Fed’s claim of job creation poor wording

Freedom New Mexico

Washington claims 640,000 to 1.5 million jobs have been created or saved by the $787 billion economic stimulus plan.

With only about 15 percent of the money spent so far by those intended to receive it, at this rate America might implausibly end up with more new jobs than available workers.

Has the federal government really created or saved all those jobs by taking other peoples’ money to give to someone else?

The White House said 640,000 is the most accurate estimate of stimulus jobs yet. But Vice President Joe Biden said, “We’ve created over a million jobs.”

That’s some margin of error.

“Projecting job creation with any degree of accuracy was always inherently impossible, and should never have been taken seriously,” noted Tony Fratto, CNBC commentator and former deputy assistant to President George W. Bush.

“Government job creation is an oxymoron,” agreed Bill Dunkelberg, chief economist at the National Federation of Independent Businesses. Why? Because, as Bloomberg columnist Caroline Baum pointed out, “It ignores what’s unseen.”

Unverifiable claims of creating and, more problematically, of “saving” jobs focus, at best, on one side of the ledger. Washington has no money for job growth that it doesn’t take from someone, thus depriving those businesses and individuals of job-growth capital of their own.

Then there’s the fanciful claim of “saved” jobs. “How do you know what a saved job is?” asked Steven J. Davis, University of Chicago economist and author of several studies. “How do you know what jobs would have been lost without this?”

The Obama administration-popularized concept of “saved jobs” is an assertion that can’t be proved. Perhaps more important politically, it can’t be disproved, either.

“This was a clever political gimmick to make it even harder to determine whether this policy has any effect,” Davis said. The claim is currency that can’t be proved to be counterfeit while politicians spend it to buy public support.

Moreover, the allegedly created job total doesn’t account for workers moving from an existing job to another. The new job is gained, but the old one was lost. Reporting the gain without the loss distorts the picture.

What we know for sure is 7 million jobs have been lost in the recession, about 5 million since President Obama took office and 3 million since he signed the stimulus bill. Job growth always trails economic recovery, as it did in 2003 after 2001’s downturn.

The White House claims by 2111 the stimulus will create or save 3.5 million jobs. Meanwhile, stimulus recipients have incentive to claim their cash handouts created or saved jobs in order to position themselves for more should Washington go the stimulus route again.

Industries are loathe to invest because of the uncertainties of Washington’s proposed taxes and penalties in pending health care and global warming legislation. Rather than take money from real job creators to throw at doubtful job creation and saving programs, Washington should back off further economy-dampening proposals that penalize employers.