Judging a Stimulus by the Job Data Reveals Success (NYT)

[jefferson_dem]

Judging a Stimulus by the Job Data Reveals Success
By DAVID LEONHARDT
WASHINGTON

Imagine if, one year ago, Congress had passed a stimulus bill that really worked.

Let’s say this bill had started spending money within a matter of weeks and had rapidly helped the economy. Let’s also imagine it was large enough to have had a huge impact on jobs — employing something like two million people who would otherwise be unemployed right now.

If that had happened, what would the economy look like today?

Well, it would look almost exactly as it does now. Because those nice descriptions of the stimulus that I just gave aren’t hypothetical. They are descriptions of the actual bill.

Just look at the outside evaluations of the stimulus. Perhaps the best-known economic research firms are IHS Global Insight, Macroeconomic Advisers and Moody’s Economy.com. They all estimate that the bill has added 1.6 million to 1.8 million jobs so far and that its ultimate impact will be roughly 2.5 million jobs. The Congressional Budget Office, an independent agency, considers these estimates to be conservative.

<SNIP>

http://www.nytimes.com/2010/02/17/business/economy/17leonhardt.html?sudsredirect=true

[Uzybone]

1. The truth is trickling out...

[Solomon]

2. Unfortunately the "truth" is manufactured these days.

The fact that policies are working is not even going to register. Why? Because the "reality" that is being created everyday is that Obama has failed. The democrats are failures.

We all saw it from the very beginning, how ridiculous claims, laughed at in the beginning for being so stupid, get taken seriously.

Just get enough people to make enough noise about something so that television reports on it. That makes it a "fact."
Then get enough people to say they fervently believe it. That makes it the "truth".

Chris Hedges does a brilliant job detailing this in his book, "Empire of Illusion".

I still remember the very day Rush Limbaugh started the shit about how he wanted Obama to fail. I felt then, that this is something more than just this fat fuck mouthing off. I knew he was setting the stage. Once tv reported on it, and made it seem okay to say these kinds of things about your President, it became the "truth."

No matter how much Obama and the democrats succeed, the masses will say they are failing. In fact, the MORE they succeed, the more they will be cast as having failed.

Sad sad irony.

[CTLawGuy]

15. I agree

it's a shame that too many on DU are contributing to this manufactured "reality."

[Number23]

10. Too bad so few seem to have even the slightest interest in it...

Rec'd

[rapturedbyrobots]

12. but the only thing that registers is NET jobs numbers

and those are still down.

people don't care about jobs that weren't lost. that's normal. jobs aren't supposed to just disappear. so it isn't really news or attention worthy to most.

but continuing NET job losses. well that scares people. and you can't really hope to sell 'it could've been worse' as a winning message.

[DCBob]

16. People should care. In reality millions of jobs were saved..

Jobs were disappearing, very rapidly and the stimulus slowed and then reversed it.

[Cha]

3. K&R this to get more EXPOSURE!

[high density]

4. But on Sunday, NBC "News" Ass David Gregory told us there was no way to measure stimulus jobs!

God that corporate crap is getting tiring.

[Rosa Luxemburg]

8. David (half a brain) Gregory?

What would he know?

[Hansel]

30. David Gregory is just stupid and is led around by Republican talking points.

Technically he's correct. There is no way to measure stimulus jobs, not exactly. Of course that is no different than when measuring most economic indicators but professionals can make good estimates, which they do everyday. There is no way to exactly measure GDP, job losses, unemployment, etc. but he has no problem using those numbers to make his case against the WH. He's just too stupid to know how ridiculous he looks when he presses on with this type of BS. At least to those of us who can think.

When his so-called "economic expert" sources tell him there is no way to measure stimulus jobs, he or they are just dropping the last word "exactly". It's disingenuous at best and out-and-out stupidity or dishonestly at worst when people like Gregory and/or his sources use this argument to make the White House look like it's pulling numbers out of its ass.

Some of the pundits, like Morning Joe, have agendas and know better when they do this crap. But Gregory, I'm convinced, is just simply a moron.

[Clio the Leo]

5. Thank you Mr. LEONHARDT! NT

[Kdillard]

6. k and r. Hopefully more articles like this will be written so that

It starts to sink in.

[Kyril Enko]

7. Shhhh!

You wouldn't want Hannity to have a stroke, would you? :evilgrin:

[Rosa Luxemburg]

9. cough!

[TexasObserver]

11. Yes, the Stim package is working.

We need another one passed NOW, to make sure the positive developments do not abate this summer or fall. We need a Stim II package of no less than $700 billion. And we need a new JOBS program over and above that, one designed to provide jobs immediately.

