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
RW-(the original)
August 18th, 2010
4:00 pm
You lefties are really gonna have to get to work spreading your sunshine and roses message.
@@
August 18th, 2010
4:00 pm
Wuh Oh!!!
Schools Not Using Stimulus to Hire Teachers
They’re saving it for an imminent rainy day
As schools handed out pink slips to teachers this spring, states made a beeline to Washington to plead for money for their ravaged education budgets. But now that the federal government has come through with $10 billion, some of the nation’s biggest school districts are balking at using their share of the money to hire teachers right away.
Bosch
August 18th, 2010
4:00 pm
RW,
“A year and a half later the government runs exclusively on continuing resolutions and “emergency” appropriations bills.”
Way to miss that point. Again, and why exactly is that? I don’t think it has so much to do with the branch of government that Obama runs.
CJ
August 18th, 2010
4:00 pm
Kyle’s entire argument comes down to this–> Obama projected no more than 8 percent unemployment. Unemployment is higher than 8 percent. Therefore, the stimulus didn’t work and should never have been passed and implemented.
That makes as much sense as saying a diet didn’t work and that it should never have been embarked upon in the first place because you planned on losing 100 pounds, but lost 80 pounds instead.
Linda
August 18th, 2010
4:02 pm
left @ 3:32, You didn’t respond to me after I left you a response today @ 1:32 on Kyle’s blog from yesterday. Where is it? I think this blog proves what I wrote.
2:34, It’s not a link unless it appears in blue. You must copy the entire site starting with http://
2:49, You said nothing about “trickle down.”
2:50, 3 good teachers. That’s all.
3:01, Hogwash!
3:05, In your dreams!
Southern Comfort
August 18th, 2010
4:04 pm
some of the nation’s biggest school districts are balking at using their share of the money to hire teachers right away.
Maybe they’re imitating the CEO’s that everyone’s so enamored with. Unlike the Fed, most or maybe even all states can not operate with a deficit. Sounds like they’re copying a page out of the Wall Street/Business strategy for economic downturns.
Kyle Wingfield
August 18th, 2010
4:07 pm
CJ @ 3:54: And you still haven’t explained why we should put faith in an inputs-based model when the output-based evidence suggests it did nothing of the sort.
CJ @4:00: Here’s the more precise analogy: Obama put us on a diet, we gained 20 pounds, and he’s telling us we would have gained 50 if we hadn’t been dieting.
@@
August 18th, 2010
4:11 pm
So…did the school’s require emergency spending?
Obviously not.
@@
August 18th, 2010
4:14 pm
SoCo:
Think stimulating unions ahead of November’s elections. That’s what Obama’s latest stimulus was all about.
It’s like watching a three-ring circus.
josef nix
August 18th, 2010
4:23 pm
BRUNO\
Thanks for an inspiring link…
SoCo
Remember back when folks took to yapping that schools ought to be run like businesses?
The Thread…
Barney FranK? I’m a guest here at Kyle’s so I’ll just keep my mouth shut…
Peter
August 18th, 2010
4:27 pm
Kyle whjat are Republican’s doing for the economy ?
Georgia is in shambles so how would Republican’s do any better currently ?
left wing
August 18th, 2010
4:29 pm
Linda @ 4:02 – Sorry, didn’t see your last post there.
OK, you’re questioning the timing of passage vs the unemployment rate. You are correct that ARRA passed on 2/11/09. Please review the following graph:
google.com/publicdatads=usunemployment&met=unemployment_rate&tdim=true&dl=en&hl=en&q=unemployment+rate+graph
And I admit my ignorance that I don’t know how to post hyperlinks here. If I leave the full url, it goes to ‘waiting for moderation’. If you’d share the technique, I’d appreciate it.
We are a capitalist society, but free market? Not so much. Free markets imply equal knowledge of both sides. Think tomato stand. You know what the price of tomatoes are at grocery stores, so you know if you’re getting a “good deal” or not. In this country, most markets have knowledge shifted to “them”. Let’s take health care. Insurance companies write policies which are “difficult at best” to compare between companies. Deliberately, I say. And you go to see a Doctor, specifically because of the knowledge he has. When he recommends a treatment, you tend to take his advice, because he has superior knowledge. No; we don’t really have free markets here.
Where I think we agree is that (especially since the middle ’70s) the tax burden has significantly shifted from the corporations and truely wealthy in this country to us. And I’m all for elimination of their tax loopholes. The problem is, (and I think you also agree) that truely neither Dems or Reps work for us. They get very generous campaign contributions from corporations and the truely rich to keep those loopholes in place. If you have a good suggestion as to how to fix this, I’d love to hear it.
