Jobs forecast not the only ‘dumb’ thing about stimulus (video)
Agreeing with Barney Frank twice in two months? Don’t worry, the Massachusetts Democrat wasn’t right about everything in his interview with Fox Business Network yesterday. But he did finally acknowledge what has been obvious to everyone outside the Democratic Party for some time now (starting at the 3:37 mark):
Here’s a transcript of the relevant part of the exchange:
President Obama, whom I greatly admire … here’s the mistake he made. When the economic recovery bill — we’re supposed to call it the recovery bill, not the stimulus bill; that’s what the focus-group people tell us — with the economic recovery bill, he predicted, or his aides predicted at the time, that if it passed, unemployment would get below 8 percent. That was a dumb thing to do. In the first place, nobody knows. In the second place, what they should have said is, if we pass it, it’ll be better than if we don’t pass it. (emphasis added)
But what about the supposed reliability of the Keynesian models Obama’s economic advisers used then — and still use now to assure us that the money that was spent really did work?
We all know why the Obama team put out that “dumb” counterfactual about what unemployment would do absent the stimulus — because otherwise, too few people were willing to believe that borrowing and spending $787 billion (now bumped up to $862 billion) was such a great idea. Now that the prediction has proven not just politically dumb but substantially wrong, why should we believe the new counterfactuals, based on the same models, being put out to convince us that the stimulus really did work — and that what we really need is more borrow-and-spend stimulus?
Isn’t that a little dumb, too?
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176 comments Add your comment
Grand Forks
August 18th, 2010
2:48 pm
“Jobs forecast not the only ‘dumb’ thing about stimulus ‘
Yeah, Obama being the dumbest thing of all.
left wing
August 18th, 2010
2:49 pm
No More Progressives! @ 2:38 – I would have thought that the tax cuts under Bush II were proof enough that tax cuts don’t work. Median income dropped, the stock market was basically flat until 2006 (and then crashed dramatically in 2007).
What proof do you have that tax cuts work?
Grand Forks
August 18th, 2010
2:49 pm
“As I pointed out above, the stimulus itself created/saved 2.5 million jobs.”
Where’s your proof, ma’am?
Grand Forks
August 18th, 2010
2:49 pm
“I’m really unhappy”
Your problem, not ours.
Dave
August 18th, 2010
2:50 pm
ah yes, the dubious “jobs saved” number… which no one really knows how to calculate and most of the numbers have been debunked by various sources.
From the Hill today:
“The report also accuses President Obama and Vice President Joe Biden of leveraging their White House platform “to promote websites designed to disseminate propaganda.” It argues the claims made on Recovery.gov about jobs saved or created by the stimulus are fictitious and misleading, citing news reports and individual instances in which the displayed figures appeared to be incorrect.
The report notes the White House responded to critical reports by changing the displayed metric from “Jobs Created/Saved” to “Recovery Funded Jobs Reported by Recipients” but says there is no evidence the reported figures are any more accurate.”
left wing
August 18th, 2010
2:50 pm
RW-(the original) @ 2:46 – No, actually I’m quoting from really wierd sources like the Council of Economic Advisors. After all, what would they know about, you know, economics?
If you can’t believe them, I guess you’re the one on the unicorn.
Grand Forks
August 18th, 2010
2:52 pm
“No matter what Obama and his team does, I find it hard to believe that you would analyze their actions with an unbiased eye.”
Awe, poor little bed wetter. Bosch, it sucks when your dad is away, don’t it.
Dave
August 18th, 2010
2:52 pm
Come on guys, we all know trickle-up poverty worked so well everywhere it was tried (ie the Soviet Union and Cuba)…..
left wing
August 18th, 2010
2:52 pm
Grand Forks @ 2:49 – I posted the link to the article from the CEA. You just have to be able to read to get your proof.
Bosch
August 18th, 2010
2:52 pm
Legitimate question here I don’t know the answer too, but is part of the reason that Obama is characterized as the “most spendingest POTUS evah” because he actually put the cost of the war in Afghanistan on the books instead of conveniently leaving it off like Bush did?
