Economics

He Might As Well Have Said 10 Million Jobs

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Harvard economist Greg Mankiw notes that President Obama's promise that the American Recovery and Reinvestment Act "will create or save 3.5 million jobs" is nonfalsifiable:

The expression "create or save," which has been used regularly by the President and his economic team, is an act of political genius. 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.

[via South Bend Seven

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  1. I seem to remember Obama catching himself and correcting his statement from “create” to “save or create” in an interview a while back. I had noticed the change in the rhetoric earlier and came to the same conclusion: bullshit.

    I’ll see if I can find the video…

  2. I hate it when politicians claim they only have to wave a magic wand in order for jobs to be created.

  3. I have here a list of …. 57 jobs that will be created or saved by the American Recovery and Reinvestment Act!

  4. Even if things get much, much worse, the President can say that there would have been 4 million fewer jobs without the stimulus.

    Well, duh!

  5. It may well exceed 10 million jobs. President Obama is once again displaying the wisdom of modesty and a humble domestic policy. The precious”free market” is shedding jobs so it is up to the government to save and create them.Just as it is the Federal Reserves mision to replace the loss of wealth in credit,housing and investment markets with new money it is up to the government to replace the jobs cut by the cruelty of the “invisible hand” of market capitalism.

  6. Obamatarian,

    I’m giving you an “invisible finger!”

  7. It doesn’t take a Harvard economist to figure that out

  8. Even if Obama had only said “create” instead of “create or save” 3.5 million jobs, there is no way that can be proven either because there is no way to parse the effect of the spending bill from them the effect of whatever normal economic recovery would be occurring anyway.

  9. With respect, Mr. Sullum, you are full of crap. Your assertion that Obama’s claim is non-falsifiable is just flat out wrong.

    See, Obama claimed to create or save 3.5 million jobs. The civilian labour force, according to BLS statistics, was 142 million. So if the US economy loses more than 138.5 million jobs, Mr. Obama’s claim is falsified.

    See? That wasn’t so hard. Next time check your figures before shilling for the Rethuglicans.

  10. Are you trying to say politicians are full of shit?

  11. It’s a claim that, to be sure, will be hard to verify given the relevance of counterfactual assessment, about which there will no doubt be disagreement. However, I don’t see how “save” is fundamentally different than “create” in this regard. No doubt you fine folks at Reason will contend that any post stimulus job creation is “just normal market rebound” and that “even more jobs might have been created by private rather than government spending”. That is, it will be just as difficult to adjudicate whether new jobs have been created by the stimulus rather than other forces as whether jobs have been saved. These difficulties, however, are not strictly insuperable and good faith assessments can be made, even if there’s room for disagreement; it’s discouraging to read an economist of Mankiw’s stature declaring in advance that he won’t be making a good faith effort to sort through the difficulties.

    Also, it’s neat that everyone’s read a little Karl Popper, but it’s getting a little tiresome to see “unfalsifiable” being tossed around seemingly without any awareness of eight decades of post-LSD developments in the philosophy of science…

  12. If the US economy loses more than 138.5 million jobs there will no longer be an Obama, a BLS or a US economy.

  13. See? That wasn’t so hard. Next time check your figures before shilling for the Rethuglicans.

    LOL

  14. On the contrary sir, we will all have jobs in Mr. Obama’s spanking new National Service. There will be a chicken in every pot, two cars in every garage and three eyes on every fish.

  15. However, I don’t see how “save” is fundamentally different than “create” in this regard.

    Strictly speaking, its probably not.

    However, if you say you are going to created 3MM jobs, people expect the number of people actually employed to grow by 3MM.

    If you say “save”, then even if the economy loses 2MM jobs, you can always say (nonfalsifiably) that it could have been worse.

    And for our Parsin’ President, nonfalsifiable is the Holy Grail of political discourse.

  16. The average dumb sheeple might be falling for this stuff, but the investor class sure isn’t, which is why they continue to take a giant steaming #2 right on his head.

  17. While it’s hard to disagree with Dr. Mankiw’s analysis, I’d like to see him point to some definitive, falsifiable statement about the economy that HE has made in public in the past few months. Most economists I’ve read have all been very circumspect, filling every statement with weasel words and loopholes.

  18. tgb,

    That’s just how we roll.

  19. By that logic I can claim that I will rape or ignore each of you.

    Because I will, you know…

  20. Jeff P.,

    Your last comment was a little to real for me. I insist you recant it.

  21. It’s actually 500,000,000 jobs.

  22. OOOHHH! I wanna play this game. I’m about to go eat some subway. The multiplier effect on my purchase will save or create 5 million jobs. Suck it, Obama!

  23. Naga, I never noticed what a pretty mouth you have…

  24. Squeal like a pig, boy!!!

    Jeff P.,

    That movie has made me terrified of Georgia and it’s inhabitants.

  25. Are those shipley’s boxers up on the flag pole?

  26. Jeff P.

    That come with reach-around right? (reach around, that is Obama’s definition of bipartisanship. Anyway, I like the boys to be stretched and twisted a little, but not too much.

  27. I mean, bipartisanship is where the Rethugs take it up the ass, but if they say nice things, Obama throws in the, er, reacharound.

  28. So if the US economy loses more than 138.5 million jobs, Mr. Obama’s claim is falsified.

    Not if it is claimed that the number below 138.5 million jobs would have been even lower if it had not been for this stimulus package.

    Of course the focus on jobs is a bit strange to begin with; higher productivity is what creates more wealth to be spread around a society, not more jobs.

