USA Today Manufactures Stimulus Jobs Claims
The August 30th USA Today carried a story by David Lynch headed: “Economists agree: Stimulus created nearly 3 million jobs.” In paragraph two we learn that: “A recent study by two prominent economists generally agrees, crediting the pump-priming with averting ‘what could have been called Great Depression 2.0.’” It is not immediately obvious which two economist’s Lynch is referring to, but two paragraphs later Lynch reports: “‘We have played our policy hand. Now we’ve got to hope it’s good enough,” said Mark Zandi, chief economist for Moody’s Analytics and co-author of the recent study.”
The study Lynch is referring to, therefore, is Alan Blinder and Zandi’s, recently released a report titled “How US Policy Ended the Great Recession.” But there are two huge problems with using this report to claim that “Economists agree: Stimulus created nearly 3 million jobs.”
First of all, the paper is not based on reality. It is a completely fantasy based projection that does not take any real economic data from the past year into account. It is not a “study” of anything. The paper’s “results” are 100% dependent on how Zandi and Blinder created their economic model. If they wanted their model to show the stimulus saved 3 million jobs, then that is exactly what their model will show.
Second, the paper has not been published in a peer-reviewed journal. Both Zandi and Blinder were vehement supporters of President Obama’s economic stimulus. Their livelihoods and professional credibility are dependent on people like Lynch believing that the stimulus worked. The least they could do is allow other academics to review their models.
The only honest way to measure the success of the stimulus is to compare the promises made by the Obama administration to actual economic data. The Heritage Foundation’s J.D. Foster reports:
The President’s original target for jobs creation set during the campaign in the fall of 2008 was 2.5 million jobs. But as employment fell at the end of 2008, he increased the employment target by 1 million to 3.5 million jobs. At the time, employment stood at about 135.1 million, according to the DOL’s most commonly used measure. This establishes the Obama jobs target for December 2010 at 138.6 million. It also establishes a basic trajectory for employment that the economy would need to approximate to hit that target.
According to the latest jobs report, total U.S. employment stood at 130.2 million in July, which means the cumulative Obama jobs deficit stands at 7.6 million.