The Media Fall for Phony 'Jobs' Claims

[bodypilot90 0]

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Mr. Fratto was a colleague of mine in the Bush administration, and as a senior member of the White House communications shop, he knows just how difficult it can be to deal with a press corps skeptical about presidential economic claims. It now appears, however, that Mr. Fratto's problem was that he simply lacked the magic words -- jobs "saved or created."

"Saved or created" has become the signature phrase for Barack Obama as he describes what his stimulus is doing for American jobs. His latest invocation came yesterday, when the president declared that the stimulus had already saved or created at least 150,000 American jobs -- and announced he was ramping up some of the stimulus spending so he could "save or create" an additional 600,000 jobs this summer. These numbers come in the context of an earlier Obama promise that his recovery plan will "save or create three to four million jobs over the next two years."
Of course, the inability to measure Mr. Obama's jobs formula is part of its attraction. Never mind that no one -- not the Labor Department, not the Treasury, not the Bureau of Labor Statistics -- actually measures "jobs saved." As the New York Times delicately reports, Mr. Obama's jobs claims are "based on macroeconomic estimates, not an actual counting of jobs." Nice work if you can get away with it.

And get away with it he has. However dubious it may be as an economic measure, as a political formula "save or create" allows the president to invoke numbers that convey an illusion of precision. Harvard economist and former Bush economic adviser Greg Mankiw calls it a "non-measurable metric." And on his blog, he acknowledges the political attraction.

"The expression 'create or save,' which has been used regularly by the President and his economic team, is an act of political genius," writes Mr. Mankiw. "You can measure how many jobs are created between two points in time. But there is no way to measure how many jobs are saved. Even if things get much, much worse, the President can say that there would have been 4 million fewer jobs without the stimulus."

Mr. Obama's comments yesterday are a perfect illustration of just such a claim. In the months since Congress approved the stimulus, our economy has lost nearly 1.6 million jobs and unemployment has hit 9.4%. Invoke the magic words, however, and -- presto! -- you have the president claiming he has "saved or created" 150,000 jobs. It all makes for a much nicer spin, and helps you forget this is the same team that only a few months ago promised us that passing the stimulus would prevent unemployment from rising over 8%.

It's not only former Bush staffers such as Messrs. Fratto and Mankiw who have noted the political convenience here. During a March hearing of the Senate Finance Committee, Chairman Max Baucus challenged Treasury Secretary Timothy Geithner on the formula.

"You created a situation where you cannot be wrong," said the Montana Democrat. "If the economy loses two million jobs over the next few years, you can say yes, but it would've lost 5.5 million jobs. If we create a million jobs, you can say, well, it would have lost 2.5 million jobs. You've given yourself complete leverage where you cannot be wrong, because you can take any scenario and make yourself look correct."

Now, something's wrong when the president invokes a formula that makes it impossible for him to be wrong and it goes largely unchallenged. It's true that almost any government spending will create some jobs and save others. But as Milton Friedman once pointed out, that doesn't tell you much: The government, after all, can create jobs by hiring people to dig holes and fill them in.

If the "saved or created" formula looks brilliant, it's only because Mr. Obama and his team are not being called on their claims. And don't expect much to change. So long as the news continues to repeat the administration's line that the stimulus has already "saved or created" 150,000 jobs over a time period when the U.S. economy suffered an overall job loss 10 times that number, the White House would be insane to give up a formula that allows them to spin job losses into jobs saved.

"You would think that any self-respecting White House press corps would show some of the same skepticism toward President Obama's jobs claims that they did toward President Bush's tax cuts," says Mr. Fratto. "But I'm still waiting."

[tkhayes 348]

well given the support for the stimulus package from both business and Congress itself - with all the doom and gloom predictions that were in place months ago if we did NOT support the stimulus package (including from the opposition parties) - then I guess it is Ok to claim that it appears to be working. At least to some degree.

The writer did not say the numbers were false, they just said no one has 'called him on it'

so the numbers are not necessarily false. But I also see his point. Actuarial types do these sorts of predictions all the time. If there are other actuarial types out there that can provide some different numbers, then i am sure they would have by now.

so if I say i am right and what I did was right, and no one can prove that I am wrong, I may not be 'right', but at the very least, I am 'not wrong'. does not sound so bad to me.

