is the wsj a bunch of troublemakers?

[luke warm]

wsj article

The White House is finally coming to realize that taxes affect job creation. Terrific. Its solution seems to be to bribe employers for hiring new workers, albeit only for a couple of years. Less than terrific.

Alarmed by the rising jobless rate, Democrats are scrambling to "do something" to create jobs. You may have thought that was supposed to be the point of February's $780 billion stimulus plan, and indeed it was.

 

White House economists Christina Romer and Jared Bernstein estimated at the time that the spending blowout would keep the jobless rate below 8%.

 

The nearby chart compares the job estimates the two economists used to help sell the stimulus to the American public to the actual jobless rate so far this year. The current rate is 9.8% and is expected to rise or stay high well into the election year of 2010. Rarely in politics do we get such a clear and rapid illustration of a policy failure.

http://s.wsj.net/public/resources/images/ED-AK321A_1jobs_D_20091011165619.gif

[barmar]

Clearly they missed the mark with their estimates. But does that mean that there was a policy failure, or just that estimating this kind of thing is really, really hard? What that chart doesn't show is what the jobless rate would have been without the stimulus. If it would have been even worse than it is now, then the stimulus achieved some success.

 

It's like using an umbrella in a torrential downpour. It won't keep you as dry as it would in an ordinary rain, but it's still better than not having it at all.

[jdonn]

Yes I mean like the stimulus bill or don't like it, but the argument "unemployment is far higher than expected, therefore the stimulus didn't work" is obviously asinine.

[luke warm]

Yes I mean like the stimulus bill or don't like it, but the argument "unemployment is far higher than expected, therefore the stimulus didn't work" is obviously asinine.

so you don't think the stimulus was a policy failure?

[Winstonm]

Yes I mean like the stimulus bill or don't like it, but the argument "unemployment is far higher than expected, therefore the stimulus didn't work" is obviously asinine.

so you don't think the stimulus was a policy failure?

Which one, Bush's or Obama's?

 

Just kidding - they both sucked. Economist are the worst at forecasting, 99% said there would be no recession 3 months after the recession had started - the one they are now calling The Great Recession.

 

Credit collapse is not solved by stimulus - they are treating a credit infection with an inventory drug.

[kenberg]

I am not so critical of either the economists or President Obama on this. The problems were immense. If the republicans were geniuses we would never had gotten into the fix, if democrats were geniuses the recovery would be faster. And if I were an economic genius I would have sold short on Bear and bought Bank America, or whichever bank stock I should have bought, when it was trading for peanuts.

 

I in no way mean to underplay the hardships of the many who are looking for a job but the fact is that everything pretty much went to hell and it now looks as if maybe, but maybe not, we might get through this without total collapse. We should help as best we can. By all means it is worth looking to see what worked and what didn't but I don't believe that joblessness rising to near 10% is proof of much except maybe that there were a lot of things done by a lot of people that didn't work out as planned. Economics is not physics, and I doubt that it ever will be. Presumably the WSJ knows this, just as I do.

 

All that being said, I see that the government is planning on giving me another $250. I'll take it, but as with the last $250, I don't understand the purpose.

[cherdanno]

Yes I mean like the stimulus bill or don't like it, but the argument "unemployment is far higher than expected, therefore the stimulus didn't work" is obviously asinine.

so you don't think the stimulus was a policy failure?

Well, some think it should have been bigger. I guess they may have been right. But I am sure it has prevented the situation from becoming much worse.

[ArtK78]

I have no way of demonstrating whether this is true or not, but I suspect that doing nothing rather than providing the stimulus packages would have been a disaster.

 

Whether the stimulus packages actually provided were the best option available is an entirely different question.

[ArtK78]

All that being said, I see that the government is planning on giving me another $250. I'll take it, but as with the last $250, I don't understand the purpose.

The purpose is to compensate for the fact that there will be no cost of living adjustment to social security payments in 2010 for the first time since social security COLAs were introduced.

 

It is largely a symbolic gesture, but don't tell that to the people who need every penny of it.

