Job One is to Tell the Whole Jobs Story

Posted October 30th, 2009 at 4.31pm in Ongoing Priorities.

Whenever government throws billions of dollars at the economy, one would certainly expect to find some jobs at the end of those dollars. President Obama has worked hard to convince the nation that the mega fiscal stimulus he signed into law produced some 650,000 jobs. This PR blitz is amazing in the face of an economy that has shed 3.4 million jobs since Obama was sworn in, the unemployment rate is pressing toward 10 percent, and the Obama jobs gap – the gap between where he promised we would be and actual employment — rises monthly.

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Political chutzpah aside, the numbers Obama is tossing around are grossly misleading. The problem is not the calculation itself. This is a political guesstimate and no doubt the duly tasked bean counters are doing their level best to count every last bean job. For that matter, the problem is not government inefficiency and waste. That was assumed from the outset, so it should not surprise anyone that according to the government’s own data some $173 billion has been spent thus far and all they can point to is a relative handful of jobs. The problem is the Obama figure only tells half the story.

The Obama jobs figure is a guesstimate of the number of jobs created from the spending. It is analogous to the gross income a company earns on sales. But what matters, of course, is net income, on in this case, net jobs, and that requires an estimate of the net cost.

The net cost in this case derives from the simple fact that the federal government is borrowing money to spend money. Government borrowing subtracts purchasing power from the economy just as government spending adds it back in. Absent the government borrowing and spending, consumers and businesses would have borrowed the funds and spent the funds. The same mechanisms that supposedly created the jobs from the government spending would have created jobs from private spending.

At best, the jobs created and destroyed are a wash. Of course, the jobs that are destroyed are scattered across the economy and across the country and cannot be identified specifically, though wouldn’t that be interesting. Imagine the pictures and story of the worker who lost a job because government borrowed money. However, the destruction of those jobs by borrowing is every bit as certain as the creation of jobs by deficit spending.

It is possible to calculate with fair precision the net jobs created by Obama’s attempt at fiscal alchemy. Adding jobs gained to jobs lost produces a big fat squadoosh, nada, zippo, zero. It’s also possible to show the increase in the national debt that produced this outstanding government policy result – by last count it was $173 billion.

Author: J.D. Foster
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October 30, 2009 Bobbie Jay writes:

It’s hard to believe this can’t be stopped under the principles of this County. It’s hard to believe any American born, would go so low to collapse this country. It’s hard to believe somebody would take the highest position of the land after he told the people he wasn’t qualified. The reasons are plain to see. It’s just hard to believe…

October 30, 2009 Jim, South Carolina writes:

Can 200 people generate enough economic activity to create one more paycheck?

If so, then you can create “local shopping” programs that can lower the unemployment rate 1%. In South Carolina that would be more then 20,000 jobs created from the production and purchase of goods and services, without one dime of “bailout” or “stimulus” money. Across the United States, the 200-to-1 local shopper to job creation ratio would create 1.5 million jobs.

With regards to the high unemployment rate, it is not the job that is important. It is the paycheck that is important. Therefore, a “paycheck creation” program is needed.

The unemployment rate is a percentage of the labor force that is unemployed. Since the labor force is approximately 50% of the population (this varies from county to county,) jobs need to be created for approximately 1/2 of 1% of the population to shift the unemployment rate 1%. The ratio of population (local shoppers) to a 1% unemployment rate shift is about 200 to 1.

The following link will download an analysis that presents a starting set of numbers for the wages, generated from per capita economic activity, that would lower the South Carolina unemployment rate 1% (20,000+ jobs.)

http://paycheckeconomics.wordpress.com/2009/08/26/an-approach-to-lowering-the-south-carolina-unemployment-rate-1-2/

Being a per capita based, this analysis this can be adopted for any community, county, state, or even nationally (it all adds up.) The following link will download an analysis that presents a starting set of numbers for the wages, generated from per capita economic activity, that would lower the United States unemployment rate 1% (1.5 million jobs.)

http://paycheckeconomics.wordpress.com/2009/10/18/an-approach-to-lowering-the-united-states-unemployment-rate-1-on-about-20week/

October 31, 2009 Roger D Henderson Nv writes:

This is why Obama couldn’t figure out that Honduras dictator-to-be Manuel Zelaya got thrown out by constitutional means; in fact, both Obama and Hillary just thought it was a Colonels’ Coup against a democratically elected president, just like the old days. Anybody who read the papers knew it was Zelaya who was trying to conduct a violent coup against Honduras’ elected leadership, but they just couldn’t figure it out. What’s wrong with a Leninist revolution anyway? Hugo made it work just fine in Caracas. Fidel is the model. Now the Left is really worried that Venezuelans and Nicaraguans might figure out that they can throw out their dictators by legal means. They’re fervently hoping that all this constitutionalism doesn’t spread.

