Update: Emperor Still "Unacceptably" Naked

(Updating an old post with new data and some new links.)

Just about a year and a half ago, shortly before the inauguration, the incoming Obama economic team issued a (PDF) report, "The Job Impact of the American Recovery and Reinvestment Plan," advocating passage of the "stimulus" legislation before Congress. Central to the argument was Figure 1, showing their prediction of the unemployment rate with and without the plan (click for original size):

[Projections]

There were plenty of reasons to be skeptical then (see Greg Mankiw in the January 10 NYT, David Harsanyi in the January 30 Denver Post, or this handy collection of links from the Cato Institute.)

But "they won", the American Recovery and Reinvestment Plan was passed and signed. Over the past year, some bright person ("Geoff" at Innocent Bystanders) has periodically overlaid actual unemployment data points on the original graph. Geoff's latest article is here, but the graph speaks for itself (click for big version):

[vs. Actual]

Geoff also posts a graph of the absolute employment numbers, and it's even more disheartening.

Since we last looked, Geoff has added in a rough picture ("New Projection") of the Administration's most recent prognostication, based on a statement to Congress from Treasury Secretary Timothy Geithner, White House budget director Peter Orszag and Christina Romer, chairman of the Council of Economic Advisers back in March.

Quote from the statement:

Most obviously, the current unemployment rate of 9.7 percent is unacceptable by any metric, and employment is 8.4 million below its level before the recession.
That's an interesting use of "unacceptable". Since they apparently are accepting it. To quote Mr. Inigo Montoya: "You keep using that word. I don't think it means what you think it means."

Another telling choice of words appears in the Washington Post article discussing the latest employment numbers:

Overall, employers shed 125,000 jobs in June; however, that figure was distorted by the Census Bureau cutting 225,000 temporary jobs.
Emphasis added. You tell me: was the distortion really in the removal of the temporary jobs? Or was the distortion their addition to previous months' figures?

But never fear, saith Nancy Pelosi:

Rough transcript:

Now let me say that unemployment insurance, [handwaving] we talk about it as a safety net, and the rest. [the finger of didacticism gets raised] This is one of the biggest stimuluses [sic] to our economy. Economists will tell you: this money is spent quickly, it injects demand into the economy, and is job-creating. It creates jobs faster than most any other initiative you can name. Because again it is money that is needed for families to survive and it is spent. So it has a double benefit. It helps those who have lost their jobs, but it is also a job creator.
Or: if only we sent out more unemployment checks, we wouldn't have so many unemployed people. It's so simple!

If you need further takedown, Captain Ed is good, and so's Stacy.

The people running the economy operate on an unshakeable faith in the tenets of their secular religion: (a) spending huge amounts of taxpayer money will solve any problem; (b) if it doesn't, it only means we didn't spend enough.


Last Modified 2012-10-03 8:47 AM EST