View Full Version : ‘Jobs Created or Saved’ Is White House Fantasy

10-31-2009, 01:19 AM
‘Jobs Created or Saved’ Is White House Fantasy: Caroline Baum Share Business Exchange

Commentary by Caroline Baum

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.

Last Samurai
11-01-2009, 07:11 PM
Politically astute, very fence sitting and means absolutely nothing. Not to mention being totally without method of quantifying "results" of claim.

Just the mere fact that the Great Porkulous Bill was passed "created" quite a few new jobs (at least in the Government as a new bureaucracy came into effect to "handle the money"). And what of those jobs when the money is totally passed out? One suspects that the Government, ever loath to shrink in size, will "Provide" continued employment, in some bureaucratic function. Therefore, one can assume that these are "created" jobs, will continue to exist. At what perpetual cost to Government Operations hereafter? (I seem to remember the figure of 80 Billion per annum being bandied about when the pass/no pass discussions were held.)

Although the objective was to "create" jobs (permanent) in the private sector. I am told that some construction jobs were "created" by the TARP....... and how long will those last? I am told that a lot of Teacher positions were created. Said positions, no doubt, will either have to be funded locally hereafter (to taxpayer disquiet in many instances, I'm sure) or will be "closed out" when the Fed giveaways end.

That covers some of the "created jobs".

As for the "saved" jobs......... how in the world does one quantify a job that MIGHT have been lost had it not been for the squandering of Billions of taxpayer money? Pure drivel, propaganda and selling point for the inastute if you ask me.

I have often thought of the TARP Billions as nothing more than a rather LARGE slush fund to give the Dems some money for Pork Projects, bequeathments to "favored political" entities, carrots to insure that the Congresscritters adhere to the Party Agenda in their votes and a rather BIG jump in our perpetual cost of Government Operations as well as a significant jump in our National Debt.

In short, it falls into Robert Heinlein's observation: "90% of EVERYTHING is crap." TARP is no exception.


11-01-2009, 08:09 PM
'Jobs Created or Savedí

Pure bullshit, he won't say just Created so tacts on "or Saved".
Anyone falling for this is just stupid.