The stimulus effect
How much unemployment can we blame on the Obama administration? Economist Rob Shapiro dug into some Bureau of Labor Statistics data and came back with the best numbers I’ve seen on the subject. He separated job losses into two buckets: Those that happened before the stimulus, which was Obama’s major effort to deal with joblessness, and those that happened after the stimulus.
From December 2007 to July 2009 – the last year of the Bush second term and the first six months of the Obama presidency, before his policies could affect the economy – private sector employment crashed from 115,574,000 jobs to 107,778,000 jobs. Employment continued to fall, however, for the next six months, reaching a low of 107,107,000 jobs in December of 2009. So, out of 8,467,000 private sector jobs lost in this dismal cycle, 7,796,000 of those jobs or 92 percent were lost on the Republicans’ watch or under the sway of their policies. Some 671,000 additional jobs were lost as the stimulus and other moves by the administration kicked in, but 630,000 jobs then came back in the following six months. The tally, to date: Mr. Obama can be held accountable for the net loss of 41,000 jobs (671,000 – 630,000), while the Republicans should be held responsible for the net losses of 7,796,000 jobs.
I agree with Klein – it’s difficult to lay all those job losses at the feet of the Bush administration. The collapse came quickly and no policy in the world could have staved it off in time. Then again, perhaps the administration should have seen it coming long before it got to that point.
Similarly, it’s hard to give the stimulus credit for all the jobs saved. The TARP program which bailed out the banks may be equally responsible for staunching the flow, however bad a taste it may have left in our collective mouths.
So what’s the counterpoint to this? The economy still hasn’t bounced back, for one. But is that because we’ve had too much stimulus or too little? Has the stimulus even had that much to do with employment numbers in the private sector? It certainly has in the public sector. I don’t think there’s an easy answer to any of this. Klein also points to Shapiro’s policy prescription:
First, create jobs by expanding an Administration initiative already in place: Deep cuts in the payroll tax for employers who expand their workforce. Second, shore-up the weak housing market and stabilize falling home prices with a long-overdue, new initiative: A loan program for homeowners with mortgages in trouble, modeled on federal student loans, to bring down foreclosure rates. Third, prepare tens of millions of Americans for the jobs the economy will begin to create once it’s back on track: Provide grants to community colleges to fund free computer training for any American adult who walks in and asks for it. And fourth, put in place some long-term deficit reduction to head off higher interest rates when the economy does begin to expand again.