Obama’s Trumped-Up Job Count Flunks Science Test:
Caroline Baum
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Nov. 24 (Bloomberg) -- At first it was just an unverifiable assertion. Now it turns out to have been a case of bureaucratic ineptitude and possible fraud. Transparency and accountability aren’t working out the way President Barack Obama had hoped.
The administration was already skating on thin ice when it announced on Oct. 30, with great fanfare, that 640,329 jobs had been created or saved as a result of the $787 billion American Recovery and Reinvestment Act.
Not 640,000, or even 640,300. Six-hundred-forty-thousand- three-hundred-and-twenty-nine.
Asked about accumulating reports of phony jobs in phantom districts, Obama told Fox News’s Major Garrett that “this is an inexact science.”
Turned into an exact one by his administration, I might add.
Even Vice President Joe Biden had the good sense to round up to the nearest million, which puts the number of jobs created or saved in line with “government and private forecasters’ estimates” for the Recovery Act.
Local newspapers across the country started to notice problems with the, er, jobs. Small stuff, like jobs that weren’t created and congressional districts that don’t exist. You have to admire the consistency.
Watchdog.org, a collection of independent journalists covering state and local government, has put together a “Guide to the Stimulus, District by (Phantom) District.” Overall the group found that 440 phantom districts in 50 states, the District of Columbia and four U.S. territories received $6.4 billion and created or saved -- let’s consolidate to “craved” -- 30,000 jobs. That works out to $213,333 per job. Think how much easier, not to mention transparent, it would have been to hand out that kind of real money to real people who will spend it!
‘Misplaced Decimal’
It’s not only self-appointed watchdogs who have found problems with the data set. The Government Accountability Office, the investigative arm of Congress, issued its own report last week, citing “a range of significant reporting and quality issues that need to be addressed.”
Gene Dodaro, head of the GAO, told the House Oversight and Government Reform Committee he had found about 4,000 reports showing no money expended but the equivalent of 50,000 full-time jobs created.
At the same hearing, Earl Devaney, chairman of the Recovery Accountability and Transparency Board, said the errors could be divided into two categories: inaccurate data and noncompliance.
The first category includes things like sloppy bookkeeping, phantom districts and even a case of a “misplaced decimal,” which turned a $10 million contract into a $10 billion one.
I have the same problem. That’s one reason I have editors, to catch that kind of careless mistake before the public does.
Misplaced Incentives
The “second major reporting problem was a considerable amount of non-reporting,” Devaney said, probably testing to see if his congressional inquisitors were awake.
Currently there is no penalty for non-compliance, he said, suggesting it could be corrected by withholding future funds to recipients for failure to report.
As it stands now, all the incentives are stacked on the wrong side. They encourage districts to take the money and report healthy job creation in the hope of qualifying for more funds. Why doesn’t anyone think about this in advance? And these are the same folks to whom we’re about to entrust one-sixth of the U.S. economy, better known as health care?
I wrote last month that it’s a fantasy to think the government can trace jobs created from dollars paid, down to the last 29 people. There is no control study, no way to hold everything else constant in a dynamic economy (even a depressed economy is dynamic), no way to determine how much employment growth is a reflection of the economy’s natural tendency to grow and how much is manufactured by government spending.
Misplaced Idea
What’s more, it presumes government actions have no equal and offsetting reactions. If the government borrows and spends more today, implying higher taxes down the road, some other entity must spend less, now or in the future. No one can claim to measure what would have happened in the absence of fiscal stimulus.
How many small businesses are holding off on hiring additional employees until they know what additional burdens Congress will impose on them in the name of health-care reform? How are expectations of higher health-care costs affecting consumers’ current spending, which in turn affects output and employment? (Only in government la-la land can you provide more health care for less money.)
In the face of a 10.2 percent unemployment rate and growing doubt about government claims of jobs created, the administration is standing by its 640,329. After all, Devaney has “no doubt that there’s a lot of jobs being created.” It’s just a question of how many.
One million? 640,329? It’s close enough to zero for government work.
(Caroline Baum, author of “Just What I Said,” is a Bloomberg News columnist. The opinions expressed are her own.)
To contact the writer of this column: Caroline Baum in New York at cabaum@bloomberg.net.
Last Updated: November 23, 2009 21:00 EST
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How many small businesses are holding off on hiring additional employees until they know what additional burdens Congress will impose on them in the name of health-care reform? How are expectations of higher health-care costs affecting consumers’ current spending, which in turn affects output and employment? (Only in government la-la land can you provide more health care for less money.)
Obama's agenda is fueling UE just like this article says. no one is going to hire people until they know the costs down the road.
12.5% official UE here we come.
