Miscounting the Stimulus

Paul wrote a little while ago about the current jobless recovery and mentioned the role of the “stimulus” bill in that phenomenon. In my view, by any objective measure the stimulus package has been a miserable failure. The spending was not targeted in ways that could genuinely have helped the economy (e.g., infrastructure), it has gone disproportionately to supplement the budgets of state and local governments, most of the money still hasn’t been spent, and the results, as measured by the unemployment rate, are the opposite of what the Obama administration predicted.
In order to shore up their claims of success for the stimulus bill, Democrats have tried to count jobs “saved or created” by the legislation and have trumpeted the resulting numbers. The Associated Press did a little investigating, however, and found that the claims of job creation were wildly overstated if not deliberately misleading:

A Colorado company said it created 4,231 jobs with the help of President Barack Obama’s economic recovery plan. The real number: fewer than 1,000.
A child care center in Florida said it saved 129 jobs with the help of stimulus money. Instead, it gave pay raises to its existing employees.
Elsewhere in the U.S., some jobs credited to the stimulus program were counted two, three, four or even more times. …
The discrepancy raises questions about the reliability of a key benchmark the administration uses to gauge the success of the stimulus. The errors could be magnified Friday when a much larger round of reports is released. It is expected to show hundreds of thousands of jobs repairing public housing, building schools, repaving highways and keeping teachers on local payrolls.

No doubt tomorrow’s report will be equally misleading, only on a larger scale. Here are some examples of misreporting found by the AP:

In one major miscount found by the AP review, Colorado-based Teletech Government Solutions had worked with the Federal Communications Commission to come up with a job count for its $28.3 million contract for call centers fielding consumer questions about conversion of televisions to receive digital signals. The company reported creating 4,231 jobs–the highest number listed in the first stimulus accounting–even though 3,000 of those workers received a paycheck for five weeks or less.
“We all felt it was an appropriate way to represent the data at the time,” company president Mariano Tan said.
Now the job count is being adjusted to less than 1,000, Tan said, to meet the requirement that a job reported is equal to a full-time, 40-hour-a-week position held for one year.
The Toledo, Ohio-based Koring Group also received two FCC contracts to help people make the switch to digital television. The company reported hiring 26 people for each of the two contracts, bringing its total jobs to 54 on the government’s official count.
But the company cited the same 26 workers for both contracts, meaning the same jobs were counted twice. The job count was further inflated because each job lasted only about two months, so each worker should have counted as one-sixth of a full-time job.
The FCC spotted the problem and called company owner Steve Holland, who now says the actual job count is closer to five, not 54.

Basically, you can’t trust any statements of fact that come out of the Obama administration. For the administration, politics is everything, and “data” means whatever can be ginned up to support the administration’s failing policies.
PAUL adds: I agree, both with John’s concluding statement and with his view that the stimulus legislation has been a failure. In my view, it will have a net positive impact on employment, but that impact will be woefully insufficient to justify the cost. Both inaction and other interventionist approaches to stimulating the economy would have been preferable.


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