Wall Street Journal Debunks Wall Street Journal on Recovery Act
There's a new report out from the Congressional Budget Office (CBO) on the economic impact of the Recovery Act. I'll get to the findings in a second, but somebody over at the Wall St. Journal's editorial page has a whole lot of explaining to do.
Here what CBO found:
Between its inception in February of this year and the end of September, the American Recovery and Reinvestment Act has:
- Saved or Created up to 1.6 Million Jobs (midpoint estimate: 1.1 million)
- Added up to 3.2% to the Growth of Real GDP (midpoint estimate: 2.2%)
- Reduced the Unemployment Rate by as Much as 0.9 Percentage Points (midpoint estimate: 0.6 ppt)
Now, these numbers may look familiar to you... they're about what we and other analysts have been citing all along (e.g., see Tables seven and eight in this CEA report).
On the other hand, if you read the Wall St. Journal, these numbers will surprise you. Or, to be more precise, if you read the editorial page, you'll be in the dark. If you read the front page in today's WSJ, you'll learn the facts about the CBO report noted above in the context of an article that documents the importance of stimulus projects to construction workers. In fact, the article worries about jobs cuts once the stimulus fades.
So, how does this square with lines like these from Journal editorials?
"No matter how hard or imaginatively the administration spins, the reality is that the stimulus has been the economic bust that critics predicted it would be." –November 19, 2009
"…the largest obstacle to turning this recovery into a durable expansion is now the very 'stimulus' programs that were sold as a way to ensure recovery." –October 30, 2009
"We aren’t getting much bang for our $787 billion stimulus bucks." –November 25, 2009
"It's hard to imagine a more complete repudiation of Keynesian stimulus than the evidence of the last year’s job market." –November 7, 2009
"[The Recovery Act has not] made even the smallest dent in employment." –November 7, 2009
"The White House says the stimulus created as many as one million new jobs, but this is single-entry economic bookkeeping." –November 7, 2009
They don’t square at all, of course, because the editorial board is more interested in scoring political points by discrediting the Recovery Act's jobs impact than they are in reading their own paper’s reporting. And let's be clear: while the new CBO findings are a welcome addition, these facts have been out there for months, including from an earlier CBO report last March (their updated findings are actually slightly improved).
We're not asking for a free ride. We have and will continue to take great pains to provide information about the impact of the Recovery Act with more transparency than has ever been associated with a project of this magnitude. Editorialists have every right to use that information to evaluate the impact of the act and to suggest ways that its performance could be improved upon.
But I doubt you'll see that from the WSJ. Unless, that is, they start reading their own reporting.
Jared Bernstein is Chief Economist to Vice President Biden and Executive Director of the Middle Class Task Force
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