Jobs Created or Saved’ Is White House Fantasy:

[rushmc 23]

Bush and Obama can share this one however, Obama is the one lieing about the jobs

And yes, this is an opinion piece

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Oct. 28 (Bloomberg) -- Heresy, thy name is Christina Romer.

Last week, the chairman of President Barack Obama’s Council of Economic Advisers -- a position that carried the title “chief economist” until Larry Summers took up residence in the White House -- testified to the Joint Economic Committee on the economic crisis and the efficacy of the policy response.

Here’s the executive summary in case you missed it:

The crisis: “Inherited.”

The economy: “In terrible shape” (the inherited one).

The shocks to the system: “Larger than those that precipitated the Great Depression.”

The policy response: “Strong and timely.”

The efficacy of the policy response: a 2 to 3 percentage point addition to second-quarter growth; 3 to 4 percentage points in the third; and 160,000 to 1.5 million “jobs saved or created,” a made-up metric if there ever was one. (More on that later.)

What was most puzzling about Romer’s Oct. 22 testimony was her comment on the waning effect of fiscal stimulus.

“Most analysts predict that the fiscal stimulus will have its greatest impact on growth in the second and third quarters of 2009,” Romer said. “By mid-2010, fiscal stimulus will likely be contributing little to growth.”

At first it was just fringe elements, such as conservative blogs and the not-really-a-news-organization Fox News, that pounced on Romer’s statement. Then other news outlets started to question her statement, which seemed to fly in the face of White House assertions that only a small portion of the stimulus -- $120 billion, or 15 percent -- has actually been spent. Most of the criticism of the stimulus coming from the president’s own party has been, “too little, too late,” and here’s Romer saying it’s kaput.

Thanks for That

Instead of being banished to the woodshed, Romer was consigned to the White House blog, where she slipped into professorial mode to explain the arcane distinction between the effect of the stimulus on the change in gross domestic product and its effect on the level of GDP.

Stimulus has its biggest impact on the growth rate of GDP when it’s implemented, Romer said, using a car-and-driver analogy: Step on the accelerator, the car goes from zero to 60.

Stimulus will keep the level of GDP and employment higher than they would have been even after the growth-rate effect fades, she said.

Her logic is impeccable. It’s her premise that’s flawed.

Dispensing Lucre

When the government distributes lucre or loot, people spend it. If your interest is national income accounting, spending other people’s money is great. Spending is a back-door way for government statisticians to measure what matters, which is the real output of goods and services.

But the government has no money of its own to spend; only what it borrows or confiscates from us via taxation. Oops.

“Government job creation is an oxymoron,” said Bill Dunkelberg, chief economist at the National Federation of Independent Business. It is only by depriving the private sector of funds that government can hire or subsidize hiring.

That’s why “jobs created or saved” is such pure fiction. It ignores what’s unseen, as our old friend Frederic Bastiat explained so eloquently 160 years ago in an essay.

Econometric models synthesize all sorts of variables and spit out a GDP forecast. From there they derive the change in employment using something called Okun’s Law, named after the late economist Arthur Okun, which describes the relationship between the two.

Fiction Lags Reality

Actual hiring seems to be lagging behind the model’s land of make-believe. For small businesses, which are the source of most job creation in the U.S., the government’s increased and changing role in the economy isn’t a confidence builder. Businessmen have no idea what health-care reform will mean for their cost structure or what whimsical tax policies the government might impose when it realizes those short-term deficits are running into long-term unfunded liabilities.

No wonder capital spending plans were at an all-time low in the third quarter, according to the NFIB monthly survey.

Only 30,383 jobs were created or saved by the American Recovery and Reinvestment Act, according to Recovery.gov, the government’s once-transparent Web site that has become a complex blur of numbers, graphs and pie charts. These are only the jobs reported by federal contract recipients. The Obama administration will report the larger universe of ARRA-related jobs on Oct. 30.

An extrapolation of what would have happened without the fiscal stimulus isn’t much consolation to the 9.8 percent of the workforce that is unemployed. Nor is Romer’s prescription for the economy and labor market very comforting in light of the trillions of future tax dollars that have been spent, lent or promised by the federal government.

