Any minute now, recovery.gov will have a report that touts 650,000 jobs have been saved or created thus far by February's $787 billion stimulus package. In fact, the White House is already bragging about this on its blog. Am I the only person who's completely unimpressed?
According to a Washington Post article on this these 650,000 jobs, they were created or saved by the $150 billion in grants or loans having been dispersed through the stimulus. A little simple math shows that this means those jobs cost an average of $230,769 each. That seems kind of expensive to me, given that I doubt many of these jobs pay anything close to six-figure salaries.
Moreover, this is a virtual blip compared to the vast population of unemployed. That number was up to 15.1 million in September according to the Bureau of Labor Statistics. I suspect next week's October statistics will reveal it's even higher right now. Without the stimulus, if these jobs weren't saved or created, then the September unemployment rate would have been around 10.2% instead of 9.8%. I guess that's a little better, but that difference doesn't exactly blow your mind.
Indeed, let's revisit President Obama's chief economist Christina Romer's chart (.pdf) of unemployment expectations with and without the stimulus from January. I noted this chart in a post a few weeks ago, and added actual numbers as red dots:
If you look at the variance between the original unemployment estimate with and without stimulus, the administration was expecting around 1% lower unemployment with the recovery package by September (eyed by measuring the distance between the light and dark blue lines below the red dot for September). It got less than half that with 0.4%.
I would measure the effectiveness of the stimulus by how efficiently it's working and how well it's meeting expectations. As my above analysis shows, it fails on both accounts. That doesn't mean it has been completely useless. 650,000 jobs is something, just not impressive.
I mean...who really cares if you are impressed or not? Are you that narcissistic that you assume the jobs report is about how much it impresses you or not? The report is impressive, considering that in 9 months, The President turned around a situation that was threatening the world's financial well being. A complete disaster the The President inherited from Bush. This coupled with the banking crises....also created by the republicans...was threatening to bring the world to the brink. There will be many more jobs created in time...however most of us take this as a modest but positive beginning.
HAAHAHAHAHAHA! LOLLOLLOL ROTFLMAO! you really have drunk the liberal left kool-aid haven;t you?
Get you head in the sunshine, this article is spot on. The author is no more narcissist than you, er, actually he is much less a narcissist.
The White House jobs numbers are completely suspect and sound like a fantasy.
Go back and retake English and Math, Vintel.
ENGLISH: He says he is not impressed because the only person he can speak for is himself. You, by contrasts say "most of us take this as a modest but positive beginning." Who are you claiming (inaccurately) to speak on behalf of? Polls show that 62% of Americans think the stimulus did not help or actually HURT the economy.
MATH: And these job numbers prove Americans are right in their skepticism. His point that you missed was that if they had (instead of doing the normal congressional pork thing at an unprecedented level) simply taken the money and given it directly to Americans it would have created this number of jobs at $50,000 per year for 5 years. That would have been much better results than the paltry numbers now claimed by you and the Administration as "positive." As they stand, the numbers today are much closer to their predicted worst case no-stimulus-bill scenario than to what they predicted would happen once the bill passed. And if they had said these would be the results of the bill who in their right mind would have voted for it?
The toxic derivatives market was sheltered from regulation by Democrats Robert Rubin, Timothy Geithner, Larry Summers, Arthur Levitt in addition to Alan Greenspan. Geithner, who was a proponent of deregulation in the financial markets, is now Secretary of the Treasury.
The housing bubble was first started by the Clinton administration and continued with the Bush administration. Both democrats and republicans profited at Fanny Mae when the requirements for home loans were reduced over time to a critical level. The bubble just happened to burst during a Republican administration. I'm not going to defend anyone that was involved in this, but blaming "Republicans" for this mess is asinine.
We're now nine months into the Obama administration and a Democratic congress and what's been fixed? Have there been changes to fix the derivatives market? What are they doing to deal with the existing $600 trillion in over-the-counter derivatives still outstanding? All we've gotten is an additional trillion dollar debt and re-established the status quo in the financial market.
That $787 billion stimulus was also based on a theory (not a Law) called Okun's Law. Combined with a Keynesian economic strategy and a misunderstanding of what "correlation" versus "cause" means and you've got a nearly trillion dollar hole burned into the US economy with almost no return. We would probably be better off if Obama and Congress had done nothing.
In the period Feb - Sept 2009, how many jobs were lost?
In the periods Feb - Sept 2008/2007/2006, how many jobs were created and how many jobs were lost?
In the period Feb - Sept 2009, how much govt money was distributed in the form of grants & loans?
In the periods Feb - Sept 2008/2007/2006, how much govt money was distributed in the form of grants & loans?
That is to say - how does the job loss & creation during this period of 2009 compare to past years? Also, how does govt spending compare? Specifically -- would grants & loans that are being accounted to the stimulus pkg have been paid out anyway, even w/o the stimulus, in keeping with the normal govt distribution of grants & loans?
