Wednesday, November 4, 2009

Lies, Damned Lies and Stimulus* Statistics

[UPDATES here and here]

When the White House announced last week (with a straight face) that the Stimulus* had "saved or created" exactly 640,239 jobs, most "mainstream" media outlets got out their official Hopenchange flatware and ate that raw data up.  And they did it despite the fact that the AP issued a report just a day earlier eviscerating the accuracy of the original Stimulus* jobs report.  But who can really blame the MSM?  I mean, this time, the White House said they had - wait for it - "triple checked" the numbers, so they had to be dead-on, right?


Since the release of the administration's latest jobs report, the reports of inaccuracy have come flying in from all over the nation.  And they are absolutely ridiculous.

First, we have the AP informing us today that stimulus*-caused salary raises were counted as "saved jobs":
President Barack Obama's economic recovery program saved 935 jobs at the Southwest Georgia Community Action Council, an impressive success story for the stimulus plan. Trouble is, only 508 people work there.

The Georgia nonprofit's inflated job count is among persisting errors in the government's latest effort to measure the effect of the $787 billion stimulus plan despite White House promises last week that the new data would undergo an "extensive review" to root out errors discovered in an earlier report.

About two-thirds of the 14,506 jobs claimed to be saved under one federal office, the Administration for Children and Families at Health and Human Services, actually weren't saved at all, according to a review of the latest data by The Associated Press. Instead, that figure includes more than 9,300 existing employees in hundreds of local agencies who received pay raises and benefits and whose jobs weren't saved....

The administration now acknowledges overcounting in the new numbers for the HHS program. Elizabeth Oxhorn, a spokeswoman for the White House recovery office, said the Obama administration was reviewing the Head Start data "to determine how and if it will be counted."

But officials defended the practice of counting raises as saved jobs.

"If I give you a raise, it is going to save a portion of your job," HHS spokesman Luis Rosero said.

The latest stimulus report, released Friday, significantly overstates the number of jobs spared with money from programs serving families and children, mostly the Head Start preschool program. The report shows hundreds of the programs used nearly $323 million to provide pay raises and other benefits to their existing employees....

Many Head Start programs around the country went further, counting everyone who received a raise as a job saved....

The Bergen County Community Action Program in Hackensack, N.J., noted the nearly $213,000 it received went to cover raises for existing staff only, but it also reported saving 85 jobs.

At Southwest Georgia Community Action Council in Moultrie, Ga., director Myrtis Mulkey-Ndawula said she followed the guidelines the Obama administration provided. She said she multiplied the 508 employees by 1.84 — the percentage pay raise they received — and came up with 935 jobs saved.

"I would say it's confusing at best," she said. "But we followed the instructions we were given."...

More than 250 other community agencies in the U.S. similarly reported saving jobs when using the money to give pay raises, to pay for training and continuing education, to extend employee work hours or to buy equipment, according to their spending reports.
I'll let it slide that government employees are getting raises while most of the private sector has experienced pay cuts, pay freezes or outright layoffs.  Instead, I ask you to take a moment to wrap your head around the last example provided: 508 employees got a Stimulus*-inspired raise of 1.84%.  Even assuming that this "pay raise = saved job" logic is correct (and it's obviously not) the "right" number of "saved jobs" would be 9.35 (508*.0184), not 935.  That's an overstatement of 100 times!  Hummina hummina.

Second, we have the Chicago Tribune reporting that the Illinois stimulus* cash saved more school district jobs than actually exist:
More than $4.7 million in federal stimulus aid so far has been funneled to schools in North Chicago, and state and federal officials say that money has saved the jobs of 473 teachers.

Problem is, the district employs only 290 teachers.

"That other number, I don't know where that came from," said Lauri Hakanen, superintendent of North Chicago Community Unit Schools District 187.

The Obama administration last week released the first round of data designed to underpin the worthiness of its economic stimulus plan, which so far has directed $1.25 billion to Illinois schools. That money has helped save or create 14,330 school jobs in the state, the administration claimed.

But those statistics, compiled initially by the Illinois State Board of Education, appear riddled with anomalies that raise questions about their validity, according to a Tribune analysis of district-by-district stimulus spending and other state data. Many local school officials were perplexed by the stimulus data attributed to their districts.

In the official report, Wilmette Public Schools District 39 was credited with 166 jobs saved by stimulus aid. Superintendent Raymond Lechner said the number should be zero.

At Dolton-Riverdale School District 148, stimulus funds were said to have saved the equivalent of 382 full-time teaching jobs -- 142 more than the district actually has.

A similar discrepancy was found in data for Kankakee School District 111, where the stimulus report logged the equivalent of 665 full-time jobs saved. "That's impossible," a top Kankakee school official said, adding that the entire payroll -- full and part time -- is 600 workers....

Statewide, districts reported using most of their stimulus funds to prevent layoffs, with the equivalent of just 222 full-time jobs added to payrolls....

