Wednesday, April 21, 2010

Update on Stimulus Job Creation Hype

Last year, I detailed the errors in the Administration's tally of jobs "created or saved" by the stimulus package. I also noted when the White House was caught moving the employment goal-posts to make the stimulus seem effective.

Well, they did it again, shows Big Government. Last week, the Obama CEA claimed (page 11) that the stimulus preserved 2.8 million payroll jobs above the baseline, measured in mid-first quarter 2010. According to the BLS, payroll employment in Q1 was about 129.7 million. Thus, CEA presumes a pre-stimulus baseline of 126.9 million jobs. Yet early last year, Obama's CEA designates set the employment baseline (page 4) at 133.9 million jobs by the end of 2010. So, this year's jobs baseline is 7 million below last year's; had the baseline been unaltered, the stimulus package could be said to have cost over 4 million jobs.

I know that the economy's been worse than expected. I don't doubt that dropping baseline expectations is legitimate. The issue is that such fuzzy math makes it impossible to determine whether the fiscal stimulus preserved or cost jobs.

Which is the point: fiscal stimulus, like man-generated global warming, is non-falsifiable. Obama can't be proven wrong, even when he's not right.

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