In January, President Obama said that $787 billion stimulus package was desperately necessary to prevent more Americans from losing their jobs.
“For every day we wait or point fingers or drag our feet, more Americans will lose their jobs,” Obama said at a speech in
To boost support for his stimulus, Obama’s economic team released a report that estimated unemployment wouldn’t rise above 8 percent with a stimulus package, according to Associated Press. Even without a stimulus, Obama’s team echoed the CBO claim that the economy would shed 3-4 million more jobs, reaching 9 percent unemployment by 2010.
Obama got his massive spending bill passed with a helping hand from the news media, but unemployment kept rising rapidly.
It soared to 8.9 percent in April – nearly a percentage point higher than Obama’s team projected. Bloomberg also reported May 31 that the rate was likely to surpass 9 percent in May 2009 for the first time in 25 years. Official May unemployment figures will be released this Friday, June 5, and are expected to hit 9.2 percent.
Rather than report these failed job numbers, the media have found the “silver lining” in the unemployment story.
On June 1, The Washington Post spun the projected loss of a half million jobs, saying, “Economists forecast that employers will have shed another 530,000 jobs and that the jobless rate will rise to 9.2 percent [in May], from 8.9 percent. Although those numbers are steep, they would provide ammunition for the glimmers-of-hope crowd.”
Similarly, when April data was released the first week of May, The New York Times, Washington Post, CBS “Early Show,” and NBC “Today Show” found the good news in the bad – the exact opposite of how they treated economic news under Bush.
Erica Hill of the “Early Show” actually asked MoneyWatch.com’s Jill Schlesinger to “give us the silver lining” of 539,000 jobs lost in April. That was on May 9, the same day a Times headline read: “At 8.9%, Unemployment Still Rises, but Pace Slows.” The first paragraph of that story included this optimistic assessment: “good news given the stomach-churning events of recent months.”
None of those reports mentioned that Obama’s stimulus package was supposed to prevent unemployment from rising so high.
In contrast, the press was consistently negative toward President George W. Bush on the issue of jobs. In October 2004, Dan Rather stressed the downside saying, “It’s the first net job loss on a President’s watch since Herbert Hoover during the Great Depression of the 1930s.” The nation’s unemployment rate stood at 5.4 percent that month.
To ‘Save or Create’ Jobs
Before Obama got his stimulus bill passed he claimed it would “create or save” three million to four million jobs. The New York Times reported on January 10 that those remarks were “his latest effort to sell” the stimulus proposal.
The idea of creating or saving jobs was quickly embraced by the news media, and they were still repeating it in May, despite an 8.9 percent unemployment rate.
The ABC “World News” anchor uncritically cited the President’s Council of Economic Advisers on May 11 saying, “a new report estimates the economic stimulus bill passed earlier this year will save or create 1.5 million jobs this year, but an 'Associated Press’ survey indicates few of those jobs will be created in communities with the highest unemployment rates.”
Two nights later, Gibson announced the White House claim that 150,000 jobs had already been “created or saved” thanks to the stimulus package. Again, he failed to mention still declining employment and ignored critics who say the create or save claim is flawed.
On May 28, NBC’s Lester Holt repeated administration claims that “150,000 jobs have been saved or created” since the stimulus was passed and Lisa Myers said, “federal money is stirring hope where there hasn’t been much.” Myers did manage a little skepticism, saying, “figuring out how many jobs are saved is an imprecise science.”
Harvard economist Greg Mankiw noted that it’s not only “imprecise,” but impossible. He called the term “an act of political genius,” in a blog entry on Feb. 19. “You can measure how many jobs are created between two points in time. But there is no way to measure how many jobs are saved. Even if things get much, much worse, the President can say that there would have been 4 million fewer jobs without the stimulus,” Mankiw wrote.
American’s for Tax Reform also pointed out Obama’s math problem on May 11 calling the concept “highly questionable.” That post, “1.9 Million Jobs Lost Under Obama – No Matter How You Slice it,” emphasized what many in the news media were busy ignoring: that the economy was still hemorrhaging thousands of jobs.
Steven J. Davis, an economics professor at
It was predictable that the media would cling to Obama’s terms for their employment stories since they helped secure passage for the stimulus bill in the first place. The Business & Media Institute found that ABC, CBS and NBC all favored pro-stimulus speakers by a 2-to-1 margin and that not a single one of the 250 economists from a Cato ad opposing the stimulus were interviewed on the networks. Pro-stimulus economists appeared in stories five times as often as critical economists.
Similarly, a Media Research Center Special Report: Cheerleaders for the Revolution explained that Obama’s first 100 days were treated largely to positive coverage from the network news media. The networks lavished good press on every major initiative of the administration, including the stimulus package and various bailouts.
The Problem with Assumptions …
Rosy assumptions weren’t only a part of the push for the stimulus package, they were written into Obama’s 2010 budget, according to Sen. Lindsey Graham and the Senate Budget Committee.
Graham was on “Meet the Press” March 8 when he called out the administration for “disingenuousness in this budget.”
“One, he assumes in his budget that unemployment will peak at 8.2 percent at the end of this year. Well, unemployment by everybody else’s estimation is going to be at 9 percent in 2010. He’s projecting GDP growth in the economy in 2009, ’10, ’11 that I think is wildly optimistic,” Graham said.
Host David Gregory asked, “Do you think they’ll fall short of their jobs [creation].” “Oh, absolutely,” Graham replied before Gregory could finish his sentence “creation or number of jobs saved?”
What would that mean? “[A] much bigger defecit [sic] than forecast. And that in turn will make it harder for Obama to pursue favored projects like education and healthcare reform and green energy,” according to a Money & Business blog on US News & World Report.
According to the Congressional Budget Office, that budget would already have increased the federal deficit by $1.4 trillion in 2010 and $4.4 trillion from 2010-2014.
Brian Riedl, a senior policy analyst for The Heritage Foundation, told the Business & Media Institute, “Higher unemployment will automatically increase the cost of unemployment insurance and will likely increase the cost of programs for food stamps. Also having fewer people in the workforce means fewer income tax collections and these effects will all combine to increase the budget deficit further.”