To read the complete text go to;

http://www.americanthinker.com/2009/08/obama_as_leninoid.html

October 31, 2009 Leon, Durango, CO writes:

Take Cap and Trade. It is already killing jobs out West, the oilfields are being punished by Obamagangsters. I’m pretty sure there isn’t a single bird in Southern Utah they can point to as an Oil Well kill (don’t look at the birds on windmills). It isn’t jobs, it is your job, because Obama is appointing people. I assume he intends to make millions of appointments to Federal Jobs (for a Chicago style price).

No, it isn’t just free fall unemployment. What Foster has shown is the Graph Of Driven Down Unemployment. It was intentional by Obama’s ‘taking over’ plan, probably from his Crack days. If this guy is not the Manchurian Candidate, he is life imitating art, ACORN drove the Housing Crisis government takeover Finance disaster. Are you comfortable now that Fanny, Freddy, Franks probably holds your mortgage? How much of the Means of Production does Obama intend to Nationalize?

Cap and Trade is the Coup de Gras! Death to America (one industry at a time) only this time it is Energy. See ya next week when the Looney Tunes Gang destroy, ta da! Health Care!

November 1, 2009 Freedom of Speech, TX writes:

It is not the fact that estimates often fall short of projections. This certainly happens.

The “saved jobs” nonsense cannot be measured. It took this administration to use this tactic for the first time.

The playing with the numbers to put a good face on a hideously ugly situation is what is amazing. The sheer arrogance for the sake of political appearance?

Americans are generally forgiving if someone says, “I was wrong”. What Americans are tired of is the same old excuse making and slight of hand. It is insulting.

Of course, as long as we have Americans unwilling to see (or accept) the truth, politicians will continue this tactic and play the law of averages.

Politics are going to change or congressional members are going to go through revolving doors every two and six years. They would be wise to start leveling with the American people - that starts with honesty.

November 1, 2009 Obama’s Massive Jobs Program (Biden Touts Huge Successes) « Zipline Conservative writes:

[...] JOBS…A STORY OF SUCCESS! (How many are government jobs v. private sector?) [...]

November 2, 2009 Tommy..........Alabama writes:

all the jobs saved or “created” is gov.jobs….we need smaller gov.Not bigger gov.to cost taxpapers,not lolfers greater tax burden.Or.is really proud,of the jobs they have saved or created is permanent,just bigger gov.

November 2, 2009 Tommy..........Alabama writes:

jobs

November 2, 2009 Jeanne Stotler, woodbridge, Va writes:

This administration along with Congress are out to rule all of us. The belief among liberals is that WE DON’T have enough brains to decide what is good for us all. They are acting unconstitutional and commiting Treason. This needs to be stopped and we need someone to fight for us in the corrupt Justice Dept. Obama needs to be impeached for neglegting his sworn duty “to uphold the constitution” and most of The Senate and House recalled for the same reason. Come on americans UNITE, REVOLT.

November 2, 2009 duelles, santa fe writes:

As being unemployed and homeless - mooching off friends and family or short term rentals - for the last two 1/2 years suits me well I have actually found that there is a demand for my skills as a finish carpenter. It is probably like most things in life tht when you stop trying so hard things come your way - especially if you are prepared for them anyway.

I feel for those who can not do what I do. Travel and relax. Often, since I am not looking for work, people trust me. They are more willing to give me work. Strange world.

Obama might try not trying so hard things might turn around for him, but I don’t think he is prepared properly for what is dropped in his lap.

November 2, 2009 Normca writes:

The only ones that believe this tripe are the sole constituency of Obama, who cannot or would not use a calculator, who are waiting on line in Detroit for Obama’s stash, who watch NBC and believes them as well as those who read the headlines of the NY Times and etal. Jobs saved; what a travesty. Its George Soros and the unions who will continue to back Obama in upcoming elections. The major unions were the main recipients of the porkulus bill. 500,000 plus jobs lost just last month and the MSM says its not as bad as projected. The VP for Obama said it; the stim package is working better than we thought.

November 2, 2009 Lloyd Scallan - New Orleans writes:

The above comments, as well as the article, are very troubling. Obama is not “guesstimates” or
“misleading”. Why can’t you understand Obama is
lying through his teeth in order to drag this
country down into a socialist hell. Every time
Obama and/or one of his lackeys make any type statement, you all must realize it is pure and simple A LIE!

