Spinning Stimulus Statistics

President Obama’s “stimulus” package has been dogged by controversy since its enactment.  There have been questions about the accuracy of reports of jobs “saved or created” by the stimulus spending, claims that the money really was used mostly to maintain public employee jobs and to allow state governments to defer their own deficit-reduction efforts, and an admission by President Obama that there were no “shovel-ready” projects to be funded, notwithstanding what was represented when the “stimulus” legislation was enacted.

The most recent analysis of the President’s Council of Economic Advisers, released Friday, estimates that the “stimulus” has cost $666 billion and produced between 2.4 million and 3.6 million jobs.  The 2.4 million jobs estimate was developed using the “CEA Multiplier Model” and the 3.6 million estimate was based on the “CEA Statistical Projection Approach.”  Republicans and The Weekly Standard have used the lower estimate, divided it into the total cost of the “stimulus,” and concluded that each of the 2.4 million jobs cost the taxpayers $278,000.  The White House responds that such an analysis is biased because it uses the lower jobs estimate and does not consider the tangible items that were built using “stimulus” funds.  Whose spin is closer to the truth?  When you consider that both jobs numbers are based on theoretical economic models and undertake the slippery task of estimating jobs “saved,” you may as well argue about how many economists can dance on the head of a pin.

Outside the Beltway, I think there is general consensus that the “stimulus” legislation did not deliver much bang for the buck.  The “stimulus” was sold as a way to massively jump start the economy, prevent high unemployment, and ensure a speedy recovery.  Those things clearly haven’t happened.  We’ve spent more than half a trillion dollars and we are still facing a stagnant economy characterized by high unemployment and low growth.  It’s as if we’ve gone on a bender, the intoxication has worn off, and we’ve now awakened to a painful hangover and a gigantic bar tab that we really couldn’t afford in the first place.

Please, Not More “Stimulus”!

Tomorrow President Obama gives his State of the Union speech.  Advance stories indicate that the speech will focus on the economy — no surprise there! — and that the President will call for more government “investment” in science, education, and innovation.

“Investment” is, of course, just a code word for more government spending.  The only reason the word “stimulus” isn’t used any more is that it has acquired deadly connotations for American voters, who recognize that the initial “stimulus” package was a leaden failure that grossly increased the federal debt without producing much in exchange. Doesn’t “investment” in “education” and “science” sound an awful lot like using our tax dollars to pay for more government jobs?  And as for “investment” in “innovation,” is there really anyone out there who thinks that members of Congress or government bureaucrats could distinguish true innovation from a cracked pumpkin?

We may find out tomorrow that the President has a great plan — but until then, color me skeptical.  Whenever I hear the argument that the way out of our ongoing recessionary doldrums is still more government spending, I have the same horrified and anguished reaction as the poor, lost soul Richard depicted on the wonderful bit of “kid art” accompanying this posting.

Our Government, Dr. Frankenstein

As the stimulus program winds down, we learn more about how our federal dollars were spent.

The latest story reports that the inspector general for the Social Security Administration examined the $250 payments made to senior citizens under the stimulus bill.  The inspector general determined that 72,000 of the $250 payments — $18 million in all — were made to the dearly departed, and another $4.3 million went to 17,000 prison inmates.  Nice to know that our frankensteinian government is seeking to stimulate the dead, and the imprisoned!  Is anyone checking to see whether the trade in cigarettes and illicit goods at San Quentin has flourished as a result?

The article reports that a little more than half of the improper payments to those already dead were returned, and I suppose we should be grateful that so many relatives were honest.  The article makes no mention of how many prisoners acted similarly, however.

Low Standards

The White House has issued a report stating that the stimulus spending, so far, has occurred on time and under budget, with fewer claims of outright fraud and abuse than some people expected.  The report also argues that the stimulus spending has been an economic success story.

There is no need to comment on the latter point, because the economic statistics and the common experiences of average Americans tell the tale.  What I find humorous about this latest report is the suggestion that we should be grateful that the process of spending hundreds of billions of dollars was “relatively free” of claims of outright fraud.  Well, thank goodness!  We’ve managed to avoid rampant criminal behavior!  Should that really be the standard by which we judge the effectiveness of a federal spending spree that has contributed mightily to enormous budget deficits and a sickening rise in our national debt?

Worst “Stimulus” Story Yet

The Los Angeles City Controller has released a report that the $111 million Los Angeles received in “stimulus” funds “created or retained” exactly 55 jobs.