[Gawain 0]

I'm waiting for the President's supporters to start openly expressing their buyer's remorse. What do they have to be happy about: Iraq? Detainees? Tribunals? Lobbyists? Spending? Economy? ...and soon to be taxes and healthcare...

What do they have to be happy about? "respect" around the world? *L* The world is laughing at our "apology" tours and they are not yielding any meaningful results -- from NATO or anyone...

So I try and I scream and I beg and I sigh
Just to prove I'm alive, and it's alright
'Cause tonight there's a way I'll make light of my treacherous life
Make light!

[rushmc 23]

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I'm waiting for the President's supporters to start openly expressing their buyer's remorse. What do they have to be happy about: Iraq? Detainees? Tribunals? Lobbyists? Spending? Economy? ...and soon to be taxes and healthcare...

What do they have to be happy about? "respect" around the world? *L* The world is laughing at our "apology" tours and they are not yielding any meaningful results -- from NATO or anyone...

What I notice is the difference between media economic reports when bush was in office and now.

There would be good numbers on on un-employment but it seemed to be "worse than expected" . And now the horid numbers come out (numbers we were not going to reach if we passed the stimulus) and it is reported as "better than expected".

Ah the tingle running up and down their legs media.

They cant let fail what they created I guess.

"America will never be destroyed from the outside,
if we falter and lose our freedoms,
it will be because we destroyed ourselves."
Abraham Lincoln

[Lefty 0]

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I'm waiting for the President's supporters to start openly expressing their buyer's remorse. What do they have to be happy about: Iraq? Detainees? Tribunals? Lobbyists? Spending? Economy? ...and soon to be taxes and healthcare...

What do they have to be happy about? "respect" around the world? *L* The world is laughing at our "apology" tours and they are not yielding any meaningful results -- from NATO or anyone...

I'm betting on their hope (insert doe-eyed emoticon here) sustaining through his term. He's still got his American Idol-style celebrity status that got him elected and that won't diminish regardless of what he does or doesn't do.

Provoking a reaction isn't the same thing as saying something meaningful.
-Calvin

[jerryzflies 0]

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Now, something's wrong when the president invokes a formula that makes it impossible for him to be wrong and it goes largely unchallenged.

I guess they learned from the Bush administration's claims about preventing terrorist attacks.

If you can't fix it with a hammer, the problem's electrical.

[Beachbum 0]

And that 9.4% unemployment is skewed also, since there are many people who do not show up in that number due to the manner it's calculated. I saw (think it was on ABC) an estimate of closer to 15% if you included those who have used up their unemployment, are only able to find part time but want/need full time, folks who have just given up looking for the time being, etc. I know I've joined the ranks thanks to an entire IT staff being outsourced to India in April, but the way I understand it, because I have not applied for unemployment (so far!), I would not be counted toward the unemployment #s the feds release.

As long as you are happy with yourself ... who cares what the rest of the world thinks?

[billvon 3,031]

As Republicans throughout the US continue their fervent prayers - please, please, PLEASE let the USA fail at everything so we can blame Obama for it! Unfortunately the economy seems to not be continuing to slide, and despite some heartfelt prayers, there has thus far not been another 9/11. (Although you can always hope.)

On the plus side, the deficit is increasing incredibly rapidly, so you have something to be thankful for.

[kelpdiver 2]

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What I notice is the difference between media economic reports when bush was in office and now.

This isn't what you notice, it's what you (all) perceive. Selective reading will do that.

I've seen lots of talk about the nonverifiability of the jobs saved claim. And this sort of song and dance from the White House dates back a long long time, at least back to Reagan (as far back as I'm vaguely useful), who was the one that redefined as non unemployed those who exhausted their benefits.

The reality is that White House spin doesn't get people employed, and those that actually vote will tend to vote against the incumbent.

[mnealtx 0]

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well given the support for the stimulus package from both business and Congress itself - with all the doom and gloom predictions that were in place months ago if we did NOT support the stimulus package (including from the opposition parties) - then I guess it is Ok to claim that it appears to be working. At least to some degree.

O rly?