Grand Forks
August 18th, 2010
2:53 pm
“Ezra Klein at the Washington Post”
HAHAHAHAHAHAHAH!!!!! That retard can’t even count!!!!!
Grand Forks
August 18th, 2010
2:53 pm
“You just have to be able to read to get your proof.”
Awe, little bed wetter can’t actually tell us WHAT jobs were saved.
Grand Forks
August 18th, 2010
2:54 pm
“Legitimate question here I don’t know the answer too’
That’s your everyday life, Botch.
left wing
August 18th, 2010
2:55 pm
Dave @ 2:50 – Economists use the standard model of our economy to gauge the effectiveness of any economic stimuli (stimuli including tax cuts, tarriffs, devaluation of money, not just stimulus packages). All mainstream economists use the same model, both conservative and liberal. I’m sure Mr. Wingfield would agree.
Southern Comfort
August 18th, 2010
2:55 pm
Are you by any chance riding around town on a unicorn, sprinkling magic dust?
I didn’t think they’d be here until the Macy’s Thanksgiving Day parade.
Grand Forks
August 18th, 2010
2:56 pm
“Economists use the standard model of our economy”
Economists also think Obama is retarded.
stands for decibels
August 18th, 2010
2:56 pm
Remember when Bush said the Iraq war would cost around $100 billion.
They actually said it would be more like half that.
(I’d kinda forgotten about this, but apparently the Bush administration gave Lawrence Lindsey the boot for having the temerity to suggest in 2002 it was going to cost between 100-200 billion.)
Bosch
August 18th, 2010
2:57 pm
RW @ 2:46,
He better not be, that’s my gig!
left wing
August 18th, 2010
2:57 pm
Grand Forks – Since you can’t disagree with actual numbers and facts (and I provided links from respectible credible sources) you have to resort to really sad pitiful name calling.
It must be sad to live life as you.
Dave
August 18th, 2010
2:57 pm
Here’s some comforting news from The Street:
Double-Dip Recession a ‘Virtual Certainty’
Grand Forks
August 18th, 2010
2:58 pm
“Since you can’t disagree with actual numbers and facts ”
You didn’t post any, ma’am.
“you have to resort to really sad pitiful name calling.”
Poor whittle wib.
“It must be sad to live life as you.’
You mean wealthy?
Grand Forks
August 18th, 2010
2:59 pm
“and I provided links from respectible credible sources”
ST. Pete Times is not a credible source, ma’am.
Linda
August 18th, 2010
3:00 pm
Corporations & the rich don’t pay taxes. For example, in ‘08 Goldman Sachs made a a profit of $ 2 billion. They paid $10 billion in compensation & benefits (some using TARP funds). They paid taxes of 1% which happened to be 1/3 of the $43 million of what their CEO took home.
Our tax structure is a piece of junk. All is takes is one half-sober CPA to figure out the system. Money is moved around the world making it appear that earnings took place in foreign countries with low tax rates. They ship revenues offshore & defer taxes on them indefinitely while claiming deductions.
Between ‘98 until ‘95, 2/3 of all US corps. paid no taxes at all.
Corporations, the wealthy & the rich can afford the best (sober) CPAs.
If the Bush tax cuts expire on the top 2 income brackets, the vast majority of the people who will be be paying higher taxes are small business owners & unemployment will increase.
How many EMPLOYEES make $350,000, $500,000, & $700,000 per year?
left wing
August 18th, 2010
3:01 pm
From Mark Zandi, the chief economist at Moody’s:
economy.com/mark-zandi/documents/End-of-Great-Recession.pdf
“In this paper, we use the Moody’s Analytics model of the U.S. economy—adjusted to accommodate some recent financial-market policies—to simulate the macroeconomic effects of the government’s total policy response. We find that its effects on real GDP, jobs, and inflation are huge, and probably averted what could have been called Great Depression 2.0. For example, we estimate that, without the government’s response, GDP in 2010 would be about 11.5% lower, payroll employment would be less by some 8½ million jobs, and the nation would now be experiencing deflation.”