Wow! All that for only several trillion dollars? Who says the government is not an efficient economic producer?
That was sarcasm, in case anyone tries to take it seriously.
What about the jobs that were lost because the government has hijacked so many dollars from the existing or future economy? What about all the companies that this package has pushed across borders, like my company that is moving to Mexico?
Or are they only counting the upside?
to say republicans are the only ones at fault is utterly stupid.legislation was passed by barney frank and chris dodd in the past to ease loans to low income people.they were in charge of fannie and freddie and look how that turned up.they are both democrats and both are STILL in power.so hey democrats took control of both houses in 2006 and did you hear anything about an economic crisis?nope.As for republicans they were dumb enough to fall asleep on the wheel as well.as for the "stimulus" i think it will do more harm in the long run than what these mediocre numbers are suggesting.
1st off, stimulus ests had to be conservative to avoid "inflation" accusations and the Obama Adm has ben hampered by how their efforts have been snarked by the Right wing spin machine with a vested interest in their failure.
This has made it harder to change expectations, which are more critical for hiring and firing decisions.
dlw
this is just plain silly since it rests on the assumption that the entire package pays only for wages. Classic straw man argument.
also, since employment tends to lag behind the economy and so we can expect that there'll be more additional jobs created i n the months to come....
dlw
Vintel: Please explain the following:
1.) What's the difference between Daniel Indiviglio saying he's not impressed by the report and your assertion that the report is impressive? The language allows you to omit the words in brackets: "The report is impressive [to me], considering..." Why are you any less narcissistic because you leave out those words?
2.) Given the chart included in Indiviglio's piece, how can you consider the report impressive? The administration said with our plan, unemployment will be 8% in the third quarter, otherwise it will be about 8.75%. Then they got their plan and unemployment went to 9.5%. It looks to me like A) they were bad forecasters or B) they made things worse.
3.) According to the Department of Labor's Employment and Training Administration, initial claims for the week ending October 24 were 530000. That means, by the government's own figures, that they "created or saved" about 9 days worth of initial claims, at a cost of $787B.
If you're impressed by that... well, we'll have to agree to disagree. I think it's pretty lackluster.
Obama has a way of spinning 3 million jobs lost to 675,000 saved?? give me a break. Cut taxes for all, stop the stupid stimulus, or get ready for a complete collapse.
"Friends, I've been on a NEW diet, the Obama Diet, and I've lost 51 pounds."
But then I get on the scales and you look and you say, "You haven't lost 51 pounds, you've only lost one pound," but I'm telling you I've lost 51 pounds. And when you challenge me on the fact that I'm saying I've lost 51 when I've only lost one pound, I say, "Yeah, but that 50 pounds is 50 pounds I wouldn't have gained if I hadn't gone on the Obama diet."
So I've lost 51 pounds even though I've only lost one.
Well, Obama created and saved all these jobs, we're going to pay all these people to not work, we're going to raise taxes on the rich, we're going to redistribute a little bit and so forth. I mean that's how ridiculous this is getting, that's how phony and unreal it is.
And the thing is, you know, I've done enough diets, I know if you tell yourself enough this kind of thing, you can believe it. If I wanted to, if I'd go on a diet, I'd lost one pound, and I come here and tell you I've actually lost 51, it's either 'cause I think it's going to happen at some point so I'm just getting a head start on telling you the truth, or saved 51 pounds I haven't gained because I went on the diet, which has made me lose one pound.
I know you're scratching your heads. You should be. That's every bit as convoluted as any explanation Obama is providing us for how what he's doing "Creating or Saving Jobs" is going to work. All this double talk as unemployment in the USA continues to grow!
It is completely speculative to try and guess what might be otherwise, but when I think about what it would be like if we had a different policy at this moment here's what I'm imagining. Just as in the Great Depression when first Hoover then Roosevelt's initial reaction was to balance the budget by severe cutbacks, the economic shock would be intensified and reinforced, deepening the economic decline. Then, as before, destitute unemployed would be forced into tent cities, called Hoovervilles at that time. The largest part of the stimulus has gone to extended unemployment benefits and medicaide to help families stay healthy and in housing of some kind. Seen any Bush Cities or Obamaopolises? Program success. Stop trying to spin a political weapon out of everything and really imagine what the options look like.
Great logic. So, if we assume that had he not passed the bill there would have been a destructive civil war that would have killed 150 million people, then we have saved 150 million lives. Wow!
All it takes to declare the bill a success is to make up terrible things that would have happened if we didn't pass it.