Mike
I love you, Shannon and Jim.
POPS 9708 , SCR 14706

[mnealtx 0]

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I saw (think it was on ABC) an estimate of closer to 15% if you included those who have used up their unemployment, are only able to find part time but want/need full time, folks who have just given up looking for the time being, etc.

You mean, like the numbers the media used for unemployment during 43's presidency?

Mike
I love you, Shannon and Jim.
POPS 9708 , SCR 14706

[kelpdiver 2]

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I saw (think it was on ABC) an estimate of closer to 15% if you included those who have used up their unemployment, are only able to find part time but want/need full time, folks who have just given up looking for the time being, etc.

You mean, like the numbers the media used for unemployment during 43's presidency?

nope - that started with Ronnie.

[lawrocket 3]

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I saw (think it was on ABC) an estimate of closer to 15% if you included those who have used up their unemployment, are only able to find part time but want/need full time, folks who have just given up looking for the time being, etc.

You mean, like the numbers the media used for unemployment during 43's presidency?

nope - that started with Ronnie.

Reagan ruined the humming economy we had under Carter.

My wife is hotter than your wife.

[TheBachelor 5]

Questioning the words of the Obamessiah? Bad boy. You haven't been drinking your Kool-Aid, have you?

There are battered women? I've been eating 'em plain all of these years...

[rushmc 23]

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As Republicans throughout the US continue their fervent prayers - please, please, PLEASE let the USA fail at everything so we can blame Obama for it! Unfortunately the economy seems to not be continuing to slide, and despite some heartfelt prayers, there has thus far not been another 9/11. (Although you can always hope.)

On the plus side, the deficit is increasing incredibly rapidly, so you have something to be thankful for.

We dont have to pray for anything. God Obama is doing just fine on his own

"America will never be destroyed from the outside,
if we falter and lose our freedoms,
it will be because we destroyed ourselves."
Abraham Lincoln

[rushmc 23]

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What I notice is the difference between media economic reports when bush was in office and now.

This isn't what you notice, it's what you (all) perceive. Selective reading will do that.

I've seen lots of talk about the nonverifiability of the jobs saved claim. And this sort of song and dance from the White House dates back a long long time, at least back to Reagan (as far back as I'm vaguely useful), who was the one that redefined as non unemployed those who exhausted their benefits.

The reality is that White House spin doesn't get people employed, and those that actually vote will tend to vote against the incumbent.

Hmm, White house does not get people empoyed.

Maybe you should do a little looking into the number of Obama White House employees compaired to any other admin. I think it does get people employed. If you take the time to look up numbers and employment, look up the number of Gov employees compared to the cities, towns and states they are working in.

You may then need to rethink the statement you make here....

"America will never be destroyed from the outside,
if we falter and lose our freedoms,
it will be because we destroyed ourselves."
Abraham Lincoln

[BIGUN 1,345]

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And that 9.4% unemployment is skewed also, since there are many people who do not show up in that number due to the manner it's calculated.

Where do the statistics come from?

Early each month, the Bureau of Labor Statistics (BLS) of the U.S. Department of Labor announces the total number of employed and unemployed persons in the United States for the previous month, along with many characteristics of such persons. These figures, particularly the unemployment rate—which tells you the percent of the labor force that is unemployed—receive wide coverage in the media.

Some people think that to get these figures on unemployment, the Government uses the number of persons filing claims for unemployment insurance (UI) benefits under State or Federal Government programs. But some people are still jobless when their benefits run out, and many more are not eligible at all or delay or never apply for benefits. So, quite clearly, UI information cannot be used as a source for complete information on the number of unemployed.

Other people think that the Government counts every unemployed person each month. To do this, every home in the country would have to be contacted—just as in the population census every 10 years. This procedure would cost way too much and take far too long. Besides, people would soon grow tired of having a census taker come to their homes every month, year after year, to ask about job-related activities.

Because unemployment insurance records relate only to persons who have applied for such benefits, and since it is impractical to actually count every unemployed person each month, the Government conducts a monthly sample survey called the Current Population Survey (CPS) to measure the extent of unemployment in the country. The CPS has been conducted in the United States every month since 1940, when it began as a Work Projects Administration project. It has been expanded and modified several times since then. For instance, beginning in 1994, the CPS estimates reflect the results of a major redesign of the survey. (For more information on the CPS redesign, see Chapter 1, "Labor Force Data Derived from the Current Population Survey," in the BLS Handbook of Methods.)

