Times Lead Story: Economists Say Stimulus Is Working, Dems Jump for Joy
Jackie Calmes and Michael Cooper's lead story on Saturday put a happy face on the stimulus package - but also hinted that another one might be necessary to put the economy back into the black: "New Consensus Views Stimulus As Worth Step - Talk Of A 2nd Infusion - Unemployment Figures and Increase in Debt Sway Economists."
Revealingly, Democrats loved the Times story (hat tip to MRC's Seton Motley), suggesting it was, in the words of National Journal, "a landscape-altering moment" which "gives their party a chance to reclaim the initiative on an issue that, so far, has worked in the GOP's favor."
Indeed, Friday's Gallup daily tracking poll fixed Obama's approval rating at 48% and his disapproval at 44%, his lowest rating ever.
Saturday's story may be an outgrowth of an October 22 Calmes story in which she claimed:
Ms. Pelosi said Democrats would not have another big stimulus bill but instead a series of smaller ones. That reflects their sensitivity to the fact that a single bill would carry a bigger price tag and to Republicans' criticisms that the first stimulus package has been a failure, a claim that most economists, including those at the Capitol meeting, reject.
On Saturday, Calmes and Cooper craftily positioned Obama's big-spending stimulus package in the center, between sniping economists on both the right and the left, and even suggest a second infusion may be needed (while also claiming the initial plan is working):
Now that unemployment has topped 10 percent, some liberal-leaning economists see confirmation of their warnings that the $787 billion stimulus package President Obama signed into law last February was way too small. The economy needs a second big infusion, they say.
No, some conservative-leaning economists counter, we were right: The package has been wasteful, ineffectual and even harmful to the extent that it adds to the nation's debt and crowds out private-sector borrowing.
These long-running arguments have flared now that the White House and Congressional leaders are talking about a new "jobs bill." But with roughly a quarter of the stimulus money out the door after nine months, the accumulation of hard data and real-life experience has allowed more dispassionate analysts to reach a consensus that the stimulus package, messy as it is, is working.
The legislation, a variety of economists say, is helping an economy in free fall a year ago to grow again and shed fewer jobs than it otherwise would. Mr. Obama's promise to "save or create" about 3.5 million jobs by the end of 2010 is roughly on track, though far more jobs are being saved than created, especially among states and cities using their money to avoid cutting teachers, police officers and other workers.
But there are criticisms, mainly that the Obama team relied last winter on overly optimistic economic assumptions and oversold the job-creating benefits of the stimulus package.
Optimistic assumptions in turn contributed to producing a package that if anything is too small, analysts say. "The economy was weaker than we thought at the time, so maybe in retrospect we could have used a little bit more and little bit more front-loaded," said Joel Prakken, chairman of Macroeconomic Advisers, another financial analysis group, in St. Louis.
The Times didn't mention the error-riddled attempts by the Obama administration to track the effectiveness of the stimulus package, such as the recovery.gov web site showing millions in stimulus money going to congressional districts that, um, don't actually exist.
Deep into the story the reporters brought up Obama's original optimistic claims that unemployment would peak at around 8 percent, chiding that it's something "Republicans constantly recall" to use against Obama:
Politically, however, the president is saddled with his original claim that, with the stimulus, the jobless rate would peak at 8.1 percent - a miscalculation that Republicans constantly recall. While the administration has said its economic assumptions were in line with private forecasts, most of which also underestimated the recession's punch, it was more optimistic than most.
Calmes and Cooper even prefer food stamps to tax cuts as an economic revival plan, citing one study:
Even more effective are increases for food stamps ($1.74) and unemployment checks ($1.61), because recipients quickly spend their benefits on goods and services.
By contrast, most temporary tax cuts cost more than the stimulus they provide, according to research by Moody's.
Near the end, the Times dropped all qualifiers and simply stated starkly what all economists apparently think: Republican ideas are mistaken.
Economists said Republicans' recent proposals to rescind unspent money would be a mistake.