Who can forget those beyond incredible job creation projection numbers of the Stimulus Bill. 3.5 million jobs, 4 million jobs, the promise was high and never mind spending almost a trillion dollars for these jobs. Recently the Council of Economic advisers issued a report on job creation from the Stimulus, at the same time, the White House claimed to have saved 750,000 jobs by August, 2009.
So, what's the catch? There is no real world, real data on the truth of these claims and there may never be.
We still have theoretical calculations on job creation, based on Stimulus spending as a ratio of GDP, and thus indirectly jobs.
As ProPublica noted:
In other words, if the job-creation numbers the administration gets from real-world data disagree with its estimates, they reserve the right to blame the data. From an accountability perspective, this will make it difficult to assess the stimulus' successes and failures.
Blame the data? How about blame the methodology and the fact that the government refused to tie the jobs to U.S. workers from the U.S. taxpayer funded (China debt) Stimulus?
Lest we forget, we live in an offshore outsourced world, where multinational corporations obtain large federal and state contracts, only to create jobs.....in India. GM, after receiving U.S. taxpayer funds to stop it from being liquidated, is offshore outsourcing the jobs, thinking Americans will support a very un-American car that is imported. It's so bad, offshore outsourcing companies literally estimated their Stimulus cut, as repeatedly warned about in past posts.
It is even estimated that illegal workers would get 300,000 of the new jobs created, simply because of Congress's refusal to use a simple system to check if a potential employee is authorized to work in the United States.
Where our taxpayer dollars are going is so outrageous, even food stamps are creating jobs in India. Meanwhile politicians talk about jobs, when they have vested financial interests in offshore outsourcing!
Factcheck.org is calling the Council of Economic advisers job calculation methodology fantasty job creation:
At President Obama’s April 29 news conference, he claimed that the American Recovery and Reinvestment Act has “already saved or created over 150,000 jobs.” Wait a minute. Isn’t the number of jobs actually plummeting?
According to the Bureau of Labor Statistics, the economy lost more than 1.3 million jobs in the two months after he took office, and it has probably lost at least another half-million in April. The day after Obama spoke, the Department of Labor announced that another 631,000 workers (seasonally adjusted) had filed new claims for unemployment insurance the previous week.
So what 150,000 jobs was Obama talking about?
It turns out the president’s claim is really an estimate of what his economic advisers think the stimulus bill is doing, and not based on any evidence of its actual effects.
Let's look at the Council of Economic advisers methodology again:
We therefore use the relatively conservative rule of thumb that a 1 percent increase in GDP corresponds to an increase in employment of approximately 1 million jobs, or about three-quarters of a percent. This has been the rough correspondence over history and matches the FRB/US model reasonably well.
The effect on jobs using the estimates from most private sector forecasting models would be somewhat larger. The effects on employment, however, lag slightly those on real GDP. To capture the usual pattern, we assume that one-half of the employment effect occurs in the contemporaneous quarter, one-third occurs in the subsequent quarter, and one-sixth in the quarter two quarters ahead.
Now that's all fine except for one small problem, in today's global labor arbitrage world, these rough multipliers are not proven.
Indeed, it has been shown that offshore outsourcing is affecting GDP and now it is inflated with numbers that should be attributed to other economies....where our jobs moved to! The rough estimate of phantom GDP, which is really offshore outsourcing, is 0.5%. That is 0.5% of the United States Gross Domestic Product growth, from 2007. Bear in mind, offshore outsourcing has increased since that time. This is economic growth which does not really exist because the jobs are offshore outsourced. The economic growth is really in other nations. So, note, the council of economic advisers seemingly is not taking this into account!
The Economic Policy Institute concludes we need 7 million jobs just to get back to pre-crisis employment levels.
Realize 25% of the Stimulus jobs are I.T. related. The I.T. industry is heavily targeted for takeover by the outsourcing industry.
Maybe it's time to demand our taxpayer money go to U.S. citizens, the U.S. labor force for some real investment and to generate U.S. income. Maybe a WPA is precisely what is needed, only tied to American workers this time.