  29. Actually the only way its falsifiable is if employment drops to 3.4 million people total. Otherwise he can just claim it would be worse than it is.

  30. Good point, Toxic. However, I think if you scanned above, even you would agree, Kunal said it better.

  31. Politician makes nonfalsifiable statement, film at eleven…

  32. “Of course the focus on jobs is a bit strange to begin with; higher productivity is what creates more wealth to be spread around a society, not more jobs.”

    It’s not really strange – it’s all part of the “entitlement” mentality that the Dems have been boosting for decades. The “job is a right” crowd thinks it’s the government’s responsibility to make sure they have one.

    You are absolutely right about higher productivity being the source of prosperity. Unfortunately we aren’t likely to be getting that with policies that continue to punish success and reward failure.

  33. I think if you scanned above, even you would agree, Kunal said it better.

    Thats because I don’t shill for the Rethuglicans like you Libertardians with your failed extremist ideology and your invisible hands and what not.

  34. Can I get a reach around from the invisible hand while the feds f*ck me?

  35. Saved jobs is not the same thing as jobs lost. If the statement was “I will keep X number of jobs from being lost”, your argument is correct. By saying “”I will save X number of jobs and not giving a metric by which to measure what a saved job is useless. In theory employment could fall to only 3.5 million people working and his statement is still true. He in fact did save 3.5 million jobs, but138.5 million jobs could be lost and still make the statement true.

    The phrase is not an accident. It positions him to be correct and claim victory in as many possible scenarios as possible.

    Semantics are a bitch and those crafty speech writers are so damn good with them.

  36. Dear god I should edit before posting. Sorry for the marginally coherent post.

  37. Congratulations, Sullum. This is the most brilliant thing you have ever posted.

    You have finally realized that outcomes observed after relatively minor changes to a large chaotic non-linear system cannot be directly tied to the changes made, because you never know what would have happened if you hadn’t made the changes!

    So can we all get over the “My favorite politicians implemented policy X, and something good happened not long thereafter! Therefore causation! Meanwhile, when my dis-favored politicians implemented Y, something bad happened soon after! Therefore, causation!” idea that everyone on earth seems to have. Why people are incapable of understanding basic philosphy is beyond me….

    post hoc ergo propter hoc

  38. Kunal-

    This libertarian is not a shill for the republicans. Watch those strokes, don’t brush so broadly.

  39. Thats because I don’t shill for the Rethuglicans like you Libertardians with your failed extremist ideology and your invisible hands and what not.

    Kunal, I am afraid you were too subtle initially. I appreciated all of it, at least.

  40. Epi,

    Subtlity is only one of my weapons. Apart from ruthless efficiency and a fanatical devotion to the Pope.

    Oh yeah, and also surprise.

  41. libertymike missed obvious sarcasm? WHAAAAAAAAA??!?!?!??!?!?!?!?

  42. I’m giving you an “invisible finger!”

    Get yer own handle!

  43. Chad:

    There’s a BIG difference between “random acts of spending stimulate the economy” (or whatever your favorite example may be) and “my rock keeps away tigers.” If Obama jacks up spending with the intention of creating jobs and, whaddayouknow, we create 4 million jobs in the near term, then I’ll accept that it’s not all voodoo.

    People have to think. Politics may not be a science, but we can’t let that lead us into “brain in a jar” nihilism.

  44. I think I remember reading that this number is actually based oin CBO estimates. Apparently, the people over there have decided that without the proposed stimulus, the economy will have X jobs by some date in the future. With the stimulus, the economy will have Y jobs on that same date. The difference between Y and X is something like 3 million jobs.

    The idea being that there will be 3 million extra jobs because we passed this bill.

    Now, it is unclear how many of those will be jobs specifically created by the stimulus, and how many will be old jobs that were simply carried through (saved) but otherwise would have been lost.

    Now, just because this explanation makes sense doesn’t mean it’s true, of course. But that’s where the number and the rhetoric come from.

  45. libertymike missed obvious sarcasm?

    He wasn’t the only one. A number of people did. Luckily, my sarcasm detector is set on “Steven Wright”.

  46. I retuned my sarcasm detector after the Neil fiasco. That one still smarts.

  47. I have my sarcasm set on total apathy. I am not familiar with this . . . “sarcasm detector” . . . of which Epi and Warty speak. I just naturally assume everyone is full of shit while any and all links are rickrolls.

  48. Naga Sadow | February 19, 2009, 8:55pm | #
    I have my sarcasm set on total apathy. I am not familiar with this . . . “sarcasm detector” . . . of which Epi and Warty speak. I just naturally assume everyone is full of shit while any and all links are rickrolls.

    I sent an email to my nephew with the tag line, ‘I know what your mum got you for Christmas’, with a rickroll link attached.

    He wrote me back. ‘I blame all of my trust issues on you, uncle.’

  49. I am disappointed that the media does not simply point this out occasionally for their less savvy readers/viewers. For instance, this Reuters story has a short line mentioning the 3.5 millions jobs:

    “Democrats hope to save or create 3.5 million jobs.”

    How hard would it have been to make that line read:

    “Democrats hope to save or create 3.5 million jobs, though it is not clear what is meant by ‘save or create’, and thus it will be hard to determine whether this legislation is successful.”

    I mean, even Joe Biden offered real analysis on this bill:

    “If we do everything right, if we do it with absolute certainty, there’s still a 30% chance we’re going to get it wrong.”

    Why doesn’t the media explain this? They are totally useless.

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