Posted by Adam @ 9:19 pm on November 18th 2009

Stimulus jobs humbug

It’s not just that the administration didn’t even fact-check reports of stimulus jobs “created or saved” to see if they were from Congressional districts that actually existed before they announced totals, nor that they still can’t certify the numbers. The question of how rigorous this whole process is anyhow is pretty dubious, it seems to me; I give you money because I want jobs created or saved, then I ask you how many jobs it created or saved, then I tell the world how awesome I am for helping create or save these many jobs. This doesn’t seem like a recipe for probity.

Am I the only person that thinks this is a bit shonky? Where’s the benefit to people telling the truth, or checking that the values returned by the employers are the truth? Is this really a good way of judging the value of the stimulus?


  1. That’s the problem: the answer to your last question is no.

    You can quantify, I guess, the amount of specific federal contracts that were funded (the highway jobs and the like), and states might have an easier time quantifying (though, depending on their governors, not much incentive). But there’s just not going to be any direct thread of causation that you can tease out saying a car salesman in Idaho or an insurance rep in Indiana would or would not still be employed were it not for the stimulus. For that matter, it really makes no difference, in your ability to prove it, whether the stimulus helped or by how much. Because it would require, essentially, running the future twice, one with stimulus and one without, and comparing. You’d have to know, in advance, how bad things were going to be if things had been left to run their course.

    And even if you could say, exactly and with certitude, “the stimulus created 500,000 jobs and saved 800,000”, that’s still not getting at it, because presumably all those people with those jobs are still able to spend money, thus supporting further jobs, are not getting on the government dole, thus saving on government revenues, creating confidence (and then, to what degree), or a lack of panic (and then, to what degree), that goes along with those people not losing their jobs or getting new ones, and what impact that will ultimately have. Or, the flipside, how many jobs saved at the cost of how many future jobs from deficit spending or from not allowing the pain through (through cushioning the blow of the bubble-bust-cycle and thus, to some extent (and what extent?) perpetuating that cycle…and on and on and on.

    It’s an ultimately impenetrable question. Maybe somebody much, much smarter than I am could have figured out some clever bellweathers in advance and learned something from them, but at this point it’s all counterfactuals and counter-counterfacuals.

    Comment by Brad — 11/18/2009 @ 11:43 pm

  2. Maybe somebody much, much smarter than I am could have figured out some clever bellweathers in advance and learned something from them, but at this point itís all counterfactuals and counter-counterfacuals.

    Not to worry. Two people were SO MUCH smarter than you that they were not only able to calculate that the stimulus saved 3.5 million jobs, they were able to do so before it was even passed.

    And hey, we can’t prove it DIDN’T save 3.5 million jobs, right?

    Comment by Rojas — 11/19/2009 @ 1:14 am

  3. Let us not forget the wonky Speaker of the House when she made her dire prediction of what would happen if the stimulus wasn’t rammed through.

    How many, Nancy?

    Comment by James — 11/19/2009 @ 12:59 pm

  4. It’s because some of us will lose our jobs multiple times!

    Comment by Adam — 11/19/2009 @ 1:34 pm

  5. Ah.

    Comment by James — 11/19/2009 @ 2:49 pm

  6. Not to worry. Two people were SO MUCH smarter than you that they were not only able to calculate that the stimulus saved 3.5 million jobs, they were able to do so before it was even passed.

    And hey, we canít prove it DIDNíT save 3.5 million jobs, right?

    No, but likewise you can’t prove that the downturn “wouldn’t have been so bad” without the stimulus. They’re both dependent on knowing what would have happened without it, which nobody does. For all we know, we might have spiraled into a Great Depression and taken the global economy with it throwing America into a Mad Max style post-apocolyptic future. Who the hell knows? It’s stupid for either side to pretend they have the fore-hindsight. The bottom line is that with a system as complex as the global economy, you’re basically reading Tarot cards.

    Comment by Brad — 11/19/2009 @ 2:56 pm

  7. Indeed.

    But if that is your logic, then I would point out the one certainty in the situation: we blew $800 billion of our children’s money on this particular tarot reading.

    For such an investment, one expects tangible results. Which is why the proponents of the stimulus attempted to provide the illusion thereof, and continue to do so, through imaginary job savings in nonexistent congressional districts.

    Next time, let’s keep the money.

    Comment by Rojas — 11/19/2009 @ 4:13 pm

  8. But that’s sort of what I’m saying. You couldn’t really prove tangible results even if the stimulus worked and saved us from a global econopocolypse. You’re saying (or implying) that not being able to prove or quantify the results must mean, ipso facto, that said results don’t exist. I don’t think that’s true at all. I can’t imagine any scenario where the stimulus worked or failed where you’d have a specific set of numbers to point to that could lead you to say conclusively “see?” Because we just have no way of knowing what those economic indicators would have looked like without the stimulus.