November 2, 2009 Louis L Cesar F Levy DAYTON OH writes:

The Woman seating and siting in the World(see the Bible) is that Infamous destroyer of our Economy and all She can throughout our Left and Radicals who perfectly serve Her purpose.
Only those ready to go with me, will ultimately save this Country, Europe, the whole West against Her offenses and offensives. Please sharpen your sight so to SEE the Woman and the Abominations She is doing, then come with me, for I know how to Fight Her and her lurkers hosts.If we keep talking only, She will keep doing. We need to start doing, WHAT IT TAKES.

November 2, 2009 Jerry from Chicago writes:

It’s terribly obvious that the ‘Stimulous’ bill did very little to stimulate the economy. If you take out the number of additional government jobs that the Stimulus created, the temporary minimum wages jobs, and the over-blown estimates (which have been proven to be false) provided by certain sectors, the Stimulus has done virtually nothing to stem the tide of growing unemployment, now averaging 9.8% across the country. But in places like Detroit, unemployment has got to be over 15% and probably closer to 20%.

The most frustrating of all is that the Stimulus monry could have been put to immediate use in rebuilding the energy infrastructure in this country, the building of numerous nuclear energy plants and the building of new refineries in America. These are useful projects that could put hundreds of thousands of Americans back to work immediately.

But what is our administration doing? The same thing they are doing about Afghanistan, sitting on their hands, dithering about the “right” thing to do and doing nothing.

November 2, 2009 John Roane Sarasota, Florida writes:

This tells the story from a vantage point of 1948.
Look at this: Click below:

http://nationaljuggernaut.blogspot.com/2009/09/this-cartoon-seemed-far-fetched-in-1948.html

November 2, 2009 Thomas, USA writes:

“Obama might try not trying so hard things might turn around for him, but I don’t think he is prepared properly for what is dropped in his lap.”
The only thing dropped in Barrys lap was his teleprompter. All presidents have some form of crap laid in his lap. What to do with what you are given? Make it worse or make it better. At least Bush helped the private industry create jobs. When will the libs do this? Never. They want what all dictators want, more power over more people. I will get behind any politician whom will help me keep more of my own hard earned money. Welfare is the one thing the government knows will keep people in poverty, so lets have more of it.
People please use common sense here, not political careers.
President Barry is going to spend 1 trillion next year on welfare programs alone. When will the American taxpayer wake up from this delusional state of mind.

November 2, 2009 Why is Obama spending trillions when government spending failed in Japan? « Wintery Knight writes:

[...] W. Bush cut taxes in his first term and created 1 million NEW JOBS. Obama has LOST 3.4 million jobs in a few months with his trillions of dollars of spending that the private sector cannot pay for. [...]

November 2, 2009 Patrick Kaiser, California writes:

Lloyd, please. I’m going to trust the Heritage Foundation on this one over some guy in Chicago.

This article makes a very good point: that while 0.65 million jobs saved is all well and nice, it doesn’t compare to the several million jobs lost/destroyed. Net value is the important thing.

November 2, 2009 Stephanie, Redwood City, CA writes:

This is ridiculous. All I can see around my area are shuttered businesses, empty strip malls and NO JOBS. These people who say the economy is improving need white canes.

November 3, 2009 Susan, Detroit writes:

Obama is out to detroy america. I feel I am living the 1984 novel.

November 3, 2009 Ken St Louis writes:

To Arms, TOO ARMS, take back AMERICA! CAn you believe that this anti american moron is in our White House!How SAD.The only answer is SECESSION!
We need people in state legislatures to introduce bills to SECEDE from the union!

November 4, 2009 Fred writes:

That is a stunning graph.

Washington needs to get real!

November 4, 2009 Richard, Alabama writes:

Government jobs created by the new administration are impossible to undo later. Once the agency is formed, it lives forever, and we pay forever. If the government wants to reduce expenditures, have an across the board 5% job cut - I’d have said 10% but then unemployment would have easily exceeded 10% nationally. And we know Obama is about to cut government jobs.

November 5, 2009 Bobbie Jay writes:

If government had integrity to discipline their constitutional duties, there wouldn’t be unemployment of this magnitude.

ALL CAUSED BY GOVERNMENT CORRUPTION AND THEIR UNNECESSARY OVERREACH!

November 6, 2009 Obama Jobs Deficit Hits 7.7 Million and Climbing; Unemployment Hits 10.2% « Reboot The Republic writes:

[...] Fortunately, the economy’s natural recuperative powers spurred by powerful, effective stimulus from the Federal Reserve mean the recession may be ending in the sense that overall output and incomes are stabilizing and the recovery may be on the horizon. Last week’s report that the economy grew at 3.5 percent at an annualized rate was certainly good news, though efforts by the Obama Administration to spin this as suggesting the stimulus legislation was working …. [...]

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