“When we divide these effects into two components—one attributable to the fiscal stimulus and the other attributable
to financial-market policies such as the TARP, the bank stress tests and the Fed’s quantitative easing—
we estimate that the latter was substantially more powerful than the former. Nonetheless, the effects of the fiscal stimulus alone appear very substantial, raising 2010 real GDP by about 3.4%, holding the unemployment
rate about 1½ percentage points lower, and adding almost 2.7 million jobs to U.S. payrolls. These estimates of the fiscal impact are broadly consistent with those made by the CBO and the Obama administration.”
Dave
August 18th, 2010
3:03 pm
Farewell “Saved or Created”: Obama Administration Changes the Counting of Stimulus Jobs*
“The Obama administration has taken some heat and mockery for using the nebulous and non-economic term of jobs being “saved or created” by the $787 billion stimulus program.
So it’s gotten rid of it.
In a little-noticed December 18, 2009 memo from Office of Management and Budget director Peter Orszag the Obama administration is changing the way stimulus jobs are counted.
The memo, first noted by ProPublica, says that those receiving stimulus funds no longer have to say whether a job has been saved or created.
“Instead, recipients will more easily and objectively report on jobs funded with Recovery Act dollars,” Orszag wrote.”
http://blogs.abcnews.com/politicalpunch/2010/01/farewell-saved-or-created-obama-administration-changes-the-counting-of-stimulus-jobs.html
left wing
August 18th, 2010
3:05 pm
Linda @ 3:00 – So, you’re arguing for increased corporate tax and a higher tax bracket on upper incomes (or for eliminating some tax loopholes for them)? I’m all for it!
RW-(the original)
August 18th, 2010
3:06 pm
Bosch,
Do you realize there’s never been an Obama budget passed in Congress?
Dave
August 18th, 2010
3:08 pm
Stimulus Created/Saved 650,000 Jobs? There’s No Way to Know for Sure
“It’s easy to ridicule the White House’s estimate that 650,000 jobs have so far been “saved or created” by the $150 billion spent so far from their $787 billion stimulus bill. That’s because while it’s possible to measure jobs created by the stimulus (for example, counting the number of construction workers on an infrastructure project funded by the bill), it’s a lot less clear how you measure jobs saved by it.
“One can search economic textbooks forever without finding a concept called ‘jobs saved’,” said Allan Meltzer, a professor at Carnegie Mellon University, in a memo to House of Representatives Republican leader John Boehner today. “How can anyone know that his or her job has been saved?”
The disparate estimates come down to the multiplier effect. There are jobs directly created, and then there are jobs that are created or saved because the direct beneficiaries are still employed. For example, the stimulus money may have financed a construction workers’ job, but it also may have saved the job of someone at the grocery store where he shops. There’s also the issue of government jobs saved. Many states were planning layoffs that were either canceled or postponed because of stimulus money. But again, those numbers are difficult to quantify.”
http://blogs.wsj.com/economics/2009/10/30/stimulus-created-or-saved-650000-theres-no-way-to-know-for-sure/
Bosch
August 18th, 2010
3:12 pm
RW,
An Obama budget? What is that?
Jefferson
August 18th, 2010
3:12 pm
At some point people should stop crying over taxes increases and plan for it, or you will be out of business.
Dave
August 18th, 2010
3:14 pm
Hmmm…. could we see a repeat?
FDR’s policies prolonged Depression by 7 years, UCLA economists calculate
“Two UCLA economists say they have figured out why the Great Depression dragged on for almost 15 years, and they blame a suspect previously thought to be beyond reproach: President Franklin D. Roosevelt.
After scrutinizing Roosevelt’s record for four years, Harold L. Cole and Lee E. Ohanian conclude in a new study that New Deal policies signed into law 71 years ago thwarted economic recovery for seven long years.
