Success No Matter What?

Don't believe the White House's economic hype

This Friday, September's job-loss total will be announced. Whatever the numbers, administration officials surely will tell us that life is better—because of them. "We brought the global economy back from the brink," President Obama said at the close of the G-20 meeting last week. "(B)ecause of the bold and coordinated action that we took, millions of jobs have been saved or created; the decline in output has been stopped; financial markets have come back to life."

This has been the president's theme: His so-called stimulus package, bailouts for politically connected banks and industries, ludicrously wasteful programs like Cash for Clunkers, etc. have saved America from the greatest disaster since the Great Depression.

But this theme runs up against some rather unfortunate facts.

In January, the administration's economic models warned that unemployment would hit 9 percent next year if its $787 billion "stimulus" wasn't passed. Passing it would keep the jobless rate under 8 percent before it begins to fall.

Well, the packaged passed—and unemployment in August rose to 9.7 percent.

Oops.

OK, economic forecasters make mistakes. Fair enough. But neither the administration experts nor President Obama will acknowledge that their models and strategy are flawed. Instead, they spin the numbers and proclaim success, insisting that the plan is working even though unemployment is higher than they said it would be.

For example, Christina Romer, chief of the president's Council of Economic Advisers, preferred to emphasize that the 216,000 jobs lost in August were about half a million less than six months before. Never mind that the economic strategy hasn't restored any of those 700,000 jobs previously lost. They'd rather distract us by focusing on the slowing rate of loss rather than the losses themselves.

But, New York University economist Mario Rizzo writes, to take credit for this is to imply that "in the absence of fiscal stimulus, the rate of increase in unemployment never falls." That's ridiculous. Should Obama get credit anytime things aren't as bad as they might have been?

"The stimulus apologists are ignoring the original prediction based on a model. By that prediction, the stimulus is doing harm," Rizzo commented.

As Harvard economist Greg Mankiw writes, "In light of the shifting baseline, it is impossible to hold the administration accountable for whether its policies are achieving their intended effects."

"The administration, however, has not been particularly forthright in admitting to this lack of accountability. Indeed, the act of releasing quarterly reports on how many jobs have been 'created or saved' gives the illusion of accountability without the reality."

This lack of accountability—this claim of success no matter what happens—should surprise no one. Many of us warned about it months ago. Remember, Obama didn't promise to create 3.5 million jobs. He promised to create or save that many. There is no way to test that. If you still have your job, does that mean Obama saved it? If an entrepreneur created a new job, in spite of Obama's destructive anti-business regulatory apparatus, does Obama still deserve the credit?

As I wrote in February: "Given time, the economy, unless totally crippled by government intervention, will regenerate itself. That's because an economy is not a machine that needs jumpstarting. It is people who have objectives they want to achieve. They will not sit on their hands forever waiting for government to 'fix' things. Instead, they work to overcome obstacles to get what they want. Some banks are struggling, but there are still people who want to lend money and people who want to borrow it. They will find each other without government help."

But I underestimated this administration. I expected it to say, in the face of continued rising unemployment, that the "stimulus" wasn't big enough. Instead, it claims success.

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • Nipplemancer||

    "jobs saved or created" is the most bullshit spin ever.

  • Kevin||

    Next he'll be trumpeting all the wars he prevented. I mean, I can list 100 countries we're not warring against in this year alone.

  • CaptainSmartass||

    Obama also prevented:

    * a second 9/11
    * 9.1 magnitude earthquakes in Los Angeles and San Francisco
    * slumbering Cthulu from awakening

    Prove he didn't do those things, you racist!

  • Upstater85||

    You even suggesting that someone could prove that is racist enough, RACIST!

  • Rimfax||

    It is this unfettered certainty in the face of unknowability that most damns his assertions, and the similar asertions of politicians of all stripes.

  • ||

    The current jobless trend was indeed predicted by real economists. As was the bubble.. as was the collapse.

  • Fist of Etiquette||

    If an entrepreneur created a new job, in spite of Obama's destructive anti-business regulatory apparatus, does Obama still deserve the credit?