There are about 60,000 households in the sample for this survey. This translates into approximately 110,000 individuals, a large sample compared to public opinion surveys which usually cover fewer than 2,000 people. The CPS sample is selected so as to be representative of the entire population of the United States. In order to select the sample, all of the counties and county-equivalent cities in the country first are grouped into 2,025 geographic areas (sampling units). The Census Bureau then designs and selects a sample consisting of 824 of these geographic areas to represent each State and the District of Columbia. The sample is a State-based design and reflects urban and rural areas, different types of industrial and farming areas, and the major geographic divisions of each State. (For a detailed explanation of CPS sampling methodology, see Chapter 1, of the BLS Handbook of Methods.)

Every month, one-fourth of the households in the sample are changed, so that no household is interviewed more than 4 consecutive months. This practice avoids placing too heavy a burden on the households selected for the sample. After a household is interviewed for 4 consecutive months, it leaves the sample for 8 months, and then is again interviewed for the same 4 calendar months a year later, before leaving the sample for good. This procedure results in approximately 75 percent of the sample remaining the same from month to month and 50 percent from year to year.

Each month, 2,200 highly trained and experienced Census Bureau employees interview persons in the 60,000 sample households for information on the labor force activities (jobholding and jobseeking) or non-labor force status of the members of these households during the survey reference week (usually the week that includes the 12th of the month). At the time of the first enumeration of a household, the interviewer prepares a roster of the household members, including their personal characteristics (date of birth, sex, race, Hispanic ethnicity, marital status, educational attainment, veteran status, and so on) and their relationships to the person maintaining the household. This information, relating to all household members 15 years of age and over, is entered by the interviewers into laptop computers; at the end of each day's interviewing, the data collected are transmitted to the Census Bureau's central computer in Washington, D.C. (The labor force measures in the CPS pertain to individuals 16 years and over.) In addition, a portion of the sample is interviewed by phone through three central data collection facilities. (Prior to 1994, the interviews were conducted using a paper questionnaire that had to be mailed in by the interviewers each month.)

Each person is classified according to the activities he or she engaged in during the reference week. Then, the total numbers are "weighted," or adjusted to independent population estimates (based on updated decennial census results). The weighting takes into account the age, sex, race, Hispanic ethnicity, and State of residence of the person, so that these characteristics are reflected in the proper proportions in the final estimates.

A sample is not a total count, and the survey may not produce the same results that would be obtained from interviewing the entire population. But the chances are 90 out of 100 that the monthly estimate of unemployment from the sample is within about 290,000 of the figure obtainable from a total census. Since monthly unemployment totals have ranged between about 7 and 11 million in recent years, the possible error resulting from sampling is not large enough to distort the total unemployment picture.

Because these interviews are the basic source of data for total unemployment, information must be factual and correct. Respondents are never asked specifically if they are unemployed, nor are they given an opportunity to decide their own labor force status. Unless they already know how the Government defines unemployment, many of them may not be sure of their actual classification when the interview is completed.

Similarly, interviewers do not decide the respondents' labor force classification. They simply ask the questions in the prescribed way and record the answers. Based on information collected in the survey and definitions programmed into the computer, individuals are then classified as employed, unemployed, or not in the labor force.

All interviews must follow the same procedures to obtain comparable results. Because of the crucial role interviewers have in the household survey, a great amount of time and effort is spent maintaining the quality of their work. Interviewers are given intensive training, including classroom lectures, discussion, practice, observation, home-study materials, and on-the-job training. At least once a year, they attend day-long training and review sessions. Also, at least once a year, they are accompanied by a supervisor during a full day of interviewing to determine how well they carry out their assignments.

A selected number of households are reinterviewed each month to determine whether the information obtained in the first interview was correct. The information gained from these reinterviews is used to improve the entire training program.

http://www.bls.gov/cps/cps_htgm.htm

Nobody has time to listen; because they're desperately chasing the need of being heard.

[justinb138 0]

Kind of off-topic, but it takes 2,200 people to interview 60,000 in a month?

That averages out to about 28 interviews per person / per month, or a little over 1 a day. How long do these 'interviews' take?

