Keith Hennessey captures this moment of both media skepticism and surprising revelation from CBS’ Morning Show on Friday. Harry Smith interviews Jared Bernstein, chief economic adviser to VP Joe Biden, and presses him on both the administration’s announcement that economic recovery has begun and on increasing joblessness in the near term. Bernstein, at the 2:38 mark, then makes an astonishing assessment:
Harry Smith: When does this economy start to create jobs on its own?
Dr. Bernstein: As far as the overall economy is concerned, private sector forecasters tell us that by the second half of next year, net job growth should be positive, unemployment should be coming down.
How long out will that be? Eight months. Bernstein predicts that unemployment will continue to rise through next summer, at which point we will start to enter positive job growth and the numbers will only start to decline from their peak.
This prediction has been made by the Obama administration before, however. In Christina Romer’s argument for a massive stimulus package in January of this year, this chart showed that Romer expected positive job growth to start in the third quarter of 2010 — if Congress didn’t spend hundreds of billions of dollars on stimulus:
According to the administration’s promises in January, spending all of that money would have meant limiting unemployment to 8% and positive job growth in the preceding quarter. The upper line tracks what Romer predicted would happen without the massive stimulus spending, which is that unemployment would continue to rise through 2010Q3 before finally starting to decline.
Bernstein’s projection clearly indicates that Porkulus has utterly failed. We would have had the same unemployment curve without it, only also without incurring almost a trillion more dollars of debt. It’s not too late for Congress to take a page from the Pay Czar and claw back the remaining Porkulus money.