“If you take your foot off the gas, the car goes from 60 back down to a slow crawl,” Romer said in clarifying blog post.

Gentlemen, start your engines.

(Caroline Baum, author of “Just What I Said,” is a Bloomberg News columnist. The opinions expressed are her own.)

Click on “Send Comment” in sidebar display to send a letter to the editor.

To contact the writer of this column: Caroline Baum in New York at cabaum@bloomberg.net.

Last Updated: October 27, 2009 21:00 EDT

"America will never be destroyed from the outside,
if we falter and lose our freedoms,
it will be because we destroyed ourselves."
Abraham Lincoln

[birdshit 0]

Yawn...

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Real GDP:

3rd quarter 2009: 3.5 percent
2nd quarter 2009: -0.7 percent

Looks like we are out of the recession
(By technical terms... If you never took a macro/micro economics class then please don't clutter the thread with your ignorance, poor grammar and bad spelling...)
http://www.bea.gov/newsreleases/glance.htm

and

The United States Department of Labor (which is run by Obama) doesn't look like it is lying:
http://www.bls.gov/news.release/empsit.nr0.htm

It shows that we are still shedding jobs and unemployment is at 9.8 percent, most of which were from Manufacturing, Construction, Utilities, and Professional Services.

The problem is that most average joes rely on biased sources for their news instead of going and looking at the numbers for themselves, and when rush tells them Obama is lying (correct spelling) they go out and post garbage...

Mmmkay?

[kallend 2,150]

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"At first it was just fringe elements, such as conservative blogs and the not-really-a-news-organization Fox News, ..."

At least one thing she wrote was true.

...

The only sure way to survive a canopy collision is not to have one.

[Para_Frog 1]

CBS was the first to take a swipe at the "report."

I guess you can say they're not real news now either since they're not lock goose step with the WH. Yes?

Story

In the administration's defense, it appears that the data coming in was provided by retards trying to boost the stimulus program for the anointed one. A little due-diligence would have meted it out however.

Edit: I TOTALLY want in on the college girl sex habit study though. Now THAT'S stimulus we can believe in.

- Harvey, BASE 1232
TAN-I, IAD-I, S&TA

BLiNC Magazine Team Member

[Lucky... 0]

Don't forget the 1st Q:

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3rd quarter 2009: 3.5 percent
2nd quarter 2009: -0.7 percent
1st quarter 2009: -6.4

So look at the improvement over a long period. Granted it's partially artificial via stimulus, but it could be worse, it could be that after the stimulus there would be no change.

[georgerussia 0]

It would be fun watching you arguing with dreamdancer. You both would copypaste each others to death.

Why would you publish someone's opinion? Are you unable to make your own?

* Don't pray for me if you wanna help - just send me a check. *

[mnealtx 0]

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The problem is that most average joes rely on biased sources for their news instead of going and looking at the numbers for themselves, and when rush tells them Obama is lying (correct spelling) they go out and post garbage...

Mmmkay?

As opposed to the benighted Obama supporters lapping up his bullshit like a remake of 2 girls 1 cup, I suppose?

Mike
I love you, Shannon and Jim.
POPS 9708 , SCR 14706

[FallingOsh 0]

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Don't forget the 1st Q:

Quote

3rd quarter 2009: 3.5 percent
2nd quarter 2009: -0.7 percent
1st quarter 2009: -6.4

So look at the improvement over a long period. Granted it's partially artificial via stimulus, but it could be worse, it could be that after the stimulus there would be no change.

3 quarters is long term?

Personally, and with no data to back it up, I'm afraid next quarter might be negative again. I think Q3 was highly artificial partially due to cash for clunkers and the first time house buyer incentive.

--------------------------------------------------
Stay positive and love your life.

[Lucky... 0]

Quote

Quote

Don't forget the 1st Q:

Quote

3rd quarter 2009: 3.5 percent
2nd quarter 2009: -0.7 percent
1st quarter 2009: -6.4

So look at the improvement over a long period. Granted it's partially artificial via stimulus, but it could be worse, it could be that after the stimulus there would be no change.

3 quarters is long term?

