JONATHAN CHAIT FEBRUARY 24, 2010
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In response to the Congressional Budget Office's calculation that the stimulus increased employment by somewhere between 1 and 2.1 million, Veronique de Rugy has made a chart to show that the stimulus has failed:
"On this chart, I can't see that the private sector has gained any jobs," she comments. "In fact, it's lost 8.7 million in two years." I assume she's just being dishonest here, because anybody with an intelligence level even approaching that of an apple pie would recognize that the claims that the stimulus increased employment are set against a presumed baseline of significant job loss. Her chart is sort of like saying that the people who told me last autumn that I should buy a winter coat are all wrong, because here I am wearing the coat and I'm still colder than I was in October without it.
Indeed, de Rugy's blue line of private sector job level shows that the rate of decline slowed, and then eventually stopped, beginning with the passage of the stimulus. You could say that all the macroeconomic forecasters are wrong and this is just a coincidence. But you can't say that this chart proves, or even suggests, the stimulus didn't work.
Moreover, de Rugy's chart shows that the level of government employment (the red line) has also fallen since the stimulus was enacted. That's another reason why the stimulus was needed. State and local governments must balance their budgets, and an economic catastrophe both dries up tax receipts and swells the need for more spending. This forces governments to enact major tax hikes and spending cuts, which in turn deepens the economic crisis. One of the most important elements in the stimulus was aid to state and local governments to reduce this pro-cyclical effect. Liberals complained that the stimulus, at the behest of moderates, failed to include sufficient aid. And we were right -- de Rugy's chart shows that total government employment has fallen since Obama took office, where it should be rising to help take up labor slack and accommodate rising needs.
The government employment numbers also put into perspective some of the right's fear of the massive Leviathan state Obama has constructed. There are still fewer people on the government payroll now than there were when George W. Bush left office. Of course, there are more than there would have been without a stimulus. But if conservatives want to blame Obama's policies for lower employment, then they also have to "credit" them with reducing people on the government teat. Not that I'd expect intellectual consistency from people obviously engaged in propaganda.
8 comments
Speaking of dishonesty, let's look at the different y-scale for blue (private) and red (government). Blue drops by 8,000,000 and red increases by 50,000. Yet, due to the much smaller scale for red, these differences look similar in magnitude. The casual reader will look at these two plots and think: Wow! We've gained about as many government jobs as we've lost private jobs! when this is *clearly* not the case.
- desperjm
February 24, 2010 at 3:37pm
If you want chart dishonesty, you should pop over to the Vine and see the stuff that global warming 'skeptics' run up the flag pole- high order polynomial trending of short time series, truncated axes, stretched hands, obscure units, unsourced data, and all manner of other flimflammery. This is just politically expedient ignorance of the type which more or less describes the current state of American conservatism. On that point, you know you're in a bit of a pickle when every evidence based dissertation on any given area of policy explodes your world-view. As I see it, it's only a matter of time before Republicans' ignorance bubble bursts and discredits that party for a generation, at least at the national level. Their insane platform and reactionary tea bagging base puts the smart money on that moment coming about the next time they grab power, at which point David Broder's head will explode along with the rest of the nincompoops in the mainstream media which have enabled this slow march off the cliff. In the meantime I'll continue to marvel at the folks on the left who, not to be left out, are doing their part to flush this country down the toilet. Jane Hamisher has a post today about how hard the bill will be to pass the House: hence why a public option is critical, etc. And they continue to rage against the excise/cadillac tax, not minding the fact that nearly expert agrees it's an important part of the fix. Indeed, who needs pin headed experts when you've got your gut instinct, which apart from being able to divine political winds others don't, also does crack economic analyses. America, America, how woe is thee.
- I Majorajam
February 24, 2010 at 4:00pm
Prior comment should read 'streched axes' not hands. Horrible.
- I Majorajam
February 24, 2010 at 4:02pm
Chait wrong again, though I am beginning to understand the lens through which liberals evaluate economics (i.e. did it make the public sector bigger and jucier or not) 1. The goal of the stimulus was to stimulate the private sector (not the public sector) as the private sector pays for the public sector teat where liberals gravitate. 2. No question that the stimulus failed to stimulate the private sector, just look at the numbers. And when you fully evaluate the true cost of the stimulus -- Gov. took money from private sector to fund this in form of future taxes --- no question this is a loser. To assert after the failure that it avoided additional private sector job losses is just pure spin. Also, you can check -- Public sector share of GDP going up and Private sector share of GDP goind down. 4. Finally Chait entirely misses the real issue with Public Sector jobs, which have declined slightly in quantity since Big O took office ---- THE AVERAGE PUBLIC SECTOR COMPENSATION HAS GONE THROUGH THE ROOF -- According to an analysis by USAToday , "The number of federal workers earning six-figure salaries has exploded during the recession, according to an analysis of federal salary data." For example, the number of federal employees making $100,000 or more has increased by 120,595, from 262,163 employees in December 2007 to 382,758 in June 2009, for a 46% increase. The number of federal workers making $150,000 or more has more than doubled since the recession started, from about 30,000 to more than 66,000 And this doesn't include the Gov. contractors (the parasites' parasite) *** While I do appreciate the rational self-interest of liberals to increase the size and juiciness of the public sector teat -- don't pretend your self-interest in the interests of the country
- mr_rationale
February 24, 2010 at 4:57pm
Yes, every liberal gets a fraction of total government expenditure at the end of the year. Just write "liberal" on a self-addressed stamped envelope and mail it to the IRS and they'll give you your cut. I don't think you could have possibly read or heard a thing about the stimulus if you don't know that part of how it was supposed to stimulate the private sector was by increasing the size of the public sector (by hiring the otherwise unemployed). The highways et al weren't going to be built by magical pixies and gnomes. You have to be plain stupid to flatly assert, with no rationale, that the stimulus failed. It takes ignorance, although not necessarily stupidity, to believe it; but a non-stupid person would at least think to maybe look at the data before coming to a decision.
- Simon Greenwood
February 24, 2010 at 7:01pm
Simon, You reinforce my point that the stimulus failed And I quote "it was supposed to stimulate the private sector was by increasing the size of the public sector " Yet cold hard facts prove that the private sector has not been 'stimulated' - Private sector share of GDP down - Private sector jobs down Should I type slower or do you understand that you are wrong. Let me try again: 1. you agreed that the stimulus was supposed to stimulate the private sector 2. however, The private sector has NOT been stimulated 3. Ergo, the stimulus failed Any questions?
- mr_rationale
February 24, 2010 at 7:17pm
You don't get to talk down to someone while acting stupider than a small child and most dogs. The stimulus was intended to mitigate the expected depression. Whether it has done so depends on comparing the 2010 economy in our world vs. 2010 in the Neo-Hoover world. Comparing 2010 to 2009 misses the point completely. Hopefully you're just dishonestly playing dumb and aren't actually too stupid to understand this.
- Simon Greenwood
February 24, 2010 at 7:47pm
Simple Simon, I will try make it simpler so you can finally understand: 1. The main goal of the stimulus was to keep unemployment under 8%. The unemployment rate was 7.7% in Jan 2009 when Obaman took office. Look it up, facts are facts -- you can find both WH and Obama quoting the aforementioned goal and unemployment rates can be found at BLS. 2. In fact the unemployment rate went well above 8%, to 10.1% and is currently at 9.7% So, if success = unemployment < 8% and in reality unemployment > 10%, then failure And I always enjoy the unique combination of stupidity and arrogance that is on display here at TNR.
- mr_rationale
February 25, 2010 at 9:32am