Obama’s grade for job creation: F
Talk about make-work.
The Obama Administration claims it has created 640,329 jobs, as of Oct. 30. Critics have pointed out that this number, posted at the recovery.gov website, is manifestly phony, because thousands of jobs are claimed in Congressional districts that do not exist. But never mind. Assume for the moment it is correct.
The federal expenditures so far under the American Recovery and Reinvestment Act of 2009 are $237.6 billion. (This datum is likewise found at the recovery website, and was the total as of Nov. 27.) That comes to $371,059 per job created.
Economist Ed Yardeni, meanwhile, reports that payroll data show the average U.S. worker was being paid, in October, at an annual rate of $59,867. So, depending on how you look at it:
- The government wasted $5 for every $1 it put into a working person’s pocket, or
- For the same billions, the government could simply have written checks for a year’s wages to 4.0 million Americans, or six times as many as it actually benefited.
Of course, the jobs will presumably last longer than one year. But the Obama recovery plan has barely gotten started. Some $489.4 billion of the original budget remains unspent.
“Should Team Obama get some credit for the apparent improvement in the labor markets? I don’t think so,” Yardeni wrote to his research clients this morning, “especially given how much money has been spent to create or save so few jobs by their own admission.”
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Mr. Middleton,
A 5:1 ratio of dollar expended to dollar in salary is about right and in fact pretty good. The American Recovery and Reinvestment Act (ARRA) of 2009 funds “projects” not “jobs”. The idea is that roads, bridges, &c get built with this money. On Newhall Road in Santa Clarita California new asphalt is being poured with money from the ARRA. Most of the money is going to asphalt, road base, equipment rentals, and similar related costs. Additionally the contractors have overhead and have to make a profit. So after that, the remaining dollars go to salaries. Of course the city and the contractors already had some staff so there was no job creation there. However, let us assume, that some new jobs were created by this project. If in fact the salaries from these new jobs were if fact 20% of the entire ARRA portion of this project, that is actually quite impressive.
Yours is an interesting argument. However, I fail to see any significance in your reported evidence, because the government has always employed more people–at a higher salary cap–than any private enterprise. That’s bad enough, but now you want it to send checks to four million unemployed people? Just how does the government choose which people shall benefit from such largesse? It seems to me that you’re willing to throw the baby out with the bath water.
Last, how can anyone hold Obama culpable for the economy or its repair? It is private enterprise that has put us in a fix. Even Greenspan acknowledges that he no longer believes that entrepreneurs are honest men and women. We live in a mixed economy because men and women can’t be trusted. True Capitalism and a free market can exist only in a free society where men and women are virtuous. A mixed economy is the best of the worst, which means that Congress, not Obama, needs to pass laws that control the villains and the financial markets in our society.