“Why the Great Depression lasted so long has always been a great mystery, and because we never really knew the reason, we have always worried whether we would have another 10- to 15-year economic slump,” said Ohanian, vice chair of UCLA’s Department of Economics. “We found that a relapse isn’t likely unless lawmakers gum up a recovery with ill-conceived stimulus policies.” ”
http://www.newsroom.ucla.edu/portal/ucla/FDR-s-Policies-Prolonged-Depression-5409.aspx
Kyle Wingfield
August 18th, 2010
3:15 pm
left-wing: We’ve already hashed out that Zandi report ad nauseum on here. Summary: The vast majority of the gains he estimates stemmed from monetary policy (e.g., the TARP, quantitative easing by the Fed) rather than fiscal policy like the stimulus; even the gains he attributes to the stimulus are input-based rather than output-based (i.e., his multiplier says that spending $X produces Y jobs, and we spent $X, therefore we must have produced Y jobs); and even these gains were lower in value than the stimulus money we spent to “achieve” them.
RW-(the original)
August 18th, 2010
3:15 pm
Bosch,
You’re the one claiming Obama has somehow put the cost of war on books that Bush didn’t, but the only place there’s any difference is in Obama’s claim to put those costs in his budget and his budget has never been passed into law so there isn’t any difference at all in the way those costs are currently being accounted for.
left wing
August 18th, 2010
3:19 pm
Dave @ 3:14 – That’s just right wing hyperbole trying to rewrite Roosevelt’s legacy. Now that those who lived back then are dead, it seems like an easy mark.
To me, the proof of Roosevelt’s policies is that he built a solid Democratic majority in the House which lasted for 40 years, and outside of electing Eisenhour (a war hero) President, Kept the Presidency in Democratic hands from 1932-1968. I’d say the people spoke volumes about what they thought of President Roosevelt’s policies.
Linda
August 18th, 2010
3:21 pm
left wing @ 2:32, I left a comment for you on the blog from yesterday. Go read it.
2:34, incomplete web site
2:49, Tax cuts didn’t cause the stock market to “crash.” Proof? history
2:50, The Council of Economic Advisers are O’s guys, 3 teachers who have never had a fruit stand.
3:01, It’s rhetoric.
3:05, It doesn’t matter what the tax rates are. Corps. nor wealth people PAY taxes.
Grand Forks
August 18th, 2010
3:22 pm
“An Obama budget? What is that?”
Like I said, Bosch is not the sharpest tool in the shed.
left wing
August 18th, 2010
3:26 pm
Kyle Wingfield @ 3:15 – Here’s a different article Mark did:
lacrossetribune.com/news/opinion/article_7e1ff8e8-9e83-11df-a30c-001cc4c002e0.html
“Critics have also objected to the fiscal stimulus as a case of government overreach and ineptitude. They could not be more wrong.
It is no coincidence that the recession ended when it did — about a year ago — just as the stimulus was providing its maximum economic benefit. Emergency unemployment-insurance benefits and tax cuts put cash into Americans’ pockets that they have largely spent, supporting sales and employment. And without help from the federal government, state and local governments would have slashed payrolls and raised taxes at just the wrong time. (Even with the stimulus, state and local governments have been cutting, and they will cut much more.)
Stimulus infrastructure spending is now kicking into high gear, and it will be a significant source of jobs through at least this time next year. And business-tax cuts have contributed to more investment and hiring.
Setting the record straight on the stimulus question is important because it will shape the current debate about how government should manage the still-fragile economic recovery. Last month, partly because of the misconception that the stimulus didn’t work, Congress was barely able to muster enough votes to pass another extension of emergency unemployment benefits. Not doing so would have been a serious error, putting the recovery in jeopardy.
The mistaken view that the stimulus failed also threatens to short-circuit federal assistance to hard-pressed state governments. That, too, would be a mistake.
Yes, the economy is still struggling, but not because the policy response failed. Our troubles persist, rather, because the problems at the root of the financial panic and the Great Recession ran so deep.
There have been missteps for sure, but government has served us well. We must not lose sight of that now, because the economy still needs help.”
@@
August 18th, 2010
3:26 pm
I just read another article by Professor Lessig, a self-proclaimed progressive, who says Obama is a defender of the status quo.
It’s becoming almost impossible to compartmentalize left-wingers these days.
Some are even doubting the stimulus, saying the economy would be improving had Obama just given money to citizens rather than the banking industry.
