Obama’s Economists: ‘Stimulus’ Cost $278,000 per Job

OBAMA’S STIMULUS DID NOT WORK and IS NOW CAUSING THE ECONOMY TO SHED JOBS Hat tip: Sweetness & Light
	When the Obama administration releases a report on the Friday before a long weekend, it’s clearly not trying to draw attention to the report’s contents. Sure enough, the “Seventh Quarterly Report” on the economic impact of the “stimulus,” released on Friday, July 1, provides further evidence that President Obama’s economic “stimulus” did very little, if anything, to stimulate the economy, and a whole lot to stimulate the debt. The report was written by the White House’s Council of Economic Advisors, a group of three economists who were all handpicked by Obama, and it chronicles the alleged success of the “stimulus” in adding or saving jobs. The council reports that, using “mainstream estimates of economic multipliers for the effects of fiscal stimulus” (which it describes as a “natural way to estimate the effects of” the legislation), the “stimulus” has added or saved just under 2.4 million jobs — whether private or public — at a cost (to date) of $666 billion. That’s a cost to taxpayers of $278,000 per job. In other words, the government could simply have cut a $100,000 check to everyone whose employment was allegedly made possible by the “stimulus,” and taxpayers would have come out $427 billion ahead. Furthermore, the council reports that, as of two quarters ago, the “stimulus” had added or saved just under 2.7 million jobs — or 288,000 more than it has now. In other words, over the past six months, the economy would have added or saved more jobs without the “stimulus” than it has with it. In comparison to how things would otherwise have been, the “stimulus” has been working in reverse over the past six months, causing the economy to shed jobs. [...] The actual employment numbers from the administration’s own Bureau of Labor Statistics show that the unemployment rate was 7.3 percent when the “stimulus” was being debated. It has since risen to 9.1 percent. Meanwhile, the national debt at the end of 2008, when Obama was poised to take office, was $9.986 trillion… It’s now $14.467 trillion — and counting.
UNEMPLOYMENT RATE Via Bureau of Labor Statistics – Unemployment Rate 2001 through 2011
OBAMA’S FAILED ECONOMIC RECORD Video

Obama’s Economic Record (Video)

OBAMA = HIGHER UNEMPLOYMENT, HIGHER DEBT, HIGHER GAS PRICES

OBAMA IS WRONG: ATMs and Automation Do NOT Cause High Unemployment (Video, Chart)

OBAMA – ANOTHER PROGRESSIVE WHO HATES PROGRESS Obama wants us to think that his high unemployment numbers are because our businesses are too efficient due to technology and automation. But in reality, companies are not hiring because of Obama’s anti-free-market and pro-union policies. Obama ignores that innovation and automation have increased worker productivity. Obama believes in the Automation Myth[1] — “the belief that increased productivity, efficiency, and technical innovation lead to net involuntary unemployment as well as other woes — is Marxist malarkey that won’t die…Whenever there is a long-continued mass unemployment, machines get the blame anew. This fallacy is still the basis of many labor union practices…” But facts prove them wrong.
	“There are some structural issues with our economy where a lot of businesses have learned to become much more efficient with a lot fewer workers. You see it when you go to a bank and you use an ATM, you don’t go to a bank teller, or you go to the airport and you’re using a kiosk instead of checking in at the gate.” Obama to NBC’s Ann Curry, June 14, 2011

