Handicapping the Future
by Craig Jennings, 2/18/2011
As part of his scheme to cater to business interests, President Obama yesterday appointed Intel CEO Paul Otellini to the President's Council on Jobs and Competiveness. The appointment of a corporate leader to such an advisory panel isn't particularly surprising, given that Obama has been bending over backward to make sure the opinions of Big BusinessTM are heard in the White House (you know, because they're soooo underrepresented). What is surprising is that Otellini has a blind spot for honest appraisals of economic policy.
Perhaps most interesting about Otellini is that he's offered some pretty blunt criticism of Obama's economic strategy — particularly the stimulus package that the White House says helped keep the recent recession from becoming another Great Depression. But Otellini and many Republicans counter that the stimulus was wasteful spending that did not achieve its goal.
"The decisions so far have not resulted in either job growth or increased confidence," Otellini said of the stimulus package in a September interview with CNN Money. "When what you're doing isn't working, you rethink it, and I think we need to rethink some plans." (emphasis mine)
The only people who make this claim are anti-government ideologues who'd rather pour lemon juice on self-inflicted paper cuts than admit that, yes, sometimes government intervention in the economy is necessary and beneficial. That Obama is seeking economic advice from someone so impervious to serious economic analysis is troubling. This is no way to win the future.
But let's take this opportunity to go back to the tape to see evidence that the Recovery Act created millions of jobs and show that Otellini doesn't quite have a handle on reality:
Council of Economic Advisors: The Economic Impact of the American Recovery and Reinvestment Act of 2009 Fifth Quarterly Report
The CEA estimates that as of the third quarter of 2010, the ARRA has raised employment relative to what it otherwise would have been by between 2.7 and 3.7 million, consistent with the initial estimate that the ARRA would save or create 3.5 million jobs as of 2010:Q4.
[the Recovery Act] Lowered the unemployment rate by between 0.8 percentage points and 2.0 percentage points, [i]ncreased the number of people employed by between 1.4 million and 3.6 million, and [i]ncreased the number of full-time-equivalent (FTE) jobs by 2.0 million to 5.2 million compared with what would have occurred otherwise.
Don't believe government-sourced information?
Wall Street Journal: Economists Credit Fed For Alleviating Crisis
On average, [of 54 economists surveyed] estimated that the stimulus added one percentage point to growth in 2009; they forecast gross domestic product would expand 3% this year, compared with 2.2% in the absence of stimulus. They estimated that the February unemployment rate, reported at 9.7% last week, would have been 10.4% without the stimulus.
ABC News: Stimulus Gets B-Minus Grade
"The stimulus worked," said Stuart Hoffman, chief economist at PNC Bank. Without it, "the unemployment rate would probably be closer to 11 percent" and the economy might not have grown at all last year."
Image by Flickr user justmakeit used under a Creative Commons license.