[kelpdiver 2]

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The reality is that White House spin doesn't get people employed, and those that actually vote will tend to vote against the incumbent.

Hmm, White house does not get people empoyed.

Maybe you should do a little looking into the number of Obama White House employees compaired to any other admin. I think it does get people employed. If you take the time to look up numbers and employment, look up the number of Gov employees compared to the cities, towns and states they are working in.

You may then need to rethink the statement you make here....

Why?

You seemed to have missed a word when reading it.

[BIGUN 1,345]

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That averages out to about 28 interviews per person / per month, or a little over 1 a day. How long do these 'interviews' take?

About a day - It's in the article.

Nobody has time to listen; because they're desperately chasing the need of being heard.

[Beachbum 0]

Thanks for the info! I wonder why the media never mentions this, but keeps spouting things like the piece I saw on the news about how the #'s are inaccurate? Is it possible that this is just part of what makes up the numbers that are actually released to the public (I looked thru that site, but couldn't see anything about that)? The info on the page you linked even states that it doesn't count anyone unemployed for less than 15 weeks, so under that definition, I am not quite yet unemployed. Try telling that to my bank accounts!!

Personally, I don't really care about blame placement at this point. The fact is, we are experiencing hard times that were largely brought on by our government, and like it or not we have to rely on that same government to try to get us out of it. Sucks that the 2 parties (politicians AND public) insist on quibbling instead of working together to fix the mess. I certainly don't expect every aspect of the recovery plan to be successful. It's not like there are people out there with a lot of experience with this situation to call in for advice, so anything attempted is at best a calculated guess as to what will or won't work. With that in mind, yes, I expect more mistakes to be made. I can only hope that they get more right than they get wrong. Do I agree with the overall path so far? A resounding NO, but I'm sure as heck no economic expert, and I realize that I have to be a bit patient and at least wait to see if things improve, level off, or continue on the downslide before I draw any conclusions.

As long as you are happy with yourself ... who cares what the rest of the world thinks?

[jerryzflies 0]

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The fact is, we are experiencing hard times that were largely brought on by our government,

I don't think anyone of either party in the government forced investment banks to take the absurd risks that led to the current hard times, nor did they force GM and Chrysler to make bad decisions that led to their demise.

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and like it or not we have to rely on that same government to try to get us out of it.

Did you sleep through the elections last fall?

If you can't fix it with a hammer, the problem's electrical.

[kelpdiver 2]

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The fact is, we are experiencing hard times that were largely brought on by our government,

I don't think anyone of either party in the government forced investment banks to take the absurd risks that led to the current hard times, nor did they force GM and Chrysler to make bad decisions that led to their demise.

The very cheap money policy in the early part of the decade certainly contributed to the real estate bubble. And it encouraged risk taking to maintain the 'traditional' return rates.

[riddler 0]

I support Obama, but I agree that the language is troubling. At some point, it went from "creating" new jobs, to "saving or creating". That OR added a lot of ambiguity, IMO, and opened the door for a bit of cheating on the numbers.

But all of this is speculative, anyway. Why don't we wait until the actual timeline is up (June of 2011), and see how the job situation is then, instead of assuming the programs will fail, and the politicians will lie about it? I feel that the right wing hasn't even given Obama a chance (did anyone expect everything would be rosy after less than five months?), especially, considering they bear responsibility for bank deregulation, oil speculation loopholes and stark auto sales that started the whole financial meltdown.

I think things are slowly improving in nearly every sector (certainly not autos). Just look at home lending rates, which have gone from 4.8 to 5.5% in the last three weeks - if the mortgage crises was the beginning of the financial mess, then we may be able to say that improvements there may be the beginning of the recovery.

Trapped on the surface of a sphere. XKCD

[mnealtx 0]

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But all of this is speculative, anyway. Why don't we wait until the actual timeline is up (June of 2011), and see how the job situation is then, instead of assuming the programs will fail, and the politicians will lie about it?

Remind me again...where was your 'let's wait and see if it works' support of any of the last administration's programs?

As I recall, we HAD to have to stimulus to keep unemployment in check...unfortunately, it doesn't look like it has. (see attached)

Mike
I love you, Shannon and Jim.
POPS 9708 , SCR 14706