[dkf]

13. I'd like to know how many private sector jobs were created.

Government can create public sector jobs in a second but those jobs don't create real economic activity more than giving unemployment benefits.

[quaker bill]

14. Utter claptrap

Even a government job pushing paper, few of which have been created, consume paper, pc's and printers, rent office space, and in the case of my office, purchase American manfactured vehicles. Unemployment checks do not do this. This is a republican theme and most notable for its general lack of truth.

A number of stimulus related jobs I know were saved locally, were public works contract managers. Their government jobs were saved because local governments had funds from the stimulus to construct projects that they otherwise did not have funds for. Small local governments were laying off these folks, in some cases by the 100's. These contract managers put projects out to bid, awarded contracts to private sector businesses, which then built the projects, purchasing construction materials from other businesses, subcontracting portions of the work to other businesses, all of whom retained existing staff or hired new staff to deal with the workload.

This is something not accomplished by unemployment checks. Further, the people who are working get 100 percent of a paycheck, folks on unemployment get 50 percent at best, so these working folks (both public and private sector) were much more capable of participating in the economy, not losing their homes and cars, and enjoying regular meals.

[Solomon]

17. Thank you. I'm sick of the right wing trying to deflate any job

growth by saying they are government jobs and therefore don't count.

It's ridiculous and absurd. What difference does it make what kind of job it is if the employed person now has money to spend on consumer goods and services, thereby boosting the economy?

[dkf]

25. Unemployment checks boost the economy too.

Look what if the government hired every unemployed person we have? Then we would be at full employment. Why isn't that your solution then?

[Beetwasher]

29. Put 'em To Work Digging Ditches And Filling Them Back Up

They take their paychecks and buy shit. That shit needs to be replaced. There's a demand for more goods. Private sector starts to procduce more goods for all those new government workers and soon they need to start hiring more people. Get it? Eco. 101.

[dkf]

33. Then every unemployed person should be put on the government payroll. Apparently that will produce

Consumption to make everything work then right? So tell me why unemployment exists?

[Beetwasher]

34. Yes, They Should

Because the gov't DOESN'T do that, that's why UE exists. And there are many reasons WHY the don't, not the least of which is political. The gov't does lot's of things it shouldn't do, and doesn't do lot's of things it should. Why? You tell me.

If you understand economics differently, praytell.

[dkf]

35. Unemployment was created to soften the effect of the business cycle

So that there would be a minimum amount of consumption even during times of economic stress. But governments can't support it in perpetuity and that is why they don't do it. You need a certain amount of the population doing work that produces goods and services. I mean if giving people unemployment or a government job created an economy then you could do it in every third world country and bingo instant nation building.

But if you want a country to be able to produce goods that other people buy that is a harder proposition. You think the chinese are excelling bacause they have given everyone unemployment or a government job? Nope. They create goods other countries want.

[Beetwasher]

36. Strawman

Who said they should support it in perpetuity? Not me. But they could hire every person willing to work until private sector jobs open up to absorb them.

They COULD do that and it WOULD drive consumption which WOULD lead to more private sector jobs. And wouldn't have to be in perpetuity.

[dkf]

37. Government crowds out the private sector.

Governments can borrow more easily than the public sector. When their needs are great there is a competition for funding and that pushes up corporate rates. The government's rate is the risk free rate while there is always a higher risk for the private sector so they pay more. Anything the government needs to purchase drives up demand and therefore costs also.

I'm pretty sure we covered this in econ 101 too.

http://en.m.wikipedia.org/wiki/Crowding_out_(economics)?wasRedirected=true

here is the wikipedia commentary on it

[Beetwasher]

39. Irrelevant, Strawman Bullshit

Cut the crap, I won't be sidetracked by your nonsense.

Private sector jobs are not the only jobs that count. No one is saying the gov't should be in the business of perpetually employing anyone who needs a job. Cut the strawman crap.

In your OP you implied that it's ONLY private sector jobs that matter and create economic activity. That's fucking bullshit. Public sector jobs stimulate the economy and ultimately lead to more private sector jobs. Period.

If you spread your rightwing bullshit you will get called on it.

[dkf]

41. No. I said it is easy for the government to create a public sector job (just hire someone. Done)

But I am interested in seeing how many private sector jobs have been created because that is the real engine of economic activity. Governments purpose is not to create goods and services.

Government gets revenue from taxes. Private sector gets revenue from producing goods.

[Beetwasher]

44. Bullshit, That's Not What You Said, Here's Exactly What You Said:

"Government can create public sector jobs in a second but those jobs don't create real economic activity more than giving unemployment benefits."

That is what you said and it's total fucking bullshit and a rightwing talking point to boot.

