"The welfare of humanity is always the alibi of tyrants" - Albert Camus

Monday, October 10, 2011

So Mr. President, Economists Agree, Eh?

The latest whopper to be added to the untruths uttered by the Liar-In-Chief came during this Saturday's Weekly Address to the nation.  Obama, talking about his jobs bill in the Senate that his own majority party blocked last Thursday, said "...this jobs bill can help guard against another downturn here in America.  This isn’t just my belief.  This is what independent economists have said.  Not just politicians.  Not just people in my administration. Independent experts who do this for a living have said that this jobs bill will have a significant effect for our economy and middle-class families all across America.  But if we don’t act, the opposite will be true — there will be fewer jobs and weaker growth."

Oh, really Mr. President?  It is a good thing I caught a glimpse of what economists think in a Bloomberg article ten days ago with a typically misleading heading for the left leaning rag that it is: Obama Jobs Plan Prevents 2012 Recession In Survey Of Economists.  The article itself was of not much value to me as nothing much that left wing Bloomberg says ever impresses me, however the table showing the consensus of economists at the end of the article was very revealing:

                                                   Table of Forecasts
                           GDP     GDP     Jobs (thous)     UR Change
                           2012     2013     2012    2013     2012    2013
Median                0.6        0.2        275      13        -0.2     -0.1
Count                   34         30          28       28          28      26
Action Eco          0.0        0.0           0         0          0.0     0.0
AIG                     0.7        0.1        250     100        -0.5    -0.2
Aletti                   0.4        0.0         n/a      n/a          n/a     n/a
Anderson Eco     0.5        0.5        500     500         -0.5     n/a
BBVA                 1.3        0.9        900     900         -0.8    -0.7
BNP Paribas        0.5      -0.3        500    -300          n/a     n/a
Clearview Eco     0.8       0.8        750     750         -0.5    -0.5
DB                       0.0       0.0            0         0          0.0      0.0
Econoclast           0.0       0.0            0         0          0.0      0.0
Euler Hermes       0.0     0.0              0        0           0.0     0.0
Fact & Opinion    0.5     0.5          500  1,000         -0.1    -0.3
Faifield                 n/a     n/a          300     200         -0.2    -0.3
Fannie Mae          0.7     0.0          500         0           0.0     0.0
Goldberg Inv        n/a     n/a          150     100           n/a     n/a
Goldman Sachs    1.5     n/a           n/a      n/a           n/a     n/a
Guerrilla               1.5    -1.0          200       0           -0.2     n/a
H. Johnson            0.2     0.3            25      45           0.2     0.2
JP Morgan            0.1      n/a          n/a     n/a            n/a     n/a
MacroEco             1.3     n/a           n/a     n/a            n/a     n/a
MacroFin              1.5     1.5       1,000   1,000        -1.0    -1.0
Manulife               1.5     0.5       2,000     700         -1.0    -0.3
Mizuho                 0.2     0.0           n/a      n/a           n/a     n/a
Moodys                 2.0     1.0       1,000        0          -1.0    -0.4
NFIB                    0.0     0.0               0        0           0.0     0.0
Niagara                 1.0     0.1          125        0           0.0     0.0
Nord                     0.4     0.5            n/a     n/a          -0.2    -0.4
Parsanec               0.5     0.5        1,100     700         -1.0    -0.5
Pierpont                0.3     0.0            50         0          -0.2     0.0
Raymond James   0.3     0.2          350       25          -0.5    -0.1
SPSU                    0.9     0.1          110        0            0.0     0.0
SocGen                 1.7     0.8              1        1           -0.4    -0.2
State Street           1.2    -1.0          340    -370          -0.2     0.3
Standard Charter  1.0     0.5          600      300           0.0     0.0
Unicredit               2.0     n/a          n/a      n/a            n/a     n/a
W Hummer           0.2     0.2         150     200           -0.1    -0.1
J Forest                 1.0     1.0          n/a      n/a           -1.0    -0.5
Let's see.....
The administration estimates that the bill will create about 1.9 million jobs.  With the exception of a few economists who have enough integrity not to venture a wild assed guess based on faulty (because you cannot model human behavior, especially when the administration in charge is actively destroying the free market system) econometric models, the range of estimates for what the nearly half a trillion dollar bill would create in the way of jobs is huge: from job losses of 30,000 to job gains of 2.7 million.  The median estimate of new jobs estimates is 288,000 over two years at an approximate cost of quarter of a million dollars per job!  Even if those jobs were created, stimulus can at best create temporary jobs that are hugely expensive - not the productive type that free markets create.
With wildly varying estimates, I don't know about you but that is no consensus in my book.

While at the subject of jobs, the Labor Department reported that there were 108,000 newly created jobs in September.  Exactly 28 years ago, a year after the deep 1982 recession, economy added 1.1 million jobs in September 1983.  The difference between then and now isn't the magnitude of the recessions but the policies the U.S. pursued to restore growth.  Under Reagan, tax rates were cut, loopholes were closed, regulations were eased, and government was in retreat.  Today, we've had a spending and regulatory boom, the threat of higher tax rates, and a hostile, antibusiness political climate.  Policies have consequences, Mr. President.



Obama is quite simply, a liar. At his core, he is a serial liar and will say anything to anyone to further his cause.

He knows absolutely everyting about nothing.

Tenth Generation Patriot said...


What I find amazing is that in September there were 108,000 jobs created, but each week, over 400,000 people applied for new unemployment benefits. My math is considerably better than Mr. Obama's. That works out to over 1.1 million negative jobs in September. I can't imagine why anyone is listening to economists or Obama.

Sinan Unur said...

I am proud to have signed the CATO ad back in 2009: http://www.cato.org/special/stimulus09/alternate_version.html

Yesterday, the Nobel committee redeemed themselves by awarding the Economics prize to Sargent and Sims, the two modern economists who did much to dismantle the imaginary inflation/output trade-off peddled by Keynesian full employment fairy tale (among other things ;-)

So, in a moment of crisis and amnesia, the lessons of the 70s were swept under the rug. It was as if Hayek had never won the Nobel prize decades after his original arguments against the planner/interventionist cadre. It seems like the tide is turning.

So, Mr. President, any economist who's not looking to land a job in your government is unlikely to agree with the rubbish you are pushing.

The Patriot said...

Nobel committee is psychotic. Occasionally they will award a prize to an economist who merits it but usually they are a joke (as Krugman's prize indicates)

I am always put down by my Keynesian economist friends because I am not a big fan of econometrics. I adhere to the classical school (could say symphatize with Austrian school to some extent) My contention is that unless you understand not only economic theory, but have a classical training in sociology, psychology, history, logic, etc. you do not have the equipment necessary to model anything. They claim that I have no arguments because I do not live my life by economic models. It is neverthless a riot when I ask them to test their hypothesis by measuring the accuracy of their models against empirical evidence. To them, that means simply drawing a graph to re emphasize their points.

Talking to a Keynesian is like talking to a 5 year old.