Abdul Alhazred
21st June 2009, 05:38 AM
Saving Phantom Jobs (http://tcsdaily.com/article.aspx?id=061809A) (TCS)
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Since coming into office President Obama and the members of his administration have repeatedly justified government stimulus spending as "creating or saving" jobs. William McGurn wrote in The Wall Street Journal (June 9, 2009) that the President announced the stimulus has already "created or saved" 150,000 jobs, that an additional 600,000 jobs will be "created or saved" in the summer, and that as many as four million jobs will be "created or saved" in the next two years.
Mr. McGurn points out that the promise to "create or save" jobs is inherently specious because there is no way to determine how many jobs are "saved." Economists do not have a method for measuring the net number of jobs saved. No matter how bad unemployment levels get, administration officials can always say that even more jobs would have been lost without the stimulus.
The "created or saved" fallacy has not been lost on other astute observers. The Harvard economist Greg Mankiw calls it a "non-measurable metric" and perhaps facetiously refers to the administration's use of it as "an act of political genius." In March the Democratic Senator Max Baucus criticized Treasury Secretary Geithner for the "saved jobs" term because, as Baucus put it, "you can take any scenario and make yourself look correct."
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An example in economics of non- disprovability.
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Since coming into office President Obama and the members of his administration have repeatedly justified government stimulus spending as "creating or saving" jobs. William McGurn wrote in The Wall Street Journal (June 9, 2009) that the President announced the stimulus has already "created or saved" 150,000 jobs, that an additional 600,000 jobs will be "created or saved" in the summer, and that as many as four million jobs will be "created or saved" in the next two years.
Mr. McGurn points out that the promise to "create or save" jobs is inherently specious because there is no way to determine how many jobs are "saved." Economists do not have a method for measuring the net number of jobs saved. No matter how bad unemployment levels get, administration officials can always say that even more jobs would have been lost without the stimulus.
The "created or saved" fallacy has not been lost on other astute observers. The Harvard economist Greg Mankiw calls it a "non-measurable metric" and perhaps facetiously refers to the administration's use of it as "an act of political genius." In March the Democratic Senator Max Baucus criticized Treasury Secretary Geithner for the "saved jobs" term because, as Baucus put it, "you can take any scenario and make yourself look correct."
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An example in economics of non- disprovability.