Wednesday, June 10, 2009
Kind of like Pay-Go lite
Mr. Obama's comments yesterday are a perfect illustration of just such a claim. In the months since Congress approved the stimulus, our economy has lost nearly 1.6 million jobs and unemployment has hit 9.4%. Invoke the magic words, however, and -- presto! -- you have the president claiming he has "saved or created" 150,000 jobs. It all makes for a much nicer spin, and helps you forget this is the same team that only a few months ago promised us that passing the stimulus would prevent unemployment from rising over 8%.
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Tony Fratto is envious.
Mr. Fratto was a colleague of mine in the Bush administration, and as a senior member of the White House communications shop, he knows just how difficult it can be to deal with a press corps skeptical about presidential economic claims. It now appears, however, that Mr. Fratto's problem was that he simply lacked the magic words -- jobs "saved or created."
"Saved or created" has become the signature phrase for Barack Obama as he describes what his stimulus is doing for American jobs. His latest invocation came yesterday, when the president declared that the stimulus had already saved or created at least 150,000 American jobs -- and announced he was ramping up some of the stimulus spending so he could "save or create" an additional 600,000 jobs this summer. These numbers come in the context of an earlier Obama promise that his recovery plan will "save or create three to four million jobs over the next two years."
Associated Press
The president should 'save or create' more jobs in Cleveland.
Mr. Fratto sees a double standard at play. "We would never have used a formula like 'save or create,'" he tells me. "To begin with, the number is pure fiction -- the administration has no way to measure how many jobs are actually being 'saved.' And if we had tried to use something this flimsy, the press would never have let us get away with it."
Of course, the inability to measure Mr. Obama's jobs formula is part of its attraction. Never mind that no one -- not the Labor Department, not the Treasury, not the Bureau of Labor Statistics -- actually measures "jobs saved." As the New York Times delicately reports, Mr. Obama's jobs claims are "based on macroeconomic estimates, not an actual counting of jobs." Nice work if you can get away with it.
And get away with it he has. However dubious it may be as an economic measure, as a political formula "save or create" allows the president to invoke numbers that convey an illusion of precision. Harvard economist and former Bush economic adviser Greg Mankiw calls it a "non-measurable metric." And on his blog, he acknowledges the political attraction.
"The expression 'create or save,' which has been used regularly by the President and his economic team, is an act of political genius," writes Mr. Mankiw. "You can measure how many jobs are created between two points in time. But there is no way to measure how many jobs are saved. Even if things get much, much worse, the President can say that there would have been 4 million fewer jobs without the stimulus."
Mr. Obama's comments yesterday are a perfect illustration of just such a claim. In the months since Congress approved the stimulus, our economy has lost nearly 1.6 million jobs and unemployment has hit 9.4%. Invoke the magic words, however, and -- presto! -- you have the president claiming he has "saved or created" 150,000 jobs. It all makes for a much nicer spin, and helps you forget this is the same team that only a few months ago promised us that passing the stimulus would prevent unemployment from rising over 8%.
It's not only former Bush staffers such as Messrs. Fratto and Mankiw who have noted the political convenience here. During a March hearing of the Senate Finance Committee, Chairman Max Baucus challenged Treasury Secretary Timothy Geithner on the formula.
"You created a situation where you cannot be wrong," said the Montana Democrat. "If the economy loses two million jobs over the next few years, you can say yes, but it would've lost 5.5 million jobs. If we create a million jobs, you can say, well, it would have lost 2.5 million jobs. You've given yourself complete leverage where you cannot be wrong, because you can take any scenario and make yourself look correct."
Now, something's wrong when the president invokes a formula that makes it impossible for him to be wrong and it goes largely unchallenged. It's true that almost any government spending will create some jobs and save others. But as Milton Friedman once pointed out, that doesn't tell you much: The government, after all, can create jobs by hiring people to dig holes and fill them in.
If the "saved or created" formula looks brilliant, it's only because Mr. Obama and his team are not being called on their claims. And don't expect much to change. So long as the news continues to repeat the administration's line that the stimulus has already "saved or created" 150,000 jobs over a time period when the U.S. economy suffered an overall job loss 10 times that number, the White House would be insane to give up a formula that allows them to spin job losses into jobs saved.
"You would think that any self-respecting White House press corps would show some of the same skepticism toward President Obama's jobs claims that they did toward President Bush's tax cuts," says Mr. Fratto. "But I'm still waiting."
The big "O" is so full of crap that it is more than scary...first of all you would think the pencil dick would know that there is no way the government track jobs saved only jobs lost, so that number of 150K jobs saved was plucked out of the sky,but I think you need to know what you are doing to figure that out. Pay-Go more bullshit and just another trick slogan to raise tax's. When is America going to wake up and look at what is happening, not only now, but in the future...makes me sick to see the America I grew up in and did business in going down the tubes...by the way has anyone figured out what Obama has sacrificed in this whole mess...has he taken a pay cut, changed his benefit package, asked Congress to do the same....AHHHHHH don't think so. You need to lead by example and so far the example by the pencil dick leaves a lot to be desired. Would love to have 30 minutes of his time.
Riegel's Rant
Frankly I don't know how you measure GDP either. But the reality is Obama inherited a MESS, and said it will take time to fix. Why don't we take a deep breath and wait. Jobs saved seems easy to me to measure, if a state plans on laying people off ala teachers and federal money comes in and they don't lay off the teachers that is a JOB SAVED.
Terry, Gross Domestic Product is well...
The total of good and services produced by the, you know, the nation.
And...
The saved jobs thing is well...pretty much made us and at best highly subject to interpretation.
And...
Mess he has but, Socializing the country is not exactly what the doctor ordered.
Now we have $80 oil, now, we did not blame or credit that to the previous administration but relate it to the free market, however, since your guy can work miracles, when is he going to fix this little issue which is soon to re whack the country.
And Rich(ie), remember the predict argument (vs. my prepare) guess you can't really predict...huh?
Your predict/prepare comment misses the point. A Keynesian responds to what is happening in the economy and creates policy that will move in the direction of the desired effect. See: 1993 Budget Bill. See: The whole post WWII free world economy except for Reagan/Dubya.
Laissez-faire says "C'est la vie" as we spiral out of control any which way. Supposedly, it will work better in the long run, when we are all dead. It is a great approach for the demagogues and the ignorant.
Our experience of the past eight years - make that the past 28 years - the past 64 years - shows that Keynesian policy is the choice of responsible adults.
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