[hrothgar]

Yes I mean like the stimulus bill or don't like it, but the argument "unemployment is far higher than expected, therefore the stimulus didn't work" is obviously asinine.

so you don't think the stimulus was a policy failure?

Well, some think it should have been bigger. I guess they may have been right. But I am sure it has prevented the situation from becoming much worse.

I'll note in passing that the overwhleming majority of Economists would agree with Cherdanno.

 

"The Stimulus worked" is not quite consensus, but still enjoys overwhelming support.

[jdonn]

Yes I mean like the stimulus bill or don't like it, but the argument "unemployment is far higher than expected, therefore the stimulus didn't work" is obviously asinine.

so you don't think the stimulus was a policy failure?

That is not what I said, I said this particular argument used against it (which happens to be the most common one I've seen) is stupid, and I will further add only either someone who is ignorant, or biased, or who isn't thinking through the comparison would be influenced by it. I'm not saying there aren't other reasons to think the stimulus has been bad.

 

But since you ask my opinion, it isn't even close to having failed. Any project or job it has supported is a job better that unemployment is, and unemployment can get as bad as it wants but it won't change that fact. Btw wasn't it passed as a 2 year plan? And we are calling it a failure after what, 7 or 8 months?

 

I saw a report that the most common use of stimulus money by the states has been to keep teachers from losing their jobs. Hundreds of thousands (literally) of teaching jobs have been saved. This doesn't cause unemployment to be reduced, it simply keeps it from increasing farther. But on top of that it has helped prevent a (further) decline in educational standards that would be caused by a (further) shortage of teachers. So the 'success' of the stimulus bill has in fact extended beyond even jobs, into something that's almost impossible to quantify.

[luke warm]

Yes I mean like the stimulus bill or don't like it, but the argument "unemployment is far higher than expected, therefore the stimulus didn't work" is obviously asinine.

so you don't think the stimulus was a policy failure?

Well, some think it should have been bigger. I guess they may have been right. But I am sure it has prevented the situation from becoming much worse.

I'll note in passing that the overwhleming majority of Economists would agree with Cherdanno.

 

"The Stimulus worked" is not quite consensus, but still enjoys overwhelming support.

That is not what I said, I said this particular argument used against it (which happens to be the most common one I've seen) is stupid, and I will further add only either someone who is ignorant, or biased, or who isn't thinking through the comparison would be influenced by it. I'm not saying there aren't other reasons to think the stimulus has been bad.

ok, fair enough - the wsj *is* a bunch of troublemakers... and the editorials are "stupid" and "asinine" (or at least this one is)

[jdonn]

That is not what I said, I said this particular argument used against it (which happens to be the most common one I've seen) is stupid, and I will further add only either someone who is ignorant, or biased, or who isn't thinking through the comparison would be influenced by it. I'm not saying there aren't other reasons to think the stimulus has been bad.

ok, fair enough - the wsj *is* a bunch of troublemakers... and the editorials are "stupid" and "asinine" (or at least this one is)

In this case, yes and yes. Do you disagree? What do you think?

[PassedOut]

ok, fair enough - the wsj *is* a bunch of troublemakers... and the editorials are "stupid" and "asinine" (or at least this one is)

It's clear that the stimulus averted the disaster, but was not sufficient to reverse the unemployment statistics as quickly as hoped. With the bad fiscal situation handed to Obama and the new congress, they were understandably reluctant to allocate the amount of stimulus money recommended by Krugman, et. al.

 

Of course the WSJ has an ax to grind and prints misleading charts and numbers to support its narrow objectives. So do other organs, of differing political persuasions.

 

In this case the slant is obvious, but sometimes it is harder to detect. In the case of the WSJ, though, I think it's safe to assume that any politically-oriented "information" of this type is bogus.

[Lobowolf]

I think as support for the position "The stimulus failed," it's specious and meaningless.