Southern Comfort
August 18th, 2010
4:29 pm
@@
I don’t think unions have much to do with it. If that were the case, the unions would be all over the systems about not hiring teachers. I really wouldn’t know though.
left wing
August 18th, 2010
4:30 pm
Ooops; almost forgot. If you check the graph, it says unemployment was at 8.5% in Jan 2009.
Bosch
August 18th, 2010
4:31 pm
Peter,
“Georgia is in shambles so how would Republican’s do any better currently ?”
Duh, they’d cut taxes, cause we all know that fixes everything!
Bosch
August 18th, 2010
4:32 pm
SoCo,
There are no teacher unions in Georgia. Just saying.
Linda
August 18th, 2010
4:43 pm
Stand @ 3:53, We’ve had about $3 T of spending in 19 mts., more than at any period in history. The economic stimulus bill was the largest spending bill in the history of our country, probably in the world. Liberals complain about 2 wars that are unpaid for. The stimulus would have paid for both of them, a total of 14 yrs. as of 2/09. It could have paid off our debt to China.
To pay for this bill, banks are borrowing money from the Fed. Res. at almost zero per cent & loaning it back to the Treas. @ 4.5%, RATHER than loaning money to small businesses, since the risk with t-notes is almost non-existent & the rates are about the same. Spending money we did not have hurt the employers who provide 80% of jobs.
The US has run out of options. Bernake announced last wk. he would begin monetizing the debt, what he swore 6 mts. ago he would never do.
Moral hazard is the behavior created when a person or co. is insulated from risk & not having to suffer from the full consequences & responsibilities from their actions. Fannie Mae & Freddie Mac made the risky loans that they did (& cooked their books) because they knew the fed. govt. would bail them out, over & over again.
We take care of widows, orphans, veterans, the elderly, etc. but corporate welfare is morally wrong & unconstitutional. This is not just our money but that of our great great grandchildren & should not be used by politicians to buy votes from campaign donors. We are a free enterprise, capitalist country, not a socialist/Marxist centralized govt. We deserve the right to fail.
Southern Comfort
August 18th, 2010
4:45 pm
Bosch
I know that, but there are people who don’t, so I appreciate you posting that.
@@
August 18th, 2010
4:50 pm
Bosch:
Most of the school districts mentioned weren’t in Georgia. I don’t even think Georgia was mentioned.
Are you so eager to………
oh nevermind.
You’ve always been a waste of energy.
left wing
August 18th, 2010
4:52 pm
Linda @ 4:43 – Interest rates are down to zero; AKA the zero lower bound. And at the zero lower bound, you can do things like monatize debt (increase the money supply) without risk of inflation. Frankly, I think we need some more inflation. The Fed has a 2% target and we’re currently at 1.2%.
“To pay for this bill, banks are borrowing money from the Fed. Res. at almost zero per cent & loaning it back to the Treas. @ 4.5%”, – really? I thought to pay for the bill, they sell treasury bills on the market (which incurs debt on our part). How does a bank borrowing money from the Fed pay for the bill?
@@
August 18th, 2010
4:55 pm
SoCo:
If you’d read the article, you’d know that the unions are already pressuring the districts.
Teachers’ unions are strongly urging districts to use the money right away to keep class sizes manageable and to reduce the jobless rolls.
Unions….strong arming for Obama.
Bosch
August 18th, 2010
4:56 pm
@@,
That would probably be because GA balked at stimulus money that was offered, they did receive some, and that’s how they kept many teachers on payroll last year, but now the legislators are falling over themselves to try and get as much federal money as they can.
See, being married to a teacher, I hear things, instead of getting my information about education from unemployed teaching paraprofessionals.
@@
August 18th, 2010
5:01 pm
Bosch:
You’re a house husband?
unemployed teaching paraprofessionals.
Meeeoooowwww, girlfriend!!!!
I was the only teacher in the classroom. There would have to be another, before I’d qualify as a parapro. Last year I was a volunteer, this year I’m on voluntary furlough.
I’ll be back.
left wing
August 18th, 2010
5:02 pm
Um, Linda I don’t know what’s going on with the link I tried to post regarding the graph of unemployment, but I just tried it and it didn’t work.
