The Job Creation Two-step

Six months ago, Americans were told the $2 trillion dollar deficit would spark the economy and create new jobs. But jobs are not being created, though billions have been spent.

President Obama and Congressional leaders promised 3.5 million jobs would be created if the $787 billion dollar stimulus package was passed. Jobs would be saved by various multi-billion dollar bailouts. And, in Mid-May of 2009, the President's Council of Economic Advisors issued a report reinforcing the assertion that 1.5 million of these jobs would be created by 4th quarter of 2009.

Perhaps it's time for some new estimates and a dose of reality.

The Department of Labor reports that in May, non-farm payrolls fell by 345,000 jobs. But the government's flaky accounting, softening the job loss by adding 220,000 bogus jobs by making a birth/death adjustment, is even more troubling. The Labor department guessed how many jobs might have been created by companies too new or too small to participate in the survey. But this adjustment is only a wild guess and, most likely, a lot fewer than 220,000 new jobs were added by newly-created businesses last month. So, the real monthly job loss may be closer to 565,000. Ouch!

Optimists believe the job creation numbers can improve, with 250,000 stimulus jobs created each month from now through December. That's a lot of jobs. It's becoming increasingly obvious that the stimulus plan may not come close to creating that many new jobs. So senior leaders in Congress and the Administration are beginning to panic.

Clearly, the Administration knew they were unlikely to meet the goal of creating 3.5 million jobs when they changed their metrics and rhetoric to include the number of "saved" jobs as well as "created" jobs. Accurately measuring a "job saved" is almost impossible. And altering metrics, after realizing that the stimulus plan has troubles, is disingenuous.

Who remembers the President's own economic advisors' assertions that 1,085,355 jobs would be created for every $100 Billion of government stimulus spending, resulting in an average cost to taxpayers of approximately $92,000 for each new job created?

Recovery.gov reports that, as of May 30, 2009, federal agencies have spent approximately $43.7 billion. According to the Council's formula, American taxpayers should have seen approximately 473,000 jobs created. Instead, on average, a half million jobs have been lost each month, since the stimulus package was rammed through a dazed Congress.

Spinmeisters are struggling to put a positive slant on the bad news, saying the job loss was nowhere near as bad as it could have been, or, certainly, less bad than April's. Cold comfort when the interest on the $787 Billion dollar "stimulus" projects, such as saving the marsh rat, costs taxpayers millions in debt service each month, while billions in bailout money have been lost.

Don't believe me? The Obama Administration has spent, and lost, more taxpayer money trying to bailout GM than it spends annually on NASA. They spent more on a failed AIG strategy than it takes to run the entire State Department. And worse, unless the Administration and Congress get serious about the budget crisis, the annual debt service will exceed all line items in the President's budget, surpassing even DoD, within 6 years.

Even understanding what government-sector jobs are created by the stimulus is difficult. Many federal agencies have expediently updated their www.usajobs.gov entries, claiming that all of the jobs available, even those listed prior to the stimulus, are Recovery Act jobs.

If the Obama Administration follows its usual M.O., then the upcoming few weeks will see them in denial, doing the Washington two-step, redefining "jobs saved" or "jobs created". There will be a parsing of "jobs" versus "job hours" and what really constitutes an "FTE". They may even crank up the old fear-mongering machine, insisting another stimulus spending orgy is necessary.

What probably won't happen is an acknowledgement that, at least so far, the stimulus isn't working.

We haven't heard a lot from the Administration on the poor show surrounding their four month attempt at job creation. Hopefully, they'll stop the Washington two-step, and the current job numbers will serve as a wake-up call that the government's intrusion into business is the surest way to kill jobs, not create them.

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