Showing posts with label Fuzzy Math. Show all posts
Showing posts with label Fuzzy Math. Show all posts

Wednesday, March 3, 2010

Protectionist Campaigning for Dummies, pt. 3

My blog post yesterday rebutting an anonymous congressional staffer's factual misrepresentations about NAFTA, free trade and US manufacturing elicited an immediate reply from the anonymous staffer himself - Mr. Brian (aka "Researcher") Martin, policy director for Congressman Gene Taylor (D-MS).  I promised Brian this morning that I'd reply to his new comment tonight, and that's what I'll be doing here.  Brian's reply is lengthy, so I am not going to paste it below.  But if you'd like to see the comment in all its glory, you can view it in the comments section of the aforementioned blog entry.

First and foremost, I'd like to thank Brian for commenting here.  While I'm quite sure that it wasn't his intent, Brian's comments have allowed me to focus some disparate themes that have been floating around my blog since its inception.  Last night, I focused on some of the most prevalent myths propagated by protectionists - US manufacturing decline, trade and manufacturing jobs, and trade and national security - and systematically debunked each of them.  Judging by the nice response I've received, I think I did a pretty decent job.  Tonight, however, I'd like to take a slightly different approach and focus on the many standard rhetorical devices that protectionists use, especially in American politics, to win arguments about free trade.  Such focus, I think, is important because, as Americans' continuing trade suspicions and the many protectionist policies in place make clear, such political tactics have proven very, very successful for the anti-traders.  Well, just my luck, Brian's comment from last night stands as a fantastic example of how such rhetorical tricks are used in practice.  And, quite honestly, after a quick re-read of Brian's comment tonight, I realized that my approach here is quite necessary because a direct and substantive rebuttal of his main claims would simply rehash 99% of yesterday's blog post.  And where's the fun in that?

So here we go.  In all, I found five common rhetorical tricks used by Brian to justify his protectionist position (which, I think, still remains the dissolution of NAFTA and other US free trade agreements).

Trick #1: The ad hominem attack.  The protectionist knows that, because free trade is almost universally supported by economists and economic historians worldwide, the free trader will come armed with boatloads of great data and historical evidence supporting his claim.  By contrast, the protectionist will have only a few datapoints, so he often seeks to discredit his opponent's arguments and data by simply calling the opponent bad names (don't laugh: this approach is often successful).  Case in point: while my blog entry (and many others like it) presented a ton of historical evidence undermining Brian's original protectionist myths, Brian's response cited very little such evidence and instead attacked me personally.  Indeed, if you didn't know me and were only judging me by Brian's comment, you'd very likely think that I woke up every morning on a mountain of money, drove to work in my Bentley and spent my days at the office dressed like the monopoly man and conspiring with my fellow "smug elitist investment banker/lawyer" buddies about how we can create the next big "investment bubbles" while simultaneously oppressing America's working poor (whom I "know nothing about and obviously care nothing about.")

Now, normally, I'd leave this nonsense be and just move on to the next rhetorical trick, but as my workday dragged on today Brian's mischaracterizations really ate at me.  Why?  Well, because if Brian did know me, he probably wouldn't have tried the "fat-cat" ad hominem attack (even though it's quite en vogue these days among the demagogues).  He probably would have known that I don't come from privilege, that I've worked a job every year of my life since I was 15 - several of which for minimum wage right beside the people I supposedly "care nothing about," that my first job out of college paid $200/week, that I paid my way through college and law school with part-time jobs, student loans and credit card debt (which literally leveraged me to the brink), and that I didn't do all that just so I could someday become a heartless "investment lawyer" (whatever that is) out to "make millions of dollars from [poor workers'] suffering."  And, sure, all of my work and debt paid off, and I'm doing well now, but come on, Brian: do you really think that a guy like me - a guy who has schlepped dirty ice skates, cleaned bathrooms, sold women's shoes(!) and literally been so cash-strapped that he ate one meal per day (double quarter pounder extra value meal) to stretch his budget - is really trying to advocate policies that would undermine the US economy and destroy America's working poor?  Hardly.  The fact is that I do what I do - and blog here - because I've seen first hand just how helpful free trade is for those working poor, and just how cynical, manipulative, political and pernicious protectionists and their policies can be.

Trick #2: Seizing the moral high ground.  As I've already made clear in discussing trick #1, protectionists just love to claim that their protectionism has moral backing, while dirty free traders like me are heartless souls who are just out to make a buck (see, e.g., Edwards, John).  Brian claims to speak for Mississippi's working class and he apparently knows what's best for them - including the fact that not all of them "can or should become software engineers, investment bankers, or investment lawyers."  Brian also assigns an odd sort of moral superiority to manufacturing over services, and casts me as just out to create a nation of unemployed workers and underemployed hamburger-flippers.  Of course, nothing could be further from the truth.  In fact, the greatest case for free trade is a moral one.  As I said a few weeks ago:

[Free trade] is rooted in some of the very ideals upon which the United States was founded: the pursuit of life, liberty, and happiness, and the rule of law. Every American should be free to transact with whomever he wishes to transact, regardless of the nationality or location of the other party. Voluntary exchange is inherently fair, benefits both parties, and allocates scarce resources more efficiently than a system under which government dictates or limits choices. Individuals deciding for themselves how and with whom to conduct commerce will advance their own well-being, and thus the nation’s, far more efficiently than would some centralized authority that tries to influence private decisions by tipping the scales.

Furthermore, government intervention in voluntary economic exchange on behalf of some citizens at the expense of others is inherently unfair, inefficient, and subverts the rule of law. Instead of individuals seeking to optimize their conditions subject to the rules, they are incentivized to divert resources from productive endeavors to changing the rules to their advantage through politics and backroom dealmaking.

Alas, this very sound and simple justification for free trade has been distorted over the years by groups seeking to tip the scales in their favor. They mischaracterize trade in the ancient but false dichotomy of the haves versus the have-nots. Evil corporations, they say, benefit from trade while regular people suffer its wrath. The public is told that companies like Wal-Mart profit from trade, but that the vast benefits afforded Americans who shop at Wal-Mart—benefits like more-affordable clothing, food, and other everyday products—count for nothing. The public is told that trade enriches the Chinese government, but that the benefits to U.S. manufacturers and their workers from record export sales to Chinese customers over the past few years are meaningless. In the political realm, trade is never about individuals acting in their own best interest by transacting with whom they choose to transact. Instead, trade is a zero-sum game featuring the collective “Us” versus the collective “Them,” and “they” are gunning for “our” jobs and wealth using underhanded tactics.
 I think that sums up Brian's attempted moral superiority pretty perfectly, so I'm just going to leave it at that.

Trick #3: claiming that correlation is causation.  Protectionists routinely find causation where only correlation actually exists.  They do this by blaming imports and free trade for concurrent problems and events that actually have little or nothing to do with trade.  In Brian's case, he tries to convince us that free trade and FTAs like NAFTA are to blame for the manufacturing job losses across the country and in Mississippi all because NAFTA began at that time, or because imports or the trade deficit increased over the same period.  Indeed, Brian claims that "Mississippi has lost 40% of its manufