David Leonhardt’s column from yesterday’s New York Times that argued that the Obama stimulus “really worked” has, predictably, drawn gloating from left-wing commentators (“IT WORKED” is the Huffington Post’s headline).
Setting aside the question of what it means to say that the stimulus “worked” better than other potential policy options — although if you are interested Reihan Salam offered some relevant thoughts — let’s look at the arguments Leonhardt provides for the claims made by the headline, “Judging Stimulus by Jobs Data Reveals Success.”
First Leonhardt references the reports from various economic research firms that indicate that the stimulus generated roughly 1.5 million more jobs than there would have been in its absence. This is not news — in fact the Times ran a similar article affirming the stimulus’s success based on these same firms’ judgment back in November. Furthermore, the researchers in questions — IHS Global Insight, Moody’s, et al. –all employ standard macroeconomic models, similar to the Congressional Budget Office’s, that do not make use of new data to examine the stimulus’s impact. Instead, they use historical effects of government spending, apply the amount that the feds spent this time, and use the resulting number as their best guess.
Then Leonhardt presents two kinds of evidence that he thinks should prove “hard-core skeptics” misguided. The first is “the basic narrative that the data offer. Pick just about any area of the economy and you come across the stimulus bill’s footprints.” Specifically, he cites increased state and local government, corporate, and consumer spending. Of course, whether or not increased government spending is helpful is certainly a question in itself where “hard-core” skeptics are concerned. And he presents no evidence that corporate and consumer spending increase are attributable to the stimulus other than the fact that Mark Zandi of economy.com says so.
The second kind of evidence, according to Leonhardt, is that according to a paper by Carmen Reinhart and Kenneth Rogoff, our recession, because it features a financial crisis, is supposed to keep unemployment rates rising until 2012, but “the jobless rate is now expected to begin falling consistently by the end of this year.”
I’m sorry, expectations are not data.
So to summarize: Leonhardt’s article contains no new evidence indicating that the stimulus has “worked” (or failed, for that matter). He’s glossed over larger questions about what it means in the long run for the stimulus bill to be successful, begged the question about government spending’s usefulness entirely, and presented speculation as “data.” I wouldn’t even consider myself a “hard-core” stimulus skeptic, and yet I find this new evidence underwhelming.
But I can’t help notice that the article is very useful for the administration’s purposes. No wonder that ABC’s Jake Tapper tweeted, this morning, “WH loves this NYT David Leonhardt piece on stimulus… it’s been emailed 787 billion times to me (+ Gibbs tweeted it)”
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