Go to google; use ‘unemployment rate graph’ as the search arguement. The first link is google.com/publicdata. You can see the chart there.
josef nix
August 18th, 2010
5:05 pm
BOSCH
That paraprofessional snipe was a bit low…that group of people do more to keep our school running and bringing home the honors than just about any other
Southern Comfort
August 18th, 2010
5:05 pm
@@
I’ll have to read it after I pick up the lil one from daycare. That’s one of the places where I use Federal dollars to stimulate the economy. (ISH)
Linda
August 18th, 2010
5:09 pm
left @ 4:29, See the blue links above @ 1:55, 2:19, 2:20, 2:36, 3:03, etc They all start with http://
They do have have google in them. When you get to an article, copy exactly what is in the line at the top of your screen. Sometimes you have to space over to the far right to uncover what’s hidden if it’s a long header. It’s best to type the link on a separate line all by itself with a blank line above & below. Go to one of Kyle’s old blogs & practice, but don’t tell him I suggested it. Ha! It will turn blue on it’s own if you do it correctly. After you submit you comment/web site, try it yourself to see if takes you to the site.
Capitalism & free markets are basically the same & have nothing to do with buying tomatoes or insurance. You can be ignorant of BOTH sides as long as you are free to choose.
All the contributions in the world don’t replace the power of the people at the voting booth. Alvin Greene is a great example.
left wing
August 18th, 2010
5:13 pm
http://www.google.com/publicdata?ds=usunemployment&met=unemployment_rate&tdim=true&dl=en&hl=en&q=unemployment+rate+graph
left wing
August 18th, 2010
5:16 pm
sunofagun, it worked. I swear I tried it before but . . . . .
Try the link I just posted.
And I respectfully disagree about the definition. A condition of a free market is where both the buyer & seller have equal market information.
Linda
August 18th, 2010
5:43 pm
left @ 5:16, I have bought stuff from sellers who were loony as fruitcakes & buyers who buy Volts are equally loony. There are suckers in the market place.
Linda
August 18th, 2010
5:45 pm
left, It’s been fun. Gotta go.
left wing
August 18th, 2010
5:48 pm
GM files IPO paperwork: Automaker will be listed on U.S. and Canadien Exchanges
http://www.huffingtonpost.com/2010/08/18/gm-ipo_n_686420.html
DETROIT — General Motors Co. on Wednesday filed the first batch of paperwork required by regulators to sell stock to the public, a step that brings the automaker closer to its goal of shedding government ownership.
GM, leaner and more efficient than it was before a stay in bankruptcy protection last year, earned $2.2 billion in the first half of this year despite depressed U.S. auto sales.
Gee, I guess it was a good thing that President Obama didn’t let GM go bankrupt, after all.
CJ
August 18th, 2010
5:59 pm
Kyle: “And you still haven’t explained why we should put faith in an inputs-based model when the output-based evidence suggests it did nothing of the sort.”
Just because the output-based evidence supporting the stimulus contradicts your world view, it doesn’t mean it isn’t there. Look at job net losses before the Recovery Act was implemented and compare to net job losses after the Recovery Act took effect (beginning summer ‘09) . What is that? Something like 7.5 million jobs lost versus about 40,000? Look at economic growth before and after. Look at profits before and after. The output-based evidence overwhelmingly supports the effectiveness of the stimulus, irregardless of the fact that the “liberal” media won’t report it.
By the way, I accept your analogy. If switching from 1/2 pound burgers to 1/4 pound burgers mitigates the damage, then why not take the next step and switch to turkey burgers on wheat? Either way, your logic–or lack thereof–is flawed.
Bosch
August 18th, 2010
6:01 pm
Well josef, I know that. What snipe are you referring to? I’m sorry, but I take preference of information about the Georgia public school system from those who actually work in it — like I wrote, the one I happened to be married to.
F. Sinkwich
August 18th, 2010
6:18 pm
“Gee, I guess it was a good thing that President Obama didn’t let GM go bankrupt, after all.”
Uh, no.
GM would be in much better shape now had they declared bankruptcy and restructured a year and a half ago.
And the taxpayers wouldn’t be on the hook for $61 billion.
josef nix
August 18th, 2010
6:19 pm
BOSCH
This one…
“See, being married to a teacher, I hear things, instead of getting my information about education from unemployed teaching paraprofessionals.”
problem solved
August 18th, 2010
6:23 pm
Josef…You claim to be a liberal democrat….Yet you can’t stand..Al Franken, Barbara Boxer, Barney Frank or the President…What gives? Who else is on your list?
CJ
August 18th, 2010
6:31 pm
On this topic, there’s an interview in today’s NY Times with terrorist/Senate wannabe Sharon Angle (i.e., “If we don’t win at the ballot box, then we should exercise our 2nd Amendment rights.) about the dreaded, yet proven, Keynesian models.
