I’m frustrated with the new emphasis on “saving and creating jobs” and find this state’s claims of X jobs saved or created to be little more than sucking up to the federal government teat which is currently on offer: the stimulus.
Keith Hennessey has a number of useful observations regarding a whole slew of economic indicators and related matters. I found the following dissection of the “saved and created” idea to be quite useful:
- Their “jobs created or saved” numbers are claims, not measures. Since we can’t know how many jobs would have been lost without policy changes, we can’t measure the change that policies have caused.
- This means they cannot prove their statements about the number of jobs saved or created by policy, and critics cannot prove those statements are incorrect. This lack of verifiability, and the vulnerability of these statistics to political bias, allow the Administration flexibility to adjust their claimed success to meet political demands. It is irresponsible for an Administration to use these numbers as definitive, and irresponsible for the press to report them without heavy caveats.
- Every time I hear “[number] jobs saved or created,” I ignore the number and assume I am being spun. This is particularly true when the numbers are specific, e.g., “250,000 education jobs saved or created.” I think this is irresponsible and misleading. It feels like they’re just making these numbers up. Reading the methodology behind the numbers only reaffirms this view.
- The fiscal stimulus is one of several policy moves contributing to stronger (or less weak) economic growth. The Fed’s and Treasury’s actions (begun last September) to stabilize large financial institutions and financial markets helped a lot. The Fed is also keeping interest rates extremely low. Administration officials routinely attribute all of the unmeasurable economic benefit to one of three major policy changes. This is invalid.
The second item is the most damning, in my view. No way to verify these numbers means that its like punching a bean-bag to try: We’ll wear ourselves out and find the beanbag to materially unaffected by our exertions.