Wednesday's column by the paper's chief economics writer (and White House approved stimulus-supporter) David Leonhardt, "A Few Steps Short On Jobs." notes that U.S. unemployment still stands near 10 percent, with almost no private job growth in May. Leonhardt's solution? You got it: Another "stimulus" package.
In the face of near-united Republican opposition, top Democrats have decided that the political costs of aggressively pushing for more stimulus are too high. Any new bill will help only on the margins, and it will give Republicans another chance to blame Mr. Obama for the deficit, even though the current deficit is more of their own party's making. The Democrats may be right, too. We will never know, because we will never be able to re-run the 2010 election under a different set of circumstances.
Leonhardt's evidence for the success of the stimulus is pretty vague, and ignores the possibility of cheaper alternatives.
If there was any doubt that the government could put people to work, at least temporarily, last year's $787 billion stimulus program should have removed it.The bill passed in February 2009, when the economy was shedding more than 700,000 jobs a month, and it was greeted with considerable skepticism. Some economists went so far as to suggest it would hurt the economy. Michael Boskin, a Stanford professor and former aide to the first President Bush, wrote an opinion article in The Wall Street Journal on March 6, 2009, blaming Mr. Obama and his policies for the stock market's drop in previous weeks.Soon, though, job losses began shrinking. The details - a rebound in state spending, an increase in corporate investment and a spurt in home sales helped by tax credits - suggested that the stimulus bill was a major cause. The Congressional Budget Office and private research firms estimate that the bill has added on the order of 2.5 million jobs. Since Mr. Boskin's op-ed article appeared, stocks are up 56 percent.
Leonhardt admitted "Any additional stimulus would only increase the deficit" but hopes for it anyway, in part because there was little job growth in May (doesn't that buttress the argument that the original stimulus has failed?).
Despite all this, there is reason to think that more stimulus may finally be on the way. Last Friday's jobs report showed little private-sector job growth in May, which was a good reminder that recoveries from financial crises are usually rocky. The report has the potential to persuade Congress to expand the jobs bill passed by the House, which is now before the Senate.
....Will another half-million jobs make the economy feel strong again? No. Will the next round of stimulus be more popular than the last one? Probably not.Is it nonetheless the right thing to do? That's another question entirely.
The Heritage Foundation has a more jaded view: "Why Obama's Stimulus Failed."
In total the U.S. economy has now lost a net of 2.2 million jobs since President Barack Obama signed his stimulus bill, and his administration is now 7.2 million jobs short of what he promised his $862 billion stimulus would help create by 2010....Our nation's unemployment rate is hovering near 10% not because of record job losses, as Biden suggests, but because of record job non-creation. Private sector employers have gone on strike. Contrary to what the President's economic wizards and New York Times columnists believe, massive government deficit spending does not stimulate job creation.
It's not just a right-wing argument. Columbia University economist Jeffrey Sachs, a devoted Keynesian, admitted "the stimulus failed" on MSNBC's talk show "Morning Joe" on Monday.
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