 

As relevant information about how much guesswork is involved in ascertaining the consequences of huge economic decisions, I think it's very good information. The figure of 9.8% is about 25% higher than the projection of under 8%. This is less than a year later. I think that's EXTREMELY useful information to have available when evaluating the claims of anyone, pro or con, who tells you what the economic impact of anyone's healthcare bill will be in 9 years.

[kenberg]

All that being said, I see that the government is planning on giving me another $250. I'll take it, but as with the last $250, I don't understand the purpose.

The purpose is to compensate for the fact that there will be no cost of living adjustment to social security payments in 2010 for the first time since social security COLAs were introduced.

 

It is largely a symbolic gesture, but don't tell that to the people who need every penny of it.

Yes, for example a 35 year old who has two kids and a mortgage, and just lost his job.

 

 

Of course I will cash the check. But there is a fundamental principle that I don't like to see them screw around with. Social Security increases are tied to cost of living. So is my retirement plan. I paid heavily so that my plan has unlimited adjustments tied to cost of living, compounded. As long as everyone keeps their word on these plans, I can live to 100 and I will be fine. I want no screwing around with COLAs. I don't want them saying I don't get it because gee it just costs too much or gee I don't really need it or gee anything else, and I don't mind the corollary that when the legitimate cola formula says no increase I get no increase. $250 is nice but don't expect me to kiss any ass for it. What is crucial is the long run honoring of doing what was promised. No screwing around. None. I can still work now but I don't want to be looking for a job when I am 90. This is important. The $250 is not.

[cherdanno]

I think as support for the position "The stimulus failed," it's specious and meaningless.

 

As relevant information about how much guesswork is involved in ascertaining the consequences of huge economic decisions, I think it's very good information. The figure of 9.8% is about 25% higher than the projection of under 8%. This is less than a year later. I think that's EXTREMELY useful information to have available when evaluating the claims of anyone, pro or con, who tells you what the economic impact of anyone's healthcare bill will be in 9 years.

I think it is much easier to predict the effect of the stimulus on the unemployment numbers, than to predict the actual unemployment numbers. So no, it's not useful for that either.

[Lobowolf]

I think as support for the position "The stimulus failed," it's specious and meaningless.

 

As relevant information about how much guesswork is involved in ascertaining the consequences of huge economic decisions, I think it's very good information.  The figure of 9.8% is about 25% higher than the projection of under 8%.  This is less than a year later.  I think that's EXTREMELY useful information to have available when evaluating the claims of anyone, pro or con, who tells you what the economic impact of anyone's healthcare bill will be in 9 years.

I think it is much easier to predict the effect of the stimulus on the unemployment numbers, than to predict the actual unemployment numbers. So no, it's not useful for that either.

But is it easier to predict the unemployment numbers this year or the fiscal impact of (pick your favorite health care reform bill) in 10 years?

[luke warm]

Of course the WSJ has an ax to grind and prints misleading charts and numbers to support its narrow objectives. So do other organs, of differing political persuasions.

you may be right, but how is the chart misleading?

That is not what I said, I said this particular argument used against it (which happens to be the most common one I've seen) is stupid, and I will further add only either someone who is ignorant, or biased, or who isn't thinking through the comparison would be influenced by it. I'm not saying there aren't other reasons to think the stimulus has been bad.

ok, fair enough - the wsj *is* a bunch of troublemakers... and the editorials are "stupid" and "asinine" (or at least this one is)

In this case, yes and yes. Do you disagree? What do you think?

i guess it depends on whether or not the article is correct that the stimulus was supposed to create jobs and whether or not "it would have been worse without the stimulus" is the same as creating jobs... i don't think it succeeded in its intention

[jdonn]

Of course the WSJ has an ax to grind and prints misleading charts and numbers to support its narrow objectives. So do other organs, of differing political persuasions.

you may be right, but how is the chart misleading?

The presentation of the chart as evidence of their claim was misleading, as demonstrated by the statement "Rarely in politics do we get such a clear and rapid illustration of a policy failure." As has been said many times in this thread this chart is not an illustration of the failure of this policy.

