A Tale of Two Economies
8:19 AM
by Nick Stone of Drawnlines Politics
On Meet The Press, Joe Biden was challenged by David Gregory on the premise of the stimulus package (of which he is the czar, if you will) on two key points: 1) "Are the White House job numbers of '150,000 jobs created or saved' reliable or arbitrary?", and 2) "Wasn't the premise of the stimulus package to stop the economy from getting worse?" Two very important questions.
Biden responded that the model the WH is using has been used for decades, that nobody is disputing the model, and that Council of Economic Advisors (which is a White House organization, NOT an independent agency) created. Gregory quickly retorted that the model is highly in question. He added that Jared Bernstein, Biden's economic advisor, reported that the model could not adequately distinguish between a job saved and a job created and questioned the model's accuracy.
Gregory continued to say that the package was sold on the premise that it would keep unemployment at 8.5%, whereas unemployment now stands at 9.4% and continues to climb. The vice president again quickly retorted that the White House used accepted economic models and data available at the time of the stimulus pitch, and that the economy was simply worse off than previously estimated. Biden insisted that the economy is getting better despite jobs numbers, unemployment numbers, and housing numbers and estimated that in the next 100 days the White House may create as many as 600,000 jobs.
Perhaps the question should not be whether or not the White House was able, through its stimulus package, to "create or save" such and such arbitrary number of jobs, but rather that we should ask of ourselves what the cost has been per job created and whether or not a free market would ultimately have created or saved more jobs - or done so more cheaply.
While cruising down the interstate this morning, I was listening to NPR's Morning Edition as usual. One story I was listening to really lit me up from ear to ear and knocked out of the ballpark the point of American free enterprise and our spirit of innovation.
The story is about an ad agency in downtown Manhattan which is using out of the box concepts and leveraging the full potential of collaboration to find new, bold ideas on the cheap to navigate through the recession. The catch: few of the people at work at this agency are paid employees, and they're all happy to be there.
Of course, it could be argued that this is one small example and that not everyone is capable of finding or creating such innovations. Access to opportunity is of course key to success, but then necessity is the mother of all invention. But the reason I'm highlighting this story is to hone in on the idea that we Americans really do find our exceptionalism in these circumstances. It is in our markets and in our culture that the spirit of freedom and innovation are truly the candle lighting our way through both the good and the lean times.
It is not only noteworthy but tantamount to the context of the differences in direction to note three major points about the economic stimulus. One, economic stimulus has a long and disastrous history in most nations of the world. Two, the resulting unemployment numbers from the stimulus package turned out to be far worse than the numbers projected if we had absolutely zero economic stimulus. Three, the White House's own projections show that in a few years we would find ourselves in the same place whether or not we had the package as seen on this graph:
That is to say, we'd ultimately have the same unemployment numbers either way. The comparison neglects to say that we would have trillions upon trillions more dollars to spend on education, paying down our national debt, for national defense, healthcare reform and a host of other national priorities now finding themselves in limbo.
So as you watch the vice president on Meet the Press and consider the massive undertaking of the Economic Recovery Act and general realignment toward the public sector in our economy, I'm only asking that you compare the costs and benefits of Keynesian governomics and compare them to the examples of market innovation and self-correction. I'd ask you in your head and in your heart you really ask yourself what the is the most efficient answer to our long-term economic needs in the context of what it means to be American.
Even if after careful consideration you should come to the conclusion that more government regulation and investment is the answer to our future, you should be elated to find yourself on the same physical turf as the statue of liberty. It is after all only here in America where we have the latitude and encouragement to think for ourselves, to work for ourselves, and to decide for ourselves.
On Meet The Press, Joe Biden was challenged by David Gregory on the premise of the stimulus package (of which he is the czar, if you will) on two key points: 1) "Are the White House job numbers of '150,000 jobs created or saved' reliable or arbitrary?", and 2) "Wasn't the premise of the stimulus package to stop the economy from getting worse?" Two very important questions.
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Biden responded that the model the WH is using has been used for decades, that nobody is disputing the model, and that Council of Economic Advisors (which is a White House organization, NOT an independent agency) created. Gregory quickly retorted that the model is highly in question. He added that Jared Bernstein, Biden's economic advisor, reported that the model could not adequately distinguish between a job saved and a job created and questioned the model's accuracy.
Gregory continued to say that the package was sold on the premise that it would keep unemployment at 8.5%, whereas unemployment now stands at 9.4% and continues to climb. The vice president again quickly retorted that the White House used accepted economic models and data available at the time of the stimulus pitch, and that the economy was simply worse off than previously estimated. Biden insisted that the economy is getting better despite jobs numbers, unemployment numbers, and housing numbers and estimated that in the next 100 days the White House may create as many as 600,000 jobs.
Perhaps the question should not be whether or not the White House was able, through its stimulus package, to "create or save" such and such arbitrary number of jobs, but rather that we should ask of ourselves what the cost has been per job created and whether or not a free market would ultimately have created or saved more jobs - or done so more cheaply.
While cruising down the interstate this morning, I was listening to NPR's Morning Edition as usual. One story I was listening to really lit me up from ear to ear and knocked out of the ballpark the point of American free enterprise and our spirit of innovation.
The story is about an ad agency in downtown Manhattan which is using out of the box concepts and leveraging the full potential of collaboration to find new, bold ideas on the cheap to navigate through the recession. The catch: few of the people at work at this agency are paid employees, and they're all happy to be there.
Of course, it could be argued that this is one small example and that not everyone is capable of finding or creating such innovations. Access to opportunity is of course key to success, but then necessity is the mother of all invention. But the reason I'm highlighting this story is to hone in on the idea that we Americans really do find our exceptionalism in these circumstances. It is in our markets and in our culture that the spirit of freedom and innovation are truly the candle lighting our way through both the good and the lean times.
It is not only noteworthy but tantamount to the context of the differences in direction to note three major points about the economic stimulus. One, economic stimulus has a long and disastrous history in most nations of the world. Two, the resulting unemployment numbers from the stimulus package turned out to be far worse than the numbers projected if we had absolutely zero economic stimulus. Three, the White House's own projections show that in a few years we would find ourselves in the same place whether or not we had the package as seen on this graph:
That is to say, we'd ultimately have the same unemployment numbers either way. The comparison neglects to say that we would have trillions upon trillions more dollars to spend on education, paying down our national debt, for national defense, healthcare reform and a host of other national priorities now finding themselves in limbo.
So as you watch the vice president on Meet the Press and consider the massive undertaking of the Economic Recovery Act and general realignment toward the public sector in our economy, I'm only asking that you compare the costs and benefits of Keynesian governomics and compare them to the examples of market innovation and self-correction. I'd ask you in your head and in your heart you really ask yourself what the is the most efficient answer to our long-term economic needs in the context of what it means to be American.
Even if after careful consideration you should come to the conclusion that more government regulation and investment is the answer to our future, you should be elated to find yourself on the same physical turf as the statue of liberty. It is after all only here in America where we have the latitude and encouragement to think for ourselves, to work for ourselves, and to decide for ourselves.
Posted by Nick Stone
on 8:19 AM.
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