    Stossel is such a Birther. Yes, Obama deserves the credit. He could have just as easily banned entrepreneurship altogether, couldn't he??? PRAISE HIM!

  • ||

    You're not really serious, are you?
    Oh, and is "Fist of Ettiquette" the name of your band?

  • KC||

    "saved or created" is one of the very smart words to use, it is not possible for a politicians to be wrong to make such statement.
    When people point to the fact that the unemployment rate is still rising, those genius in DC can just put on a face and say that the rate "could have" risen even more should there be no bailout or stimulus package.
    Yeah... Read More, like those guys are in fortune telling business...
    Question: how do you know the money "saved" jobs? You are not going to get reports from some HR dept to say that "we would have let x amount of worker go if not for the money"

  • Tony||

    Most economists feel we'd be looking at a decade or more of economic misery if not for the government intervention. There's still much work to do. Luckily we have real people in charge rather than the know-nothings of the opposite side who would happily let the country descend further into banana republic status for the sake of their dead ideologies.

    John Stossel's rosy fantasy world in which sheer American willpower would have turned the recession around in quick fashion is just as unprovable a claim as the ones Obama has made. Every good metric we see will be in spite of Obama, every bad one will be his fault. It must be so when facts are less important than maintaining purity of ideology.

  • ||

    "Luckily we have real people in charge rather than the know-nothings of the opposite side"

    News Flash: Congress passes the budget. The Dems have controlled congress for decades and here we are . . . I don't see how you can blame our current recession (worst since the Great Depression, I might add) on "the opposite side".

    If the previous administration presented a "bad budget" then Congress should have had the cajones to reject it - but they didn't . . . they just added more pork and continued to fiddle while Rome burned.

    It's simply not possible to put the responsibility for this mess on the minority party. They had a part in it to be sure, but the Republicans haven't controlled congress since the days of Newt.

    It's worth noting that the Dems have now quadrupled the national debt with this last budget and (ahem) 'stimulus' package.

    To put it bluntly: Only a total idiot borrows $400 to pay off a $100 debt.

  • Antony||

    News flash: you are a retard.

  • JohnD||

    I have yet to read a post by Tony that makes any sense at all. He is a kool-aid drinking maroon

  • ||

    Tony, you're living in fantasy that the evidence refutes

    Get you're head out of the Keynesaid bucket and smell reality. It has never worked.

  • ||

    And all those "most economists" have been wrong all the way down the line. Even you can't forever ignore the failure of "most economists" to provide any useful or predictive information.

  • Douglas Gray||

    Where is the actual evidence that the Stimulus made things better than they otherwise might be?

  • Justice||

    The thing that strikes me the most about these statistical numbers put out by the administration, not only the current powers but those that have existed for decades, is the remarkable similarity to the system outlined in 1984. Now, I know this book has been re-hashed and I know Orwell was a socialist, but it doesn't mean that the mantra of "WAR IS PEACE, FREEDOM IS SLAVERY, IGNORANCE IS STRENGTH" should be dismissed as an exclusively fictional idea. We continue our unconquerable entanglements in the Middle East fighting an intangible enemy, continue to regulate/"stimulate" our markets for their "stability" (which is a stupendous lie), while the masses continue to rely, usually on one major television media source, to give them the absolute truth. I see statistics that don't meet projected statistics which were created with questionable sources in the first place and I have to wonder how many people are even questioning their government anymore. Welcome to the New World Order?

  • abercrombie milano||

    My only point is that if you take the Bible straight, as I'm sure many of Reasons readers do, you will see a lot of the Old Testament stuff as absolutely insane.

  • nike shox||

    is good

GET REASON MAGAZINE

Get Reason's print or digital edition before it’s posted online

  • Video Game Nation: How gaming is making America freer – and more fun.
  • Matt Welch: How the left turned against free speech.
  • Nothing Left to Cut? Congress can’t live within their means.
  • And much more.

SUBSCRIBE

advertisement