Guido Fawkes wrote yesterday that the US stimulus had failed. In fact, it's created thousands of private-sector jobs and prevented a depression.
Guido Fawkes has long been known for his libertarian economic positions to the right even of George Osborne. Using oxymoronic phrases like “expansionary fiscal contraction” on the Daily Politics, organising the ‘Rally Against Debt‘ with Ukip against the level of government debt attended by barely 200 people, and now taking economic lessons from no greater an authority than George Bush’s sidekick, Karl Rove.
Yesterday, Guido reproduced a graph from Karl Rove’s shady Crossroads GPS organisation seeking to show that the $787 billion US stimulus package had “failed“. The inconvenient truth for Guido is that the stimulus has worked.
The Pulitzer Prize winning New York Times economics columnist, David Leonhardt, looked in detail last year at the criticisms of the American Recovery and Reinvestment Act:
Perhaps the best-known economic research firms are IHS Global Insight, Macroeconomic Advisers and Moody’s Economy.com. They all estimate that the bill has added 1.6 million to 1.8 million jobs so far and that its ultimate impact will be roughly 2.5 million jobs. The Congressional Budget Office, an independent agency, considers these estimates to be conservative…
Mr Leonhardt goes on to examine the positive impact of the stimulus on keeping “teachers, police officers, health care workers and firefighters employed” as well as leading to a surge in corporate spending. “Pick just about any area of the economy and you come across the stimulus bill’s footprints,” he writes.
Meanwhile, the independent WealthVest Marketing website, carried a story earlier this year detailing that, “Barack Obama created more jobs in one year than George Bush created in eight years“. Since that piece was published in January, a further 908,000 private-sector jobs have been created although after three buoyant months the last set of data earlier this month was more disappointing. Responding to this, economists including Pimco’s founder Bill Gross, are calling for anything but austerity.
The only thing that Rove’s graph does show is that the stimulus has not quite lived up to the initial estimate – published in January 2009 by Obama advisors, Christine Romer and Jared Bernstein – of how many jobs it would “create or save”. This was criticised at the time, by David Leonhardt among others, for being overly ambitious and was arguably a hostage to fortune giving propagandists like Rove and Fawkes ammunition to play with. But it does not detract from the overall impact of the US stimulus.
22 Responses to “US stimulus has been a success”
Guido Fawkes
Unemployment at 9.1% is a success for Obama’s porkulus?
So in the we have a fiscal contraction which you think is “too far, too fast” yet UK unemployment is falling at its fastest pace in a decade, with the unemployment rate at 7.7%. That must mean that Osborne is having more success than Obama. We are indeed enjoying an “expansionary fiscal contraction”.
Being to the right of Osborne is not hard, he supported Labour’s spending policies until 2008. As for Karl Rove, what is not to like? He kicks Democratic arse election after election. Your complaint is essentially what? A succession of bogeymen Karl Rove, Osborne, UKIP, Guido. Not much of an argument.
Facts are facts the porkulus failed to achieve what its backers claimed, that it would create jobs.
Guido Fawkes
Insert “UK” after “So in”..
Will Straw
Guido,
You can’t compare the current levels of unemployment in the UK & US when assessing the impact of the stimulus:
(1) Britain suffered lower unemployment than the US during the recession due to Labour’s labour market reforms so we started from a lower base.
(2) The US stimulus was meant to save jobs as well as create them. That doesn’t show up in Rove’s data which just shows the relatively static unemployment rate. The point is that it would have been much worse without the stimulus.
(3) Our unemployment level has improved before the cuts have really kicked in. For your expansionary fiscal contraction thesis to be put right you will to see unemployment continuing to fall through the austerity period ahead.
As for Rove’s record: one stolen election, the decimation of multilateral foreign policy,Iraq, Guantanamo, tax cuts for the rich, stagnating living standards for the middle class, a decade of job losses, erosion of Clinton’s balanced Budget. Given that he had to work with Bush you have to admire his electoral strategy but you’re welcome to him if you want to align yourself with that record.
13eastie
Success?
Only if you are using the goal-posts-on-wheels that are now essential aparatus for modern Keynesians.
In real life, success is measured AFTER the intervention against criteria defined BEFORE the intervention, and incorporating in full all NPV items.
Will attempts to do precisely the opposite.
The conceit on the left never fails to amaze with respect to the ridiculous notions of “job creation” and “investing in jobs”.
Presumably Will’s eagerness to credit Obama for every job “created” in the last two years is matched by his urge to castigate Brown for every job he destroyed 2008-2010?
No politician has ever created a job for anyone (except, perhaps, the odd favoured colleague, sensing a quango opportunity). To invent jobs out of thin air, which no-one else is willing to fund with their own money, is nothing more than creating an overhead. And the future tax burden to fund it.
This tax burden, by undermining demand and scaring away real investors, actually DESTROYS real jobs.
And overheads created in isolation can never sensibly be termed “investment”.
Jobs are only ever really created by people willing to pay up-front with their own money.
@4
Will, your final paragraph reads like a precis of “A Journey”!
Leon Wolfson
Guido;
Our “employment” figures are based off a survey. The accurate figures we have are for unemployment benefit recipients. They’re rising.
13eastie – Shame about the data showing you’re spouting a party line, not the facts.