Don't pretend you didn't say what you said. I'm not a fucking idiot who can't read or doesn't remember your OP.

Those jobs sure as fuck DO create "real economic activity" (i.e. CONSUMPTION) and, in fact, lead to more private sector jobs as a result of that consumption.

[dkf]

45. Well it's what I meant. Real economic activity produces revenues.

Government doesn't produce revenues it taxes it instead.

[Beetwasher]

46. Bullshit, Not It's Not, Now You're Backpedaling

You use some bullshit, meaningless term like "real economic activity" and then say it means whatever the fuck you want it mean at any given time.

Consumption is "real economic activity".

[dkf]

24. That is one specific job.

And taking up space while consuming paper products can be done by anyone anywhere even if they accomplish nothing. Not that I'm saying government accomplishes nothing but that it is on the side to facilitate the sectors that produce goods and services.

[Beetwasher]

21. That's The Stupidest Fucking Thing I Ever Heard

Any job that pays a salary creates economic activity. Last I checked, "public sector" jobs pay salaries. Those salaries go to buy shit. That's economic activity.

[dkf]

22. That is the rationale for unemployment also which allows people to pay bills.

And keep the economy going.

[Beetwasher]

23. And It Works

It does exactly that. Are you claiming UE doesn't work?

As I said, stupidest fucking thing I ever heard.

[dkf]

26. No. I'm saying that keeping government jobs and providing unemployment

is similar in that it keeps the consumption side going but does not produce the true self generating economic activity that comes from creating goods to sell.

[Beetwasher]

28. Consumption Drives Goods Production

Seriously, you don't know what the fuck you're talking about.

[Zynx]

43. DING!

[Zynx]

42. The multiplier effects of the government spending have shored up aggregate demand which

has kept the layoff total down from what it would have been. That's how fiscal stimulus works. There have been billions in contracts with private entities and there were something like $50 billion in tax breaks for businesses in the stimulus bill if you are looking for more direct channels.

[AllentownJake]

18. The question is not 2010

If you put 700 billion into creating government jobs for two years, you will create jobs. The question is

1) Does the state have the revenues to keep those jobs when the initial money runs out?
2) Where do those people go after the stimulus money has been spent?


They have a few months to answer said questions.

Here is the reality, most of the stimulus job creation has occurred by hiring state workers. The states all have budget problems. When the federal money runs out, these are the first jobs that go in their own austerity projects to prevent them from defaulting on their debt, unless there is a boost in revenue to the states from somewhere.

[jonestonesusa]

19. Extending existing employment helps communities in the present, though

and buys additional time as we await a change in the economic cycle. The stimulus employment creates hard infrastructure in transportation and building improvements and allows individuals and families to avoid immediate reliance on social services for day to day needs.

Your questions are relevant and the next growth area for the American private economy needs to be identified and supported with good policy. In my opinion, the stimulus is a stopgap but also a way to jump start the development of infrastructure and human capital necessary for future growth.

[AllentownJake]

20. That was the point of my post

You don't really celebrate patches in the damn that much, a patch is going to blow out eventually.

If the flood waters are building and you get the levy up 2 feet but you need 3 feet, you are shit out of luck when that extra foot of water and an inch comes.

The states for the most part are bankrupt, there better be a plan for when the stimulus funds run out or there will be a new wave of public sector unemployment in 2011 which will lead to further private sector job losses.

[jonestonesusa]

32. Agreed, to a point.

I don't think the OP mentions celebration - Pres. Obama and about everyone else would say that more needs to be done. No doubt or disagreement there.

But unless there is an honest political accounting for the success of the first stimulus in its limited but important aims, then there will be no public or political support for additional action.

There is no strategy in the president's reach that immediately creates 8 million jobs. Thus, a smart but piecemeal approach is the only way to go, in the absence of better strategies.

[Dappleganger]

27. K&R for good news. nt

[FrenchieCat]

31. Kick!

Re'ced earlier.

[Yurovsky]

38. It just needed to be a helluva lot bigger...

and we'd be seeing a lot more in terms of hiring and economic expansion

[Milo_Bloom]

40. As long as each of those jobs pays $1 million salary, we are set!

Because that is roughly how much they would each need to pay to generate enough revenue to keep the jobs going.

Unfortunately, a lot of these jobs are highly temporary (some employers even had people sign documents saying they understand they lose their job when the stimulus runs out).

It's kinda like jump starting a car with a battery that is too weak. Yeah, you are going to get some whirring of the engine, but not enough to turn over.

I just hope the whirring is enough to get people to vote dems in 2010 and then maybe they will grow a spine and get some things done that will have long term effects!