed. There are less employed, more who have moved out and others who have quit entirely. This is not captured by current way of accounting for employment but those who go through it understand what is happening. We have only one choice. Try and survive it.

e) They aren’t keeping on as many civil servants. That has been going on for years. Where do you pull your information from?

Oh, and if it means anything to you, I left this area many years ago during a similar economic situation. I have firsthand experience in what it cost our family to pick up and go. If you did the same then you understand. If you didn’t, you cheapen your comments further. My nerves stopped being raw long ago. Your comments can’t make them return to that state.

nedludd on June 1, 2011 at 7:02 PM

Or moved to Texas….where the jobs are

No, stay in Michigan. Don’t contaminate Texas with Michigan-thinking

olesparkie on June 2, 2011 at 6:31 AM