Crunching the stimulus job numbers
The White House said today its $787 billion stimulus program has created or saved about 650,000 jobs so far. How did it get to those numbers? Nancy Marshall Genzer checks the administration's math.
Job seeker Evelyn Villegas is interviewed at a Chicago job fair. (Scott Olson/Getty Images)
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KAI RYSSDAL: As of the last time the Labor Department clued us in, the U.S. economy has lost about 8.5 million jobs since the recession officially started almost two years ago. Add in what you'd need to get us back to where we'd be if the recession had never happened and it's 11 million jobs. Bear that in mind as the context for the announcement out of the White House today. The administration says its $787 billion stimulus program has created or saved about 650,000 jobs so far.
We asked Marketplace's Nancy Marshall Genzer to check the administration's math.
Nancy Marshall Genzer: Less than half the stimulus money has been spent so far. Today, Vice President Joe Biden said that spending has created jobs in construction and kept teachers from being laid off.
Joe Biden: There's strong and mounting evidence that the recovery act is putting people back to work.
The White House says it figured out how many people are back to work by asking businesses that received stimulus money how many jobs they created. State and local governments used stimulus money to avoid laying off government workers and teachers. Those were the jobs that were saved.
Allan Meltzer: No one knows how to measure jobs saved. Do you know if your job has been saved? No one else does.
Allan Meltzer is a professor of political economy at Carnegie Mellon University. He says don't believe the White House numbers.
Meltzer: Throw them in wastebasket. They mislead you.
Mark Vitner doesn't think the White House is misleading us. Vitner is the senior economist at Wells Fargo. He says there's no way to know exactly how many jobs were created or saved by the stimulus. It's just too hard to measure. Take construction jobs: You'd think that would be a concrete number. But Vitner says some workers are counted more than once.
Mark Vitner: If someone is working in the road paving business, and they happened to get three different projects, that would probably show up as three different jobs.
Economist Gus Faucher of Moody's Economy.com says forget about the numbers. Look at the big picture.
Gus Faucher: If we didn't have the stimulus I think the economy would likely would have contracted in the third quarter. Which means the labor market would be even worse.
How much worse? It's hard to say.
In Washington, I'm Nancy Marshall Genzer for Marketplace.
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11/02/2009
In the United States the Business Cycle Dating Committee of the National Bureau of Economic Research (NBER) is generally seen as the authority for dating US recessions. The NBER defines an economic recession as: "a significant decline in [the] economic activity spread across the country, lasting more than a few months, normally visible in real GDP growth, real personal income, employment (non-farm payrolls), industrial production, and wholesale-retail sales."
That's the official definition.
In the business market, a recession is now often defined simply as a period when GDP falls (negative real economic growth) for at least two quarters.
source: http://en.wikipedia.org/wiki/Recession#Identifying
Has nothing to do with magic 8-ball or the white house or farmer john's wet finger.
And certainly does not include auto repossessions
From Atlanta, GA, 11/02/2009
I read the teaser on the podcast page and thought, "This will be great. I'll finally get to understand the WH math to see if it has any merit." I got fluff. Come on marketplace, provide some details and data so we can judge the truth.
10/31/2009
Marketplace only pretends to be a radio program. In reality it is an mystical-market-forces prayer meeting where demonstrating faith in the marketplace replaces a prayer meeting's normal focus on faith in God. Mr. Ryssdal and Co. seem to like to sneer at the efforts of government even in the face of a economic calamity caused--and now sustained--by a refusal of one party to govern (or to allow anyone else to govern) and an unwarranted believe in the mythical powers of the marketplace to govern itself. The last 18 months should have given a program that frequently spins the market as somehow better than government in the effort to improve all our lives just a bit more humility.
10/31/2009
And we’re just supposed to trust these Government “reports”?
How can they say we’re out of a recession when home foreclosures are surging still (see http://www.foreclosure.com) and auto repossessions are skyrocketing (see http://www.repofinder.com)?
I’ll trust my magic 8 ball over Government “reports”.
From NY, 10/31/2009
Let's give the current administration the benefit of a doubt and assume that the $787 billion in stimulus money created and/or saved 787,000 jobs here in the U.S. (more jobs than the administration is claiming). $787,000,000,000 ($787 billion) divided by 787,000 jobs equals a cost to the taxpayer of $ 1 million PER JOB. Take the same $787 billion and divide it over the whole adult population of the U.S. (about 220 million) and it would be about $3,500 per adult. Draw your own conclusion as to whether the $787 was well spent or not.
From Sebastopol, CA, 10/30/2009
HOW TO REALLY GENERATE MILLIONS OF NEW JOBS!
The 1977 job tax credit program included a few of the incentives in a so far ignored Human Investment Tax Credit (HITC) program aimed at generating up to 6 million jobs and launching perhaps 4 million entrepreneurs. The 1977 program proved it can work. That stripped down version generated 900,000 jobs - 20% of the jobs created that year!
Download the 2009 version free at: http://www.aesopinstitute.org
Congress should fine-tune and pass the 2009 HITC program without delay!
Another path to millions of jobs is described in the article: 5 Steps to Revive the Auto Industry and the Economy - on the same website.
It outlines revolutionary new technology that opens paths to cars that need no fossil fuel or re-charge. Advanced versions can later turn parked cars into power plants, able to sell power to the local utility.
The technology is not in the textbooks and will be greeted with extreme skepticism and disbelief.
However, independent laboratory validation of one remarkable breakthrough has taken place at Rowan University. It produced far more heat than can readily be explained by existing science, clearly suggesting a new source of energy is involved. The experiments should be repeated at other laboratories.
The Rowan validation began the process of proving that new technology can allow a barrel of water to replace 200 barrels of oil!
It can change what is currently believed about energy and help to revive the economy.
From Denver, CO, 10/30/2009
Lying on a Friday night? Lets see, cash for clunkers created the false GDP but there was a increase of 650,000 Mexican and Chinese jobs this year. Wait, another article claims one million jobs. Can I take the fifth?
From Aspen, CO, 10/30/2009
Probably all the jobs saved means more 'shakes'n fries' cooks to fuel America's food abuse epidemic. Sterling Greenwood/Aspen Free Press
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