With stories like this, will people please stop trying to convince us that the “stimulus” bill was anything other than a gross exercise in pork barrel spending that utterly failed to deliver what was promised?


President Obama has proposed another form of stimulus legislation to address our economic woes.  This time, his proposal seeks to spend $50 billion to rebuild more roads, railways, and runways.

It’s hard to see how this $50 billion stimulus proposal could have a significant immediate impact on the economy or unemployment.  After all, last year’s much larger stimulus bill, which was supposed to target “shovel-ready” projects, didn’t deliver what was promised.  In addition, the President’s latest proposal would have to go through the ponderous government contracting process, which means that the money would not be spent quickly.  Cynics no doubt will argue that this proposal is a political gambit that is intended only to give President Obama and congressional Democrats a platform to criticize Republicans, who clearly will oppose more spending in view of the nation’s budget woes, as heartless and indifferent to the plight of the many unemployed.

Let’s take the President’s proposal at face value, however.  In view of the apparent failure of the first stimulus package, isn’t it curious that more stimulus spending is all the President’s economic team can come up with?  Polling data is showing that a broad majority of Americans think that the first stimulus legislation was a colossal waste of money.  By going back to the well with another stimulus proposal notwithstanding the polls, the Administration is showing a remarkable tin ear.  In view of this proposal, won’t voters in November be well within their rights in concluding that a vote for congressional Democrats really is a vote for still more borrowing and spending?  Given the mood of the country, that conclusion probably won’t bode well for the President or his allies.

Tough Times On Labor Day

Times are tough on this Labor Day.  You can’t pick up a newspaper or visit a news website without seeing discouraging reports on employment, manufacturing, housing, and other economic indicators.  Labor Day marks the traditional end of summer and beginning of autumn — which means that the “Recovery Summer” has come and gone, with nary a recovery in sight.

What does it all mean?  Different observers are reaching fundamentally different conclusions.  This writer thinks our economic problems are attributable to the fact that American workers are not as unionized as their European counterparts and are powerless to stop capitalist employers from taking advantage of a bad job market.  This writer thinks we need to cut taxes and cut regulations that may be hindering small business growth and job creation.  Others say we need to cut government spending before the American economy becomes permanently crippled by unsustainable levels of government debt.  In direct contrast, still others, like this columnist, urge the government to engage in even more stimulus spending.

It seems that the only thing everyone can agree on this Labor Day 2010 is that there is no consensus on how to proceed.  This may be a good thing, however.  We have an election coming up, and Americans will be presented with political choices that reflect different economic philosophies.  With no “expert” consensus to bludgeon them, I think the average American will fall back on their common sense and be guided by their own experiences in deciding how to vote.  The collective decision-making of average Americans, acting on their own common sense and practical experience, have tended to serve America well in the past.

Another Reason Not To Trust Stimulus Statistics (Cont.)

The AP does a critical analysis of Vice President Biden’s comments about the weatherization program funded with “stimulus” funds and concludes that the Veep failed to mention some pretty material points.  No surprise there.

The Obama Administration really should stop talking about the “stimulus” debacle before its loses all credibility.

Another Reason Not To Trust “Stimulus” Statistics

You’d think that the Obama Administration and Congress would have realized by now that it is pointless and counterproductive to try to convince Americans that the “stimulus” bill was a huge success, but they keep trying anyway.

Earlier this week, for example, President Obama visited Columbus and cited the work of one local architecture firm on a new crime lab as another example of the positive economic impact of the “stimulus” legislation.

The Columbus Dispatch now reports that the President was wrong, and that in fact no “stimulus” money is involved in the project.  It’s just another reason to be skeptical of the silly, unvalidated “jobs created or saved” statistics that get thrown around in attempting to justify what clearly was a wasteful pork barrel bill that did not provide the economic boost that was promised.

Our Apple-Polishing Congress And President

On Friday the Washington Post carried a good editorial about the latest “stimulus” bill to wend its way through Congress.  This one allocates $10 billion to avoid teacher layoffs.  The “stimulus” argument, of course, is that the teachers who would otherwise be laid off will now have money to spend, and their spending will stimulate the economy.  That bogus argument has already been disproved by the utter failure of the earlier, larger stimulus to deliver the job creation that was promised.  What’s more, that argument could be used to justify subsidizing every industry facing layoffs and using federal dollars to prop up every job.  Has our country’s economic policy really reached that point?

The Post clearly is correct in characterizing this latest stimulus bill as a sop to teachers unions.  The President and congressional Democrats want to leave a big polished apple on the teacher’s desk — and they hope to get campaign cash and votes in return.

