The "Stimulus" Picture Crumbled
On December 22, the networks calmly, briefly, and quietly acknowledged the news that the government revised its economic-growth number for the third quarter downward, from 3.5 percent to a less impressive 2.2 percent. As 2009 comes to a close, the media elite are showing enormous patience with the pace of a recovery, without any troublesome talk of whether Barack Obama's dramatic expansion of government is helping or hurting the economy.
Back in 2004, when unemployment was 5.4 percent instead of the present-day 10 percent, these same networks were comparing George W. Bush to Herbert Hoover. The government announced 250,000 new jobs were created, but the anchormen talked incessantly about how Bush was losing unemployed voters in Ohio. The Business and Media Institute found 77 percent of reports on economic indicators on ABC, CBS, CNN, and NBC (as well as The New York Times and The Washington Post) were negative that summer.
The economy can no longer be blamed on Bush. Obama has shaped it with his fiscal policies. He owns it. So when wil his allies in the press ever acknowledge that the "jobs program" is a fiasco, and that Team Obama failed to match its own hyperbole on what the "stimulus" would accomplish?
Words mean something. Before he was even in office in January, Obama's economic advisers Christina Romer and Jared Bernstein issued a report on the economic situation. If nothing was done, they claimed, the unemployment rate would keep rising, reaching 9 per cent in early 2010. But if the nation embarked on a fiscal stimulus of $787 billion, the unemployment rate was predicted to stay under 8 percent.
So the Congress passed this massive spending plan, but instead, unemployment rose above the danger zone that these Obama advisers predicted if the spending plan did not pass. But you didn't see Katie Couric, Charlie Gibson, and Brian Williams pointing accusatory fingers at the White House economists for their utterly incorrect projections. It's as if they have their fingers crossed - hoping, hoping things somehow improve.
Worse yet, in December the president announced his support for a second "stimulus," sneakily taking $150 billion in unused TARP funds for preserving the banks and pouring it down a liberal "recovery" rathole. When at first you make a fiasco, try, try again?
When will the media acknowledge what they ought to be able to deduce from the ossified economies of Western Europe, never mind the pulverized economies of Eastern Europe? Yes, government can save government jobs - as Obama's "stimulus" was broadly spent in preserving positions for schoolteachers, public librarians, and employees at community health clinics - but it can't create and maintain private-sector jobs, or force the private sector to create and maintain jobs.
Christina Romer, who became the chair of Obama's Council of Economic Advisers, estimated that increased government spending would add $1.57 to GDP for every $1 spent, while $1 of tax cuts would add only 99 cents. But a vigilant media would have noticed what economist Greg Mankiw did: that Romer wrote a paper with her husband David in 2007 that found that each dollar of tax cuts has historically raised GDP by about $3 - three times Romer's new estimate.
Harvard economists Alberto Alesina and Silvia Ardagna recently conducted a comprehensive analysis for the National Bureau of Economic Research. They looked at large changes in fiscal policy in 21 nations in the Organization for Economic Cooperation and Development. They identified 91 episodes since 1970 in which policy moved to stimulate the economy. They then compared the interventions that succeeded with robust growth, and those that failed to deliver.
The results were crystal clear. Successful stimulus depended almost entirely on cuts in business and income taxes. Failed stimulus occurs mostly with a strategy of increases in government spending.
Is it really rocket science to suggest businesses will not go on a hiring binge when the liberal agenda in Washington - on health care, "cap and trade," and other tax-spend-and-regulate plans - creates so much heartburn about whether businesses can make a profit? The word "profit" is almost an obscenity in the hallways of Team Obama. It's suggested that the times are too hard for business to seek profits now - which guarantees more months of stagnant employment ahead.
Through it all, the media seem willing to extend to the administration the benefit of every doubt and the blanket assumption that every socialist premise is almost drowning in compassion - even as the hard times continue.
Ronald Reagan's economic recovery program generated the greatest peacetime expansion in history. That is fact. To this day, the "news" media report it as a failure. Obama's economic program thus far has been a disaster. That is fact. To this day, the "news" media "report" it as a "recovery." George Orwell would be proud.