Sunday, December 21, 2008

Promising Nothing

A couple of weeks ago, President elect Barack Obama announced that he was demanding that his economic team put together a program that would create or save 2.5 million jobs over two year period. The announced goal is essentially meaningless, as there is no way to measure whether it is reached. We have ways of capturing the number of jobs created, but there is no way of knowing how many jobs will have been spared elimination by any Obama program.

In spite of its emptiness, the promise must have sounded good to the focus groups, because the Washington Post reports that Mr. Obama has raised the stakes, promising to "create or preserve" 3 million jobs. The promise remains meaningless.

Speaking of news that does nothing more than repeat talking points: is anyone tired of the reporting that states as fact that there is universal agreement among economists, liberal and conservative, that massive federal spending is required to pull the country out of a recession. For example, the same Washington Post report simply states as fact that "liberal and conservative economists [are] calling on the government to spend $800 billion to $1.3 trillion to stanch the bleeding....." Really? Economists all along the political spectrum agree that the federal government should create new spending equal to almost 30 - 50% of what once was the entire fy2008 federal budget? I don't think so.

The Obama administration is obviously wanting to portray massive new spending as being universally agreed upon in order to marginalize anyone who disagrees with this massive enlargement of government. It is certainly true that a recession is not regarded as the right time to be a deficit hawk, but the notion that this kind of massive program is what is required is controversial, to say the least.

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