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.
I suppose I should be relieved. Claiming success is far less
destructive than another irresponsible "stimulus." I'm grateful for small
favors.