It appears the state treasury -- not students or school districts -- was the prime beneficiary of the education stimulus jackpot in Illinois. In great measure, funds simply were used to replace general aid payments already owed to local districts by the state. That gave Gov. Pat Quinn breathing room in his struggle to rein in a whopping two-year budget deficit of more than $10 billion....

[O]fficials of several districts contacted by the Tribune insisted they never provided the state with the jobs numbers used in the official tabulation....
Some local school officials suggested that the jobs data sent to the state appeared to have been overcounted in the official tabulation....
Just a handful of the jobs were new, Rafferty said, and he warned that every position propped up by stimulus money would be in jeopardy when the program expires. "Unless there's a guarantee of continuation of (federal or state) money, the vast majority of these will be eliminated because there won't be local resources to fund them," he said.
Of course, this collapse of basic mathematics is even more troubling since our nation's teachers are the ones making the mistakes.  That travesty aside, I think the last paragraph is probably the most distressing part of the story: the few jobs that the Stimulus* actually did create aren't even self-sustaining.  They disappear unless more taxpayer cheese magically appears.  That kind of "job creation" is not a recipe for long-term economic growth.

Third, the Wall Street Journal has dug into the latest report and found that the data are overstated by, at a minimum, tens of thousands of jobs:
Recipients of the government grants and contracts appear to have made mistakes when estimating the number of jobs that have been saved or created, according to the Journal's review. Some recipients said they were confused by forms that asked how they spent the money....

Ed DeSeve, the senior adviser to President Barack Obama on implementation of the stimulus plan, said Tuesday in a statement responding to questions from the Journal that the administration knew the reports were not "100 percent accurate" but that the plan was supposed "to create jobs, not count them." He said that even the "approximate" total pointed to "tremendous progress."

"We are looking at both overcount reports and undercount reports, and continue to ask questions of recipients to try to fix errors," Mr. DeSeve said. "In the end, we think any adjustments to the direct jobs count will be modest as a percentage of the 640,000 jobs total, either raising it or lowering it slightly."...

Some colleges and universities counted every part-time student work-study position as a full-time job, according to their reports, which are published online at

And some low-income housing landlords whose decades-old contracts with the federal government were funded by the stimulus this year reported a total of 6,463 employees as having jobs linked to the stimulus package.

Most recipients of stimulus money are required to file quarterly reports on how they used it. The government published more than 150,000 such reports late last week. A preliminary review revealed dozens of recipients claiming to have created or saved at least one job with less than $2,000 in stimulus money, to a total of at least 3,300 jobs.

A Kentucky shoe-store owner claimed to have created or saved nine jobs with an $889.60 contract to supply work boots to the Army Corps of Engineers. The owner said he supplied nine pairs of boots and that the mistake arose from confusion over the government form.

In addition, as many as 86% of the jobs estimated by recipients of Head Start grants could have been inaccurately reported, according to the Department of Health and Human Services. The department said 277 of the 1,601 reports it had received were being reviewed after being contacted by the Journal. Those reports claimed 7,753 jobs created or saved out of a total of 8,997 reported.

"Holy moly, that's not right," Teresa Cox, executive director of the Mid-Willamette Valley Community Action Agency in Salem, Ore., said of her organization's report. It indicated that 205 jobs were created or saved with the agency's $397,761 federal grant. The money, she said, was used for pay raises.

Ms. Cox said her agency thought it was supposed to report the number of employees affected by the stimulus money. "And the only way to do that was to create new jobs or retain jobs."

An HHS spokesman, Luis Rosero, said the department had told recipients to report only fractions of a job if the money was being used for bonuses or raises.

Stetson University in DeLand, Fla., counted every part-time work-study position funded by the stimulus, and, in some cases, more than one work-study position held by the same student. That led to the university reporting that it had created or saved 483 jobs with a $193,469 grant for its work-study program.

University spokeswoman Cindi Brownfield said the campus has since realized that the actual jobs number should have been written as the full-time equivalent of the jobs -- probably between 18 and 30.
Holy moly is right, Ms. Cox.  Holy frickin' moly.

And you just gotta love Mr. DeSeve's classic bureaucrat blowoff of "Whatever, dude, it's only billions of unaccounted-for taxpayer dollars.  Not my problem."  Totally, man.

But hey, look, maybe we also shouldn't blame the people who reported the worthless data.  According USA Today (check out Maxine Waters' awesome "look of utter exasperation"), some government subagencies that have accepted hundreds of millions in Stimulus* funds are totally and utterly incapable of accounting for the funds and disbursing them properly.  So cut them some slack: it's not their fault that they don't understand percentages!  Fractions are hard!

And yet, these are the same people - the same architects, advisers, bureacrats and government employees - who are demanding that we trust them with reorganizing and controlling the entire American healthcare system (one-sixth of the whole US economy).

I don't know about you, but I wouldn't even trust them with 1.84 percent of it.

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