Commentary Magazine


Topic: Marshall County

AP: Stimulus Is a Bust

The stimulus money to be spent on infrastructure really did nothing to save or create jobs. That’s not a conservative talking point; that’s the AP:

Ten months into President Barack Obama’s first economic stimulus plan, a surge in spending on roads and bridges has had no effect on local unemployment and only barely helped the beleaguered construction industry, an Associated Press analysis has found.

Spend a lot or spend nothing at all, it didn’t matter, the AP analysis showed: Local unemployment rates rose and fell regardless of how much stimulus money Washington poured out for transportation, raising questions about Obama’s argument that more road money would address an “urgent need to accelerate job growth.”

Obama wants a second stimulus, but what would be the point? (“AP’s analysis, which was reviewed by independent economists at five universities, showed that strategy hasn’t affected unemployment rates so far. And there’s concern it won’t work the second time.”) The reaction of economists is instructive:

“My bottom line is, I’d be skeptical about putting too much more money into a second stimulus until we’ve seen broader effects from the first stimulus,” said Aaron Jackson, a Bentley University economist who reviewed AP’s analysis.

Even within the construction industry, which stood to benefit most from transportation money, the AP’s analysis found there was nearly no connection between stimulus money and the number of construction workers hired or fired since Congress passed the recovery program. The effect was so small, one economist compared it to trying to move the Empire State Building by pushing against it.

Nor are business people impressed. (“‘The stimulus has not benefited the working-class people of Marshall County at all,’ said Isaac Zimmerle, a local contractor who has seen his construction business slowly dry up since 2008. That year, he built 30 homes. But prospects this year look grim.”) But politicians love this stuff. Despite ample evidence to the contrary, they continue to parrot the same rhetoric. Economic adviser Jared Bernstein insists, “When you invest in this kind of infrastructure, you’re creating good jobs for people who need them.” But not really.

What did we get for all this? Maybe some temporary jobs, especially in the public sector. But that’s a far cry from “creating” jobs. And we know by the unemployment figures that the Obami have been spectacularly unsuccessful in keeping unemployment to 8 percent, which they promised would be the result if Congress passed the stimulus plan. Maybe it’s time to stop repeating the same failed Keynesian policies and try something different. Lower taxes and fewer mandates on employers might be good for starters. But I think that’s not in the cards anytime soon. Well, not until the Democrats get really, really scared about the 2010 elections.

The stimulus money to be spent on infrastructure really did nothing to save or create jobs. That’s not a conservative talking point; that’s the AP:

Ten months into President Barack Obama’s first economic stimulus plan, a surge in spending on roads and bridges has had no effect on local unemployment and only barely helped the beleaguered construction industry, an Associated Press analysis has found.

Spend a lot or spend nothing at all, it didn’t matter, the AP analysis showed: Local unemployment rates rose and fell regardless of how much stimulus money Washington poured out for transportation, raising questions about Obama’s argument that more road money would address an “urgent need to accelerate job growth.”

Obama wants a second stimulus, but what would be the point? (“AP’s analysis, which was reviewed by independent economists at five universities, showed that strategy hasn’t affected unemployment rates so far. And there’s concern it won’t work the second time.”) The reaction of economists is instructive:

“My bottom line is, I’d be skeptical about putting too much more money into a second stimulus until we’ve seen broader effects from the first stimulus,” said Aaron Jackson, a Bentley University economist who reviewed AP’s analysis.

Even within the construction industry, which stood to benefit most from transportation money, the AP’s analysis found there was nearly no connection between stimulus money and the number of construction workers hired or fired since Congress passed the recovery program. The effect was so small, one economist compared it to trying to move the Empire State Building by pushing against it.

Nor are business people impressed. (“‘The stimulus has not benefited the working-class people of Marshall County at all,’ said Isaac Zimmerle, a local contractor who has seen his construction business slowly dry up since 2008. That year, he built 30 homes. But prospects this year look grim.”) But politicians love this stuff. Despite ample evidence to the contrary, they continue to parrot the same rhetoric. Economic adviser Jared Bernstein insists, “When you invest in this kind of infrastructure, you’re creating good jobs for people who need them.” But not really.

What did we get for all this? Maybe some temporary jobs, especially in the public sector. But that’s a far cry from “creating” jobs. And we know by the unemployment figures that the Obami have been spectacularly unsuccessful in keeping unemployment to 8 percent, which they promised would be the result if Congress passed the stimulus plan. Maybe it’s time to stop repeating the same failed Keynesian policies and try something different. Lower taxes and fewer mandates on employers might be good for starters. But I think that’s not in the cards anytime soon. Well, not until the Democrats get really, really scared about the 2010 elections.

Read Less