AUTOMATION LEADS TO HIGHER EFFICIENCY, PRODUCTION, AND STANDARD OF LIVING[1]
	Companies strive to maximize output while minimizing inputs and that’s a good thing. (If only government did likewise.) We act similarly in our personal lives. This leads to the most efficient and economical outcomes, guiding scarce resources to where they are needed and valued most. Using an example of a coat manufacturer, Mr. Hazlitt [an economist and author][2] explains in detail the impact of technological improvements and labor-saving machinery. He writes of all eyes being focused on “Joe Smith,” who loses his job to the new machine. Forgotten are ” Tom Jones, who has just got a new job in making [or servicing] the new machine,” “Ted Brown, who has just got a job operating one, and Daisy Miller, who can now buy a coat for half what it used to cost her.” Overlooked too are the manufacturer’s higher profits, which are spent on new machines, invested in new businesses or lines of business, and/or consumed, each of which increases employment. [...] In short, the “real result of the machine is to increase production, to raise the standard of living, and to increase economic welfare” by lowering prices or raising wages or both.
MANUFACTURING WORKERS IN AMERICA KEEP GETTING MORE PRODUCTIVE [3]
	The chart above shows annual real manufacturing output per worker from 1947-2010 using data from the BEA[4] for manufacturing output by industry and data from the BLS on manufacturing employment. [...] Manufacturing workers in America keep getting more and more productive, which then allows us to produce more and more output over time, with fewer and fewer workers. That’s a great story about an American industry that is healthy, successful and thriving, and not an industry in decline. By continually increasing worker productivity and productive efficiency, the American manufacturing sector has been hugely successful at achieving one of the most important economic outcomes of being able to “produce more with less.” In the process, those efficiency and productivity gains have helped conserve scarce resources, including human resources, more effectively than almost any other industry, except maybe farming. It’s hard to overstate how much the efficiency gains achieved by U.S. manufacturing have contributed to the improvements in our standard of living by making manufactured goods more affordable over time. We should spend less time complaining about fewer workers in manufacturing, and more time celebrating the phenomenal gains in manufacturing worker productivity.
WHAT IF OTHER PRESIDENTS HAD COMPLAINED ABOUT INNOVATION[5]
	With no less justification – but with no more validity – any of [Obama's] predecessors might have issued complaints similar to [Obama]. Pres. Grant, for example, might have grumbled in 1873 about “some structural issues with our economy where a lot of businesses have learned to become much more efficient with a lot fewer workers. You see it when you go to a bank that uses a modern safe and so employs fewer armed guards than before, or when you travel on trains which, compared to stage coaches, transport many more passengers using fewer workers.” Or Pres. Nixon might have groused in 1973 about such labor-saving innovation: “You see it when you step into an automatic elevator that doesn’t require an elevator operator, or when you observe that polio vaccination keeps people alive and active without the aid of nurses and all those workers who were once usefully employed making iron-lung machines, crutches, and wheelchairs.”
ATMs BROUGHT EFFICIENCY AND CREATED JOBS IN THE ATM INDUSTRY. THERE ARE MORE BANK BRANCHES. TELLER JOBS ARE PREDICTED TO INCREASE 6%.[6]
	Aside from the myriad ways in which ATMs boost efficiency, liquidity, consumer spending (and don’t forget all of the jobs created for technicians and manufacturers of ATM machines), I’m not sure you can even blame a drop in bank teller jobs on bank machines. This is just a quick take, but just think about it for two seconds. The number of bank branches has soared[7] in recent years. Those branches need human tellers (and bank machines). That’s why the BLS predicted that teller jobs would grow about 6% from 2008 to 2018[8] (it predicted other banking jobs would grow as well)[9]. That estimate may be lower now because of the recession, but that’s the recession’s fault — i.e. in Obama’s political wheelhouse — and not because of the “structural” issues Obama’s trying to pass the blame off to.
SOURCES 1. K.E. Campbell, American Thinker, Obama and the Automation Myth, June 14, 2011 http://www.americanthinker.com/blog/2011/06/obama_and_the_automation_myth.html 2. Henry Hazlitt, Economics in One Lesson, 1946 Via The Foundation for Economic Education (FEE) http://www.fee.org/library/books/economics-in-one-lesson/#0.1_L8 3. Dr. Mark J. Perry, Professor of Economics and Finance – University of Michigan, Phenomenal Gains in Manufacturing Productivity, June 14, 2011 http://mjperry.blogspot.com/2011/06/phenomenal-gains-in-us-manufacturing.html 4. Bureau of Economic Analysis (BEA) – GDP by Industry Accounts (1947-2010) http://www.bea.gov/industry/gpotables/gpo_list.cfm?anon=954246&registered=0 5. Donald J. Boudreaux, Professor of Economics – George Mason University, Open Letter to Barack Obama, June 15, 2011, http://cafehayek.com/2011/06/open-letter-to-barack-obama.html 6. Jonah Goldberg, National Review, ATMs and Automation, June 14, 2011 http://www.nationalreview.com/corner/269632/atms-and-automation-jonah-goldberg 7. Ronna Larsen, Colliers International, The Skyrocketing Number of Bank Branches http://www.ctmt.com/pdfs/emergingDirections/BankBranchesSkyrocket.pdf 8. Bureau of Labor Statistics (BLS), Occupational Outlook Handbook, 2010-11 Edition, Tellers http://www.bls.gov/oco/ocos126.htm 9. Bureau of Labor Statistics (BLS), Career Guide to Industries, 2010-11 Edition, Banking, Occupation in the Industry, http://www.bls.gov/oco/cg/cgs027.htm#related

Another Economist Abandons Obama – They Know They Have Failed

THEY KNOW THEIR KEYNESIAN POLICIES ARE NOT WORKING The latest adviser to abandon Obama is Austan Goolsbee. Here is The Washington Times report:
	Goolsbee exit comes at tough time for Obama, economy By Dave Boyer -The Washington Times, June 7, 2011 The departure of President Obama’s chief economist comes as the administration’s nearly trillion-dollar recovery is losing steam and Mr. Obama admits lackluster job growth could become a trend. “Obviously we’re experiencing some headwinds,” Mr. Obama said Tuesday of a rise in unemployment to 9.1 percent in May. (…) But the advisers who helped Mr. Obama create that plan are leaving or already gone. Austan Goolsbee, chairman of the White House Council of Economic Advisers, announced Monday night that he is leaving his post soon to return to a teaching position at the University of Chicago. Former CEA chairwoman Christina Romer, former senior economic adviser Larry Summers and budget director Peter Orszag all departed last year. Jared Bernstein, economic adviser to Vice President Joseph R. Biden Jr., left last month. Also, the Hill newspaper reported that Mr. Obama has stopped receiving his daily economic briefings, which his aides once likened in importance to national security briefings. The president does hold regular meetings on the economy and receives a daily report on paper. Leadership at the Commerce Department is in flux, with outgoing Secretary Gary Locke headed for the ambassadorship to China and his replacement, John Bryson, facing a slow confirmation process in the Senate. The core of Mr. Obama’s remaining economic team is led by Treasury Secretary Timothy F. Geithner and Gene Sperling, head of the National Economic Council. Amid that turnover, employers added only 54,000 payroll jobs in May, the fewest in eight months. “This jobs report — which would be weak in any economy — comes at a particularly devastating time, when the labor market remains 6.9 million payroll jobs below where it was at the official start of the recession three years and five months ago,” said economist Heidi Shierholz of the Economic Policy Institute in her report on the data for May. …And Mr. Obama’s job approval numbers are falling with the bad economic reports. Unemployment in May for black workers was 16.2 percent, and 11.9 percent for Hispanics.
http://www.washingtontimes.com/news/2011/jun/7/goolsbee-exit-comes-tough-time-obama-economy/?page=all#pagebreak