Jobs created or saved by ARRA stimulus? Much of it was pure fiction

By David McElroy · September 27, 2011

The Obama administration has claimed that “stimulus” spending created or saved 300,000 to 400,000 jobs each quarter while its money was being doled out. Does anybody seriously believe that number? I don’t.

I was already a skeptic — to put it most politely — of such self-serving econometrics, but two things this week have made me even more skeptical.

First, a source who can’t be identified provided me with copies of documents that his company was required to fill out as a vendor on a contract that it was awarded by a school district. It was made clear to the company that it was expected to report that jobs created and saved, so that’s exactly what the report back to the district showed. Somewhere in the neighborhood of 20 workers had jobs only because of this project, according to the paperwork reported back to the federal government. In truth, nobody was hired just for the project. Nobody would have been fired if the project hadn’t come along.

The lie was just a formality to get a contract — so the school district could report the lie to the federal government and politicians could pretend to be creating and saving jobs. My source said it was clear to everyone in his industry that you were supposed to provide the paperwork and keep your mouth shut:

“This project was going to be built anyway, but the school district didn’t have to use local money to do it because this stimulus thing came along to pay for it instead. The district knew we weren’t creating jobs and we knew it, too, but it was in everybody’s interest to just give them the government the numbers they wanted and us and the school both got what they wanted. That was happening everywhere during that stimulus spending.”

The second piece of the puzzle comes from somewhere less anecdotal. The Mercatus Center at George Mason University just released a study based on extensive interviews with companies and their employees (as well as anonymous surveys inside the companies). You can read the introduction to the study here or download the PDF of the full study here.

The authors of the study concluded that the “stimulus” had very little effect, if any. You can hear George Mason economics professor Garett Jones talk about the study, its conclusions and its potential limitations on last week’s EconTalk podcast if you’d like the basic information without reading the full study.

I have no confidence in the theory behind Keynesian stimulus spending. I have no confidence in statistics reported by companies and government agencies with an incentive to lie. I have no confidence in politicians to seek the truth when the numbers on their reports say what they want them to say.

So what did that add up to? Well, unemployment is even higher now than what we were told ahead of time that the worst-case employment scenario was before the “stimulus” was passed. It doesn’t look good for Keynesian ideas after all this, does it?

Almost three years ago, NPR had a story that talked about Barack Obama giving Keynes’ ideas their first “real-world test.” If that was the test, isn’t it obvious that the ideas are flawed and don’t work? Isn’t it time to admit that the faith which the Keynesian-influenced economists have in their “stimulus” spending has nothing empirical behind it? Isn’t it time to consider an alternative — from the real free market school of thought?

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On a live awards show Sunday night, one man made a joke about a female celebrity. The husband of the celebrity was offended and hit the man who made the joke. Or maybe it was staged for entertainment. Who knows? Who cares? Social media is full of discussion — and even arguments — about this idiocy today. This baffles me. Let’s assume for a moment that the event happened as reported. People have been having such idiotic fights ever since there have been humans. Half the bars in the world see such brief dustups regularly. It simply doesn’t matter. The fact that so many people believe they need to talk about this — or even need to have opinions about it — is more evidence of the bizarre media brainwashing that convinces many to care passionately about brain-dead trivia. Your life will be happier and saner if you focus on yourself, your family and your friends, not on whatever scripted (or spontaneous) bilge that the media wants to pipe into your home.

I’m in the middle of migrating this website to new servers this week. This means you might encounter some unexpected behavior until I get all the bugs worked out. Clicking on my links (including this one) might cause your browser to give you the message that it’s a site without a current security certificate. It’s not actually unsafe, but there’s something which isn’t yet set up for the security certificate. I apologize for any such errors you might encounter while the process is going on. If you notice any problems with content which didn’t migrate properly, I would appreciate you letting me know the details at davidmcelroy@mac.com. Thanks for your patience.

I often wonder what animals think when they look at us and consider the society we’ve created. Yes, I know this is fanciful and unrealistic, but what if they could? Would they be astounded at how we treat each other? Would they be disgusted by the ugliness and pettiness which fill so many of our daily interactions? The truth is that I’m feeling pretty disgusted with humanity tonight. I made the mistake of reading some online interactions that I should have avoided — and it sickened me. The people involved appeared to be vile and stupid and arrogant. I wish I could pretend they’re a tiny minority, but I know better. It’s times such as this when I most need to escape much of “civilization” and disconnect from their world. If humans are going to be worthy of “ruling this planet,” we have a lot of growth to do. And I fear that growth is nowhere in sight. So my buddy Thomas, above, and all of his friends would be right to judge us harshly — and to think, “Why do you folks get to be in charge?”

I should have expected this, but I honestly didn’t. The article I wrote last week about disagreements over treatment for autistic children brought me angry emails. You could almost call it “hate mail.” Of the five emails about it so far, two have been to tell me that I’m wrong to even listen to critics of the most popular therapy for autistic children — and the other three tell me I’m wrong for not condemning the treatment as the “obvious” abuse it is. If you read the article, you know I didn’t take a position on the issue, because I simply don’t know enough to have an opinion. But by talking about the issue, I stepped into a heated controversy. The emails from the two sides convinced me of nothing. But they did give me even more empathy for the unfortunate parents who have to figure out for themselves where the truth lies for their children.

Have you ever had what you thought was a new idea — and then discovered that “old you” had the same idea years ago? I had that experience tonight. And it’s been wonderful. I came up with an idea tonight for a very short satirical film that would be a promotion for a fictitious college. The point is to make the college promote — as good things — everything which is actually terrible about most modern colleges. Then I remembered a fake college that I invented back when I was in college. I had created student recruitment brochures and various newsletters back then, so I decided to call my “new” college by the same name I’d invented years ago: Ochita College. As I searched my computer for any old material I might still have about Ochita from the past, I discovered an email I sent to someone in 2009 — outlining essentially the same idea which I came up with tonight. Since I didn’t remember writing that, it felt like magic. So my next film project just might be this one instead. If all goes well, you might soon see “Ochita College: Your Future Starts Here.” This should be fun.

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