    Put it this way: say economic growth (or jobs, or whatever) had remained totally stagnant since the stimulus (rather than increasing). Opponents could have said “See? No economic growth. It didn’t do anything!” Whereas it’s possible (and possibly even likely) that what you’re in fact seeing is the lack of a X% drop in economic growth that would have occurred without it. So even if you COULD somehow conclusively isolate a specific result (say, amount of jobs created by the stimulus), that in itself would be sort of meaningless, because you can’t get the whole pictures—i.e. who can say how many jobs would have been lost without it, how many were retained because of it, how many secondary and tertiary jobs were created or maintained, etc. etc. etc. etc.

    That’s the trouble with macro-economic decisions on this level (and by the way, that applies also and in fact equally well to a lack of a specific action, which is also, of course, a macro-economic decision). I’m not putting in for the stimulus here, I’m saying it’s an untestable hypothesis both ways (i.e. saying the stimulus worked, or that it was useless).

    About all you can do in situations such as Obama faced is make a series of (hopefully) educated guesses along with a series of judgments about where certain thresholds might lie (say, the threshold for a serious Great Depression level economic collapes) and what values we’d like to shoot for (i.e. let us fall, try to keep us level, try to keep us growing, and all the shades in between). But it’s stupid to point to an inability to quantify results as somebody’s fault or an inherent weakness of the decision itself, rather than just being a reality of the situation.

    As a thought exercise, put yourself in that situation for a moment (without being snarky). What results would you be looking for that you feel could prove that the stimulus worked?

    Comment by Brad — 11/19/2009 @ 4:39 pm

  9. Don’t tell me, tell your President.

    It was the Obama administration that chose, over and over, to sell the stimulus as a plan with a readily quantifiable impact. They did this for a very specific reason: people would not have accepted the expenditure otherwise. And, having sold it that way, they are now apparently obliged to keep selling it that way, through math that has progressed beyond fuzziness into the realm of the outright hirsute.

    If you are objecting to this kind of quantitative analysis of economic decisions, that’s fine; just be prepared to accept the political consequences. “Kinda seems to us that spending $800 billion would be better than not, though there’s no way of knowing for sure and we won’t know even in retrospect whether it worked” is an honest argument, and one on which I’ll willingly defend the negative.

    Comment by Rojas — 11/19/2009 @ 4:50 pm

  10. I do accept the political consequences of it. I think the Obama administration does too. That’s fine, go ahead and bitch about the inability to prove or disprove quantifiable indicators of the plan’s success or failure. You just won’t get very far, I don’t think. This plan was not, I don’t think, overly “sold” on the strength of its quantifiable numbers. There was no real debate that I can recall about whether X amount of jobs projected to be created was worth Y amount of money put into it, because that’s ephemeral ground on which to base the discussion (ephemeral just because any numbers you come up with will be). The real debate is right where it should be—on a basic, time intensive value judgment. That being, do we accept the potential consequences of NOT having a stimulus package in the face of an economic mudslide the potential consequences of which even on the upside are very bad and on the downside we might not even be able to predict. Or do we do something and hope it works? That was the watercooler discussion of the entire thing, and I think Obama and Bush Bush, went ahead and made their decision knowing full well that they could never be “vindicated”, but they could certainly be hung if they failed to act. And go ahead, play THAT political game. See how much any political entity, when faced with a decision of doing nothing with a strong potential for obvious failure, or doing something with a capacity for success that can never precisely be proven.

    “Sorry folks. You’re just going to have to tough it out on this one. We may only lose 5 million, may be 50 million, who can say? But my economists can’t make verifiable predictions or falsifiable quantitative analyses to our satisfaction of any of our potential contingency plans, so…well, yeah, fuck it. Good luck. Peace out.”

    Again, I’m not even in this thread to defend the stimulus. I’m saying the lack of quantifiable numbers you can point to conclusively to prove its success or failure isn’t, in itself, a fault, nor is it, again in itself, an indication that we shouldn’t have done it. Their inability to prove it worked is also your inability to prove it didn’t. Sucks, don’t it?

    Comment by Brad — 11/19/2009 @ 6:13 pm

  11. Oh, and by the way, fiscal conservatives would have been in the same position had Obama chosen NOT to go the stimulus route, and the economy had gotten much, much worse.

    People would have been screaming for blood, and suddenly you’d be in the position of saying “Well no, the economy would have tanked even WITH a stimulus package! We swear!”

    Comment by Brad — 11/19/2009 @ 6:22 pm

  12. Is that not the nature of political opposition? It’s about the only political advantage there is to being out of power. Everyone does it. It was arguably worse with Bush, because he was so bad that at the end anyone could blame everything on his administration and win political points whether or not the accusation contained any merit at all.

    Comment by Adam — 11/20/2009 @ 9:32 am

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