Democrats insisted that they would usher in a wave of new jobs by speeding up spending on infrastucture, especially road construction. All across the US, signs began appearing that heralded the local traffic snarl as a product of the American Recovery and Reinvestment Act — Porkulus, as we came to call it. Did it do anything to create or even “save” jobs? The Associated Press says no (via Desmond L):
Ten months into President Barack Obama’s first economic stimulus plan, a surge in spending on roads and bridges has had no effect on local unemployment and only barely helped the beleaguered construction industry, an Associated Press analysis has found.
Spend a lot or spend nothing at all, it didn’t matter, the AP analysis showed: Local unemployment rates rose and fell regardless of how much stimulus money Washington poured out for transportation, raising questions about Obama’s argument that more road money would address an “urgent need to accelerate job growth.” …
AP’s analysis, which was reviewed by independent economists at five universities, showed that strategy hasn’t affected unemployment rates so far. And there’s concern it won’t work the second time. For its analysis, the AP examined the effects of road and bridge spending in communities on local unemployment; it did not try to measure results of the broader aid that also was in the first stimulus like tax cuts, unemployment benefits or money for states.
“My bottom line is, I’d be skeptical about putting too much more money into a second stimulus until we’ve seen broader effects from the first stimulus,” said Aaron Jackson, a Bentley University economist who reviewed AP’s analysis.
Even within the construction industry, which stood to benefit most from transportation money, the AP’s analysis found there was nearly no connection between stimulus money and the number of construction workers hired or fired since Congress passed the recovery program. The effect was so small, one economist compared it to trying to move the Empire State Building by pushing against it.
This is important for two reasons. If Obama tells the country that his stimulus plan worked, this analysis shows that it didn’t. Of course, we hardly need that anyway; Friday’s jobs report shows clearly that the economy has bled jobs at a constant rate all through 2009. The only reason the unemployment rate stayed at 10.0% was because so many people stopped looking for work at all. The number of people in the job market dropped to its lowest level since 1985.
The second reason? Obama is about to offer the hair of the dog for the national hangover. He wants Porkulus II, with even more spending on road construction that didn’t dent the employment picture at all the first time. AP’s analysis shows that it won’t create or save jobs the second time around, either.
In fact, the road-construction stimulus has a lot in common with Cash for Clunkers and the homebuying credit. All are temporary and limited attempts to get a one-time spike. It’s almost like a checklist rather than a strategy for creating long-term growth, a way to look busy without doing much of anything at all. Obama is stealing roadwork from the next few years and front-loading it into 2010. Not only will that not create much employment now, it will create a depression in the road-construction industry for the next several years.
It’s time for this administration to admit that it has no idea what it’s doing. Obama needs to fire his economic advisers and start listening to people who understand how to create long-term growth rather than government-managed misery.