I think we are best off using his predictions at the time the bill was passed. After all, they were the justification for passing it. And all were way, way off. And your silly retrospective doomsaying predictions are even further off.
it amazes me that people put $$$ before people. It is that very same mentality that got us into this mess to begin with. If it were not for the greed of the upper echelon and the ignorance of the lower, this country would have spent more of it's wealth securing it's infrastructure. Investing in education, health, jobs, is what could have adverted this financial downturn. One thing is for sure, if we as a country continue fight each other over the wealth the overwhelming majority of us do not posses, but the wealth possessed by the select few, we are headed for a much worse fate than economic recession. Stop being so hateful and ignorant... the only ones that prosper from that non-sense are the wealthy. if they can keep us focused on race and other idiotic falsehoods such as our president is a marxist and crap like that, the we can't focus on the real issue. The real issue is the money is there and they're hoarding it all. I don't know if anyone else has noticed, but at a time when Americans are hurting the most (black, white, hispanic, and so on) they have managed to get us focusing our frustration on each other, while they jack the prices up on everything from utilities to food to clothes, and made it more difficult to live the american dream. We all suffer while they make record profits. The money hasn't disappeared it just changing hands a record pace. So what if they spent 1 trillion dollars to keep some of us employed. the money is there why should we suffer all the time while they make record profits. One other thing don't be so foolish as to think that money sitting in the federal reserve belongs to us; "the people". Once uncle sam takes it, it's his.
Jamnel...if you are so interested in bringing up the educational level of the "lower echelon" why don't you start by educating yourself on economics. The rich don't hoard their money, they invest it. That is how they got wealthy in the first place! And when they invest it, that results in jobs for people like you and me. When you try to take it from them and redistribute it, that costs Americans their jobs. And when you borrow a trillion dollars from the Chinese for a crazy spending scheme that falls flat on its face like this one did, where are you now going to find enough rich people to pay off that debt?
If they can keep you focused on idiotic falsehoods such as the wealthy hoard money in vaults to keep everyone poor and ignorant, then you can't focus on the real issues. Issues like spending massively on pet projects by mortgaging your future for sums of money greater than can be squeezed out of the wealthy....
Just so I've got this straight, you're saying that we have to stop being distracted by accusations that the President is a Marxist so that we can concentrate on collectivizing the money being horded by the wealthy?
Side issue: but actually, if anyone were to literally "hoard" money, it would be good for everyone else, not good for the person hoarding it.
That is, if I earn a dollar, but never spent it, then that's like buying a share of a pie but then not eating any of it, leaving more for everyone to divvy up. If I burned that dollar, my gift to the world would be permanent: I did something to create that value, but then never asked for anything in return.
Literally holding onto money benefits everyone else in the entire economy who has money in their pockets that they do intend to spend.
First of all, as to your being "unimpressed", let me just say on behalf of the 650,000 people who still have those jobs, and with all due respect... screw you David.
Second, you pretending like the ENTIRE outlay of the stimulus was just supposed to be for salaries for those jobs and thus just the jobs alone each cost a couple hundred thousand dollars... is about the stupidest thing I've read all day. In David-land highways cost exactly as much as the paychecks for the construction crews and no more!
Third, that graph is ridiculously misleading and I strongly suspect you damn well know it. Those *very early* projections were drawn up based on the only data available at the time, which was completely overoptimistic estimates of how mach damage had already been done to the economy when the Obama administration took over. Shortly after that little graph you posted was released we all got word that oh, btw, GDP had actually been nosediving TWICE AS FAST AS INITIALLY REPORTED in the last quarter of 2008 (-6.2%, as opposed to the originally reported -3.8%) and all the projections were *completely changed*, yet here you are half a year later still pretending like everyone expected things to follow the old original projected lines from before that happened so a failure to do so is somehow a problem that shows the stimulus flopped. Gosh, nice work.
Yes, I know.. "Daniel", not David... I had another blogger on my mind while typing that up.
The blogs both left and right: Human tragedy as sport. Wow, aren't we sophisticated.
another point ... during this same time ... there have been more than a million immigrant workers allowed to enter the country (these are just the legal ones).
extrapolate the numbers from this:
http://cis.org/FirstQuarter2009Unemployment
I'm confused on just the chart part. It would seem to me that if you actually REDREW the original chart based on the actual economic data revisions, but then kept the same assumptions about projecting the amount of jobs likely to be saved (whatever those originally were), THEN it would make sense to compare this to actual jobs data as a measure of how far off those projections were (and thus how rosy they were).
But that's not what you've done. What you've done seems to mix two conflicting methodologies/datasets: how does that give us a useful comparison of either one?
The initial curves show what they thought the employment picture would look like with and without the stimulus. Obviously, they were way off, but the number of jobs saved or created should still have been the same, as the model assumed the same size of stimulus funding. It shouldn't suddenly be more expensive to create a job just because unemployment is higher.
So originally, in Q3, they assumed to have reduced unemployment by 1% with the stimulus. But using workforce size numbers, in conjunction with this report of how many jobs were saved/created, you can quickly determine that they would only have reduced unemployment by 0.4%.
In other words, even if you ignore how far off their original estimate was from where unemployment would be, the stimulus still came in far below their expectations for the number of jobs saved/created -- it only helped 0.4% of the workforce as opposed to their estimate of 1%.