 

That is not what I said, I said this particular argument used against it (which happens to be the most common one I've seen) is stupid, and I will further add only either someone who is ignorant, or biased, or who isn't thinking through the comparison would be influenced by it. I'm not saying there aren't other reasons to think the stimulus has been bad.

ok, fair enough - the wsj *is* a bunch of troublemakers... and the editorials are "stupid" and "asinine" (or at least this one is)

In this case, yes and yes. Do you disagree? What do you think?

i guess it depends on whether or not the article is correct that the stimulus was supposed to create jobs and whether or not "it would have been worse without the stimulus" is the same as creating jobs... i don't think it succeeded in its intention

I understood the intention all along as to "create or save" jobs in combination, not merely to create them as you and the wsj both seem to believe. Obama said "create or save" so many times that the phrase completely burned into my mind, so I'm quite sure of that. And as I stated earlier, it has (undeniably) saved jobs numbering in at least the hundreds of thousands so far. Those specific jobs can be pointed to as the information is just starting to come out. From the Huffington Post (sorry to be so darn liberal but similar data is available many places online):

The national data won't be available until later this month. But based on preliminary information obtained by The Associated Press from a handful of states, teachers appear to have benefited most from early spending. That's because the stimulus sent billions of dollars to help stabilize state budgets, sparing what officials said would have teacher layoffs.

 

In California, the stimulus was credited with saving or creating 62,000 jobs in public schools and state universities. Utah reported saving about 2,600 teaching jobs. In both states, education jobs represented about two-thirds of the total stimulus job number. Missouri reported more than 8,500 school jobs, Minnesota more than 5,900. In Michigan, where officials said 19,500 jobs have been saved or created, three out of four were in education.

Are you trying to deny that unemployment would be higher if these jobs hadn't been saved?

[luke warm]

I understood the intention all along as to "create or save" jobs in combination, not merely to create them as you and the wsj both seem to believe. Are you trying to deny that unemployment would be higher if these jobs hadn't been saved?

read again what i wrote... another (dissenting from the wsj, and more or less) opinion:

 

article here

In an interesting opinion piece for the Wall Street Journal, Robert Barro and Charles Redlick give empirical evidence supporting the claim that stimulus spending doesn’t work. By “doesn’t work” they mean that the government spending multiplier is less than 1. This means that stimulus spending increases national income by less than the amount of new spending. Why? Barro and Redlick are vague on the reasons. They invoke “crowding out” and, presumably, the “permanent income hypothesis”:

 

It would be good to know more about why private investment fell. Is Robert Higgs’s “regime uncertainty” hypothesis about the Great Depression the explanation? Another possible explanation is the traditional Hayekian one: A substantial part of the problem is the prior misdirection of resources that aggregate government spending does not address or may even make worse.

[Winstonm]

An aspect of this ordeal I find sadly amusing is how quickly the media goes to the same sources who never saw this coming and didn't think it could even happen at all to explain how we will overcome the problem.

[matmat]

I'd love to see the error bars on the estimates. (not to mention a plot that starts at 0... blowing up a section like this should be a big no-no)

[cherdanno]

An aspect of this ordeal I find sadly amusing is how quickly the media goes to the same sources who never saw this coming and didn't think it could even happen at all to explain how we will overcome the problem.

Not to go all Winstonm, but isn't this the normal course of action? (Need I mention Iraq?)

[Winstonm]

There are certainly many reasons to doubt a V-shaped recovery is in the cards. Bloomberg reports:

 

U.S. state tax collections tumbled the most in almost half a century in the second quarter as the economic recession curbed levies on incomes and sales.

 

The 16.6 percent plunge was the biggest since at least 1963, the Nelson A. Rockefeller Institute of Government said today.

 

“We’re looking at a multiyear problem hitting essentially every state,” Robert Ward, the institute’s deputy director, told reporters. “It has happened during recessions before, but the depth of this decline is unprecedented in modern times.”

 

It's not unreasonable to try to be optimistic - but it is equally unreasonable to rely on delusion as a basis for optimism.