It’s like travelling thru a maze with left-wingers popping up at every turn…each with a different solution because………………….
Obama’s aren’t working?
Weird!
Bosch
August 18th, 2010
3:29 pm
No, RW, I was asking. But nevermind, I found out what I was looking for:
http://www.nytimes.com/2009/02/20/us/politics/20budget.html
Thanks though.
Dave
August 18th, 2010
3:31 pm
wow… there’s conservatives in the UCLA economics dept? That’s news to me….
But I’m sure he was popular at the time. You had a lot of people with their hands out and the gov’t right there to fill them….
left wing
August 18th, 2010
3:32 pm
Linda @ 3:21 – I saw you did. And I responded to it.
??? I just checked both links I left at the 2:34 post. Both worked.
2:49 – I didn’t say tax cuts caused the market to crash. I said they didn’t ‘trickle down’.
2:50 – 3 guys who know a heckuva lot more about economics than I do (and presumably you as well).
3:05 – And we agree on this. We need to cut the loopholes on corporations and the truely wealthy. Because they shift the tax burden to people like us.
3:01 – It’s Mark Zandi’s rhetoric. Argue with him.
RW-(the original)
August 18th, 2010
3:37 pm
Bosch 3:29,
That’s a pretty funny article considering what we now know. Thanks for the laugh.
Linda
August 18th, 2010
3:38 pm
“More people believe that Elvis Presley is alive than the stimulus created jobs,” said Rep. Kevin McCarthy, R-Cal.
(He died?)
Bosch
August 18th, 2010
3:39 pm
RW,
Feel free to enlighten us with what we now know to be false. Thanks!
RW-(the original)
August 18th, 2010
3:43 pm
Bosch 3:39,
The fact that he hasn’t even passed a budget isn’t enough of a clue?
Bosch
August 18th, 2010
3:45 pm
RW,
Aww, come on, tell us, I popped popcorn and everything, just waiting for the story.
@@
August 18th, 2010
3:49 pm
Rather long, but interesting.
The Matter of Deficits, Sovereign Default, and Modern Monetary Theory
Government’s smoke and mirrors.
Money, money, money, mooooney….the government has us chasing a figment of their imagination.
stands for decibels
August 18th, 2010
3:53 pm
I don’t suppose I’ll get an answer to my question @ 2.37, so let me post a hypothetical: Assuming for just a moment that absent the stimulus, unemployment would now be 10% instead of 9.5%, one could make a case that the half-percentage difference wasn’t worth the spending. I guess.
So, to put it plainly: Is anyone who feels the stimulus was wrong (i.e., too much, or the evilest-thing-in-the-history-of-evil, or somewhere in between, whatever) willing to say what percentage difference WOULD be worth the spending?
CJ
August 18th, 2010
3:54 pm
Kyle: “We’ve already hashed out that Zandi report ad nauseum on here. Summary: The vast majority of the gains he estimates stemmed from monetary policy (e.g., the TARP, quantitative easing by the Fed) …”
It’s good to see that Kyle, at least, agrees that TARP served it’s purpose. It’s also good to see that he agrees that the Fed can and does have a role in maintaining full employment, although they seem to have little interest in carrying out such duties these days.
“Today, the Federal Reserve’s duties fall into four general areas:
* conducting the nation’s monetary policy by influencing the monetary and credit conditions in the economy in pursuit of maximum employment, stable prices, and moderate long-term interest rates ”
http://www.federalreserve.gov/aboutthefed/mission.htm
On the other hand, no matter how many times Kyle cherry-picks the McCain/Palin economic advisor’s research (he’s right, we have been through this ad nauseum) to dismiss its findings, Zandi’s report also concludes that we’d have millions fewer jobs without the stimulus
RW-(the original)
August 18th, 2010
3:56 pm
Bosch,
Your story a month into the Obama administration says he won’t allow any accounting gimmicks and everything will be on budget with full transparency. A year and a half later the government runs exclusively on continuing resolutions and “emergency” appropriations bills.
Hope that’s clear enough for you, but somehow I doubt it.
Anyway, I’ve got to scoot.
Catch y’all later