The eye-popping statistic in the editorial is that, in the last school year, more than five percent of the funding for primary and secondary education jobs came from the federal government.  The threshold question that people should be asking is:  why is the federal government involved in funding local education in the first place?  Education historically has been, and should remain, a local issue decided by the voters in municipalities and states.  We should not be using federal dollars to prop up school districts that are overstaffed or underfunded due to the choices of the local voters in those districts.

No one wants to see anyone laid off, but it happens in every industry.  Education should not be immune.  Indeed, given the stories about teachers twiddling their thumbs in “rubber rooms” while drawing full paychecks, it seems likely that school districts have room to make cuts.  If school administrators have to make tough choices because that is what local voters have decided, then they should make those tough decisions — without a toadying Congress throwing money their way.

In Defense Of The Stimulus

Any regular reader of this blog knows that I have been critical of the “stimulus” legislation and the government response to the current recession, which has featured lots of spending.  In the interests of being even-handed about it, attached is an op-ed piece in today’s Philadelphia Inquirer from the chief economist of Moody’s Analytics that defends the stimulus bill and other actions taken by the federal government.

I’ll let readers judge for themselves, but I don’t find the defense especially convincing.  It seems to be short on objective proof, and long on the notion that if nothing had been done things would be worse than they are.  That argument is tantalizing because it is impossible to prove or disprove.

What we do know is this:  when the stimulus legislation was passed, we were told that it would keep unemployment below a certain level, and it didn’t.  We know that much of the money went to keep government workers employed, and in some instances to give them raises.  We know that the “jobs created and saved” statistics cited in defense of the stimulus legislation often were phony and unreliable.  And we know that the stimulus legislation, and the other federal bailouts that have occurred, have added enormous sums to our federal debt — sums that will burden our economy for decades to come.  In the face of such hard realities, the argument that things would have been worse without the stimulus bill seems very thin, indeed.

A (False) Choice Election

The Obama Administration and the Democratic Party have decided that the 2010 election should be about “choice.” That is, the President and his Democratic comrades don’t want to have the election be a referendum on how the country is currently doing under their stewardship.  Therefore, their goal is to make this election about “choice,” and they define the choice as being between the current policies and the “failed policies of the past” when Republicans controlled the White House and the Congress.  President Obama says it is like disciplining a teenage driver who has just driven the family car into a ditch and now says he wants to get behind the wheel again.

For a person who speaks often about rejecting “false choices,” the President and the Democratic Party seem to be presenting voters with precisely that.  No one is arguing that we should go back to the days when Republicans in control of Congress spent like drunken sailors.  If that were really the choice, most Americans would be suicidal, because the choice would be between the failed policies of the past and the failed policies of the present.  I think many Americans, whether the Democrats admit it or not, recognize that the economic policies of the Obama Administration have failed.

As bad as the economy was at the end of the Bush Administration, the record of President Obama and his supporters doesn’t exactly shine by comparison.  The President has presided over a sustained spike in the unemployment rate, a lingering recession that is teetering on the brink of the dreaded “double-dip,” a pork-laden “stimulus” bill that failed of its essential purpose of providing jobs and has saddled our children with unnecessary debt, bailouts of failing businesses and industries to no appreciable positive effect, budget forecasts that project massive, unsustainable deficit spending far into the future, a moribund housing market, and a host of phony programs like “cash for clunkers” that have done nothing except waste tax dollars.

Unless you were one of the lucky people who got a bailout, cash for a “clunker,” or some other form of government booty, the policies of the Obama Administration and its allies in Congress have accomplished nothing that is positive.  In the meantime enormous government interventions in the economy, through social engineering programs like the “health care reform” legislation, promise to bring new intrusions into our daily lives.  When average Americans look at the dismal record of the economic policies  enacted so far — all of which have failed to live up to the earnest promises of their proponents — they understandably must envision the impending impact of the “health care reform” legislation with fear and loathing.

The only good news for the President and the Democrats is that the American people are no more fooled by the Republicans than they are by the Democrats.  Both parties have let us down; neither has any store of credibility when it comes to governing and spending and taxing responsibly.  If the 2010 election goes favorably for the Republicans and they suck at the job of running the country, no one is going to have the slightest hesitation in voting them out of office and turning to some new alternative.

