Another Dumbed Down White House Econ Lesson

Austin Goolsbee, Chairman of the White House Council of Economic Advisers appears in another, white board video at the White House web site,  this time talking down to us about jobs.  (Commentary on his first video is here.)

The purpose of Goolsbee’s presentation is to persuade us that the failure of the Obama stimulus to create the millions of jobs that were promised is actually success!

Goolsbee begins by reminding us that job losses began during the Bush administration and blaming unspecified “policies”:

In 2007 we had followed a series of policies that had neglected making the critical investments that we needed for for economy.

He doesn’t name or describe any policies or any specific “investments.”  Apparently all we need to know is that Bush policies were bad because they were Bush policies and Obama policies are good because his borrowing and spending is “investments for the economy.”

This chart was generated in Excel from the same Bureau of Labor Statistics data Goolsbee displayed on his hand drawn white board chart.   The red bars track private sector job gains and losses from September, 2007 to through January, 2009, Bush’s last month in office.  The Blue bars track private sector job losses and then gains from February, 2009 when the Obama stimulus was enacted, through September, 2010.

The chart is intended to back up Goolsbee’s partisan rhetoric by showing the enormous job losses in 2008 followed by gradually shrinking rates of job loss and finally small job gains in 2009 and 2010.

It’s not hard to understand why the administration now offers a chart tracking private sector jobs instead of this chart tracking all jobs, private and public sector, that it promoted until a few months ago. If Goolsbee had used the all-jobs chart he would have had to explain why the statistics went negative four months ago.

Since June state and local governments have swamped anemic private sector job gains by laying off  thousands of employees even though the Obama Administration borrowed and spent hundreds of billions of dollars on the promise of preserving those jobs.

Goolsbee’s chart starts where it does, in September of 2007 because his intent is to plant the perception that the disastrous last year of the Bush Administration was typical of his entire eight years.

He hopes you’ll forget that President Obama’s agenda of massive government borrowing, spending and intervention into the private sector is, after almost two years, a failure compared to the Bush record prior to 2008.

This next chart shows the 48 months of continuous job growth immediately preceding the first month in Goolsbee’s white board chart.

So far, Obama’s massive “stimulus,” the health care takeover, and the commitment to tax increases on investors and small businesses starting in January have resulted in a stagnating economy and net loss of 3.3 million jobs since the stimulus was enacted in February, 2009.

Our last chart compares promises with actual results.  In January of 2009 President Obama published a report to hype his stimulus or “recovery act,” putting in writing some of the extravagant promises he was making in speeches and interviews.  Perhaps the most emphatic was the promise that the stimulus would create 3,675,000 jobs in 22 months, from March, 2009 through the end of 2010.  This chart compares that promise with actual results over the past 19 months and with job growth during the first 22 months after the Bush tax cuts were enacted in 2003.

An unbiased citizen with an open mind would look at this data and call for “policies” that would replicate the 51 months of job growth, from mid 2003 through the end of 2007, while avoiding the causes of the financial crisis. But that would require:

  • Not enacting the tax increases Obama and the Democrats have planned for January.
  • Repealing ObamaCare.
  • Rolling back the draconian energy restrictions the Obama EPA is planning to impose on American businesses and consumers.
  • Closing down the government owned mortgage giants Fannie Mae and Freddie Mac whose malfeasance led to the financial crisis and the grinding recession.
  • Not borrowing and spending even more Trillions on so-called stimulus schemes.

This President flatly rejects any of these prescriptions because he is committed to “transforming this nation” to what he thinks it should be, a European style socialist state with an all-powerful central government.  He is quite willing to accept a flat or declining economy and permanent, high unemployment if that’s the price Americans must pay to implement his vision.

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