“Q. Did Keynesian economics, the stimulus spending, work in the Depression of the ’30s?
Angle: No. And I think history has really proven that to be true. Most economists agree that the thing that really worked, which is a sad commentary, is the war.”
As I recall, that’s pretty much Kyle’s position too.
Again, these people are arguing with themselves. Although I wouldn’t be surprised, I haven’t seen faux-conservatives disagree that WWII had a positive side effect on our economic problems and returned us to full employment for the long-term. Essentially, they’re asserting that Keynesian economics and stimulus spending don’t work while arguing that Keynesian economics and stimulus spending (WWII) ended the Great Depression once and for all. The federal government created new manufacturing on a massive scale which put people to work, grew the economy,… If faux-conservatives realize the war improved the economy, then their contempt for the underlying economics (actually, arithmetic) rings hollow.
Oh yeah, that was 70 years ago. Kyle would have us believe that the laws of mathematics no longer apply. Nevertheless.
CJ
August 18th, 2010
6:31 pm
Here’s the link: http://www.nytimes.com/2010/08/18/us/politics/18angle.html
Hillbilly Deluxe
August 18th, 2010
6:39 pm
My view is that we are in a long-term downturn and stimulus/no stimulus, we’d be in about the same place. So given my druthers, I’d have tried it “no stimulus” for a while. We just have to hang on ride it out. While this hasn’t been as bad as the Depression so far, remember it lasted from roughly 1929-1942, give or take.
As a boy, my Grandpa used to tell me, “Boy, never miss a chance to keep your mouth shut”. You’d think by now politicians would have learned that but it seems they never do.
md
August 18th, 2010
6:40 pm
“the Obama administration now is making it easier to give the stimulus credit for hiring. It’s no longer about counting a job as saved or created; now it’s a matter of counting jobs funded by the stimulus.
That means that any stimulus money used to cover payroll will be included in the jobs credited to the program, including pay raises for existing employees and pay for people who never were in jeopardy of losing their positions.”
Smoke and mirrors – believe at your own peril………………….
F. Sinkwich
August 18th, 2010
6:41 pm
Well, since it was published in the NYT it must be true.
Krugman is published there too you know.
Southern Comfort
August 18th, 2010
6:45 pm
“Boy, never miss a chance to keep your mouth shut”.
If they did that, how would we get our daily rations of soundbites?
stands for decibels
August 18th, 2010
6:48 pm
HD @ 6.39, I can understand your druthers. I happen to believe we’d be in worse shape (who knows if it’d be significantly so, I’m inclined to say we would) if we’d gone the austerity route, but different strokes and all that.
Linda @ 4.43, thanks for the primer on conservative economic theory, but you haven’t actually addressed my hypothetical posted @ 3.53.
I don’t imagine anyone will because they’re assuming it’s some kinda “gotcha,” which it isn’t. I just wondered if anyone was willing to say that yes, XXX billion would be worth X percent less unemployment.
@@
August 18th, 2010
6:59 pm
Hillbilly:
“Boy, never miss a chance to keep your mouth shut”.
And my Dad always said “There’s a reason God gave you two ears and only one mouth. It’s so you can listen twice as much as you speak.”
josef:
I appreciate your support, but don’t worry yourself with what Bosch said. I’m not!
I’ve always found that Bosch overcompensates with petty pretentiousness due to a deficiency of intelligence and integrity.
No big deal.
stands for decibels
August 18th, 2010
7:02 pm
FS @ 6.41, did you bother to note that the Times link is to an interview transcript?
If so, are you seriously suggesting that the NYTimes deliberately mis-transcribed this interview with a nationally known Senate candidate? really?
stands for decibels
August 18th, 2010
7:02 pm
I’ve always found that Bosch overcompensates with petty pretentiousness due to a deficiency of intelligence and integrity.
You mean, like, he uses lots of big words when small ones would do?
@@
August 18th, 2010
7:09 pm
stands:
Would you prefer I call him a petty little prick?
I thought about it, but it’s the namecalling thingy. I wanted to avoid that.
————————————————————-
I went on a search to find out what immigrants thought about America
A Place to Call Home: What Immigrants Say Now
About Life in America
My greatest fear is that Democrats will exploit them for votes, thereby rendering them less productive than is their natural/cultural tendency.
Bosch
August 18th, 2010
7:12 pm
josef,
I’ll always take information from professionals who work in a field over those who, well, don’t.
problem solved
August 18th, 2010
7:13 pm
As we type away the last U.S. combat troops are on their way out of Iraq. Thank you Mr. President!