Personally, and with no data to back it up, I'm afraid next quarter might be negative again. I think Q3 was highly artificial partially due to cash for clunkers and the first time house buyer incentive.

I worte it was a long period. When 4 of 5 quarters are negative, the following 2 plus the included 1st Q is a long term I guess, it's all perspective.

Yea, it's a guess, I don't think they have projective data that goes the whole quarter that I would listen to. Let's get 1/2 way into it and then see how it looks.

I see an artificiality to the 3Q, but we'll see. There had to be one, that's how they did it in the GD, of course there they cranked up the tax rate to 67% under Hoover and 70's-80's under FDR and as much as 94% at teh peak of teh war, so tey way we pay for it has changed, now we're afraid to offend our mega-wealthy.

[tkhayes 348]

I ma sure that all the unemployed and homeless people are 'thrilled' by the news.....

[rushmc 23]

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I ma sure that all the unemployed and homeless people are 'thrilled' by the news.....

Yep

ABC even reported on the fuzzy math. Glad Bush and Obama with a little help from Congress spent that money, where the hell it went to

"America will never be destroyed from the outside,
if we falter and lose our freedoms,
it will be because we destroyed ourselves."
Abraham Lincoln

[tkhayes 348]

and another $2B to CIT Bank that just vaporized last night.....great.....

[rushmc 23]

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and another $2B to CIT Bank that just vaporized last night.....great.....

no shit....

None of these SOB's are "too big to fail". Time for them to go under. That is how the market corrects itself

"America will never be destroyed from the outside,
if we falter and lose our freedoms,
it will be because we destroyed ourselves."
Abraham Lincoln

[tkhayes 348]

wow - we agree on something....!

[Ion01 2]

Q-So how much does that house cost?
A- 160,000 to 1.5 million

Get real. Their just making up numbers! How do you even quantify "saved jobs" anyways? If you go with that train of thought you could claim the wars have actually saved 1.5 million people's lives! Why hasn't the media, or anybody for that matter, been all over obama for making the rediculous claim that unemployment wouldn't go over 8% yet we are almost at 10%! And now this?

[rushmc 23]

Quote

Q-So how much does that house cost?
A- 160,000 to 1.5 million

Get real. Their just making up numbers! How do you even quantify "saved jobs" anyways? If you go with that train of thought you could claim the wars have actually saved 1.5 million people's lives! Why hasn't the media, or anybody for that matter, been all over obama for making the rediculous claim that unemployment wouldn't go over 8% yet we are almost at 10%! And now this?

Because they still have the tingly leg syndrom for him.

We do agree however

"America will never be destroyed from the outside,
if we falter and lose our freedoms,
it will be because we destroyed ourselves."
Abraham Lincoln

[rhaig 0]

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wow - we agree on something....!

that's it.

run for the hills. The world must be coming to an end.

--
Rob

[SivaGanesha 2]

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Bush and Obama can share this one however, Obama is the one lieing about the jobs

And yes, this is an opinion piece

...

Even if Obama and/or Bush were telling the truth, the fact is that over 1.1 million new jobs were given to new immigrants over the same time--so even if Obama is correct, the stimulus has not created jobs on a net basis for American workers, as more jobs were definitely given away to immigrants than were alleged to have been created/saved:

White House Claims 'Stimulus' Saved/Created 650,000 Jobs (but it imported 1,125,000 foreign workers at same time)

Immigration in significant numbers may have a very important and positive role to play in good economic times, but the wisdom of such policies during bad economic times must be questioned.

"It's hard to have fun at 4-way unless your whole team gets down to the ground safely to do it again!"--Northern California Skydiving League re USPA Safety Day, March 8, 2014

[loumeinhart 0]

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Why hasn't the media, or anybody for that matter, been all over obama for making the rediculous claim that unemployment wouldn't go over 8% yet we are almost at 10%! And now this?

Because he's handsome and well spoken.

"Jobs saved" is complete bullshit. If the economy shows signs of growth then I could say it would have came back on it's own anyway. After all the economy IS cyclical.

I'm interested in the retail numbers for the upcoming holidays and also 4th quarter..