To borrow the President’s car metaphor, the Republicans may have driven the economy into the ditch, but many of us believe that the President and Congress, like Thelma and Louise, are driving us pell-mell toward a cliff.  I’m hoping that the Republicans will act like sober adults behind the wheel, but I’d even hand the keys to a teenager rather than sit idly in the rear seat and watch as apparently suicidal drivers hopelessly attempt to evade the consequences of their bad decisions and irresponsible policies.

Back To Ohio

President Obama visited Columbus yesterday to promote jobs created by the “stimulus” bill — in this case, the 10,000th road project paid for with “stimulus” funds.  He has visited the Buckeye State frequently in recent months. There are two apparent reasons for his visits, I think.  First, Ohio is a “swing” state, and I am sure he wants to try to maintain his popularity and visibility here.  Second, Ohio obviously is one of the states that has been hit hard by the recession, and I expect the President wants to make the case that his economic policies are having a positive impact.

It is a hard sell — although somewhat easier in Columbus than in northern Ohio.  President Obama and Governor Strickland noted that the state’s unemployment rate declined last month, and there are signs of job creation, but the fact is that Ohio’s unemployment rate remains stubbornly over 10 percent, the housing market is depressed, banks don’t seem to be lending, and there are no readily apparent signs of any kind of broad “recovery.”  For every “stimulus” project, there seems to be a corresponding bit of bad economic news in the form of layoffs or a jump in home foreclosures.  The northern part of the state has been especially hard hit.

I am sure the President’s visits are a good move politically, but in reality there is not a lot of good economic news to celebrate — in the Buckeye State or elsewhere in the country.

A Verdict (Of Sorts) On The “Stimulus” Bill

The National Association of Business Economics yesterday published the results of its quarterly survey of its 68 members who work in private sector firms.  The survey asked them to evaluate the impact of the $787 billion stimulus legislation passed at the beginning of last year, and 73% said employment at their companies was no higher (or, for that matter, lower) than it would have been without the stimulus legislation.  Sixty-eight people is a pretty small sample size, but the idea that 73% of any group of economists agrees on something has its own special impact.  It is probably fair to assume, too, that the NABE members who were polled work in large-type companies.  Not many Mom and Pop start-ups have economists on the payroll, and it could well be that the survey therefore cannot account for any job growth that happened at the small business level.

Still, it seems clear that the “stimulus” bill will eventually be viewed as an incredibly expensive bust.  The unemployment rate is much higher than was promised when the bill was enacted, and most of the spending under the bill seems to have been geared toward protecting government jobs, not creating or preserving jobs in the private sector.  The results of the NABE survey undoubtedly would have been different if economists employed by federal, state, and local government entities were asked about the effect of the stimulus bill on employment with those entities.

An Ill Wind Blows No Good

The Investigative Reporting Workshop at American University has tracked “stimulus bill” spending on wind power — nearly $2 billion in all — and the results are not pretty.  It turns out that nearly 80 percent of the money spent has gone to foreign manufacturers of wind turbines, creating thousands of jobs overseas rather than in America.  Americans apparently are getting temporary jobs erecting the machinery at the wind farm locations here in the United States, whereas employees of factories in places like China and Vietnam are getting the bread-and-butter blue collar manufacturing jobs that so many Americans crave.  Even Chuck Schumer, the Democratic Senator from New York, thinks that the stimulus wind power spending has been a jobs creation bust.  And in the meantime, the $2 billion spent on the wind projects was all borrowed money on which American taxpayers will be paying interest to holders of American debt, in places like China, for years to come.  And, it may well be that wind power projects will have to be subsidized by the government well into the foreseeable future, too.

This story is not that much of a surprise, given the dismal track record of the pork-laden, poorly considered stimulus bill.  But it also should be a lesson to wary taxpayers as Congress discusses new “jobs” bills.  (No one on Capital Hill wants to use the word “stimulus” ever again.)  Simply appropriating money for “feel-good” government projects, like the wind power projects in the stimulus bill, doesn’t necessarily create jobs in America.  The only sure way to meet that goal is to identify and fund projects that necessarily will involve work, from beginning to end, that must occur in America.  Infrastructure improvements would be good examples.  An even better approach would be to encourage appropriate development of America’s oil and natural gas resources, which would have the effect of creating jobs in America while easing our dependence on foreign energy sources.

After the “health care reform” disaster, Congress is now talking up a “jobs agenda,” hoping that they will have some accomplishment to point to when the reelection campaigns gear up in a few months and unemployment continues to linger at or above 10 percent.  Let’s hope any such legislation is done in a more thoughtful way that actually meets the desired goal of putting Americans back to work.