Why Obama Is Getting No Credit for the Stimulus

Clearly, if you talk to any nonpartisan economist, the stimulus did prevent the U.S. recession from turning into a full-blown depression. Moody’s, not exactly partisan, estimates it has added 1.6 to 1.8 million jobs so far and that its ultimate impact will be roughly 2.5 million jobs. The Congressional Budget Office, an independent agency, believes that estimate is conservative.

Yet the Obama White House gets no credit. Republicans are winning the war of the words, claiming it was a colossal waste of time. They are dissing it even as their own congressional districts benefit from the investment. And they are getting away with it.

Why?

Added jobs were jobs saved

When you look at the top four projects in terms of cost: they were education grants to the largest states in the nation: $4.4 billion to California, $2.2 billion to Texas, $1.65 billion to New York and $1.5 billion to Florida. That spending literally saved thousands of teaching jobs, especially in Florida (13,197 jobs were saved), New York (18,604 jobs were saved) and California (53,391 jobs were saved).

The Associated Pressreport was misleading

Last month,  The Associated Pressreported the “unemployment rate” was unchanged by the various spending projects of the stimulus package, without really clarifying the depth of the recession simply absorbed the progress.

"There seems to me to be very little evidence that it's making a difference," said Todd Steen, an economics professor at Michigan's Hope College who reviewed the AP analysis.

That criticism, in addition to Republican push-back, lit up the front pages of many newspapers across the country. Though while it is true, it was misleading. Once again, the costly education grants saved teaching jobs as opposed to creating new ones, so those teachers would not be reflected in unemployment data.

If you look at the fifth and sixth most expensive projects in the stimulus bill which were Department of Energy contracts in Richland, Wa. and Aikan, S.C., those contracts went to national companies.  The South Carolina contract was awarded to Savannah River Nuclear Solutions.

The workers needed for this massive nuclear site deactivation and cleanup are not necessarily coming from Aikan or South Carolina for that matter. Savannah River hired hundreds to do this work, but the workers came from across the country and from across various sectors, and they were in specialized fields -- some of whom were underemployed as opposed to unemployed. So once again, these jobs are not going to put a dent in local or statewide unemployment numbers which is how the AP analysis quantified the stimulus. Similar is true for the Richland, Wa. project.

The other measure they looked at was the construction sector. But here’s the problem with trying to analyze that: the majority of construction sector workers, especially commercial construction, are independent contractors. Most construction workers are not eligible for unemployment benefits and therefore they, too, are not counted in the unemployment rates.

Proving a negative

The other reason Obama's not getting any credit for salvaging our sinking economy is that it's difficult to prove a negative. A year ago, we were losing jobs at a record clip, hundreds of thousands by the month. Now, we are losing fewer, much fewer. But we are not yet adding jobs. So the White House is stuck with the message, “It could have been worse” as opposed to things are much better now.

“For President Barack Obama, whose poll numbers have dropped precipitously from around 65 percent to around 50 percent as Americans have become worried about government spending and health care reform, that should be good news... the fact that it's working should be a vindication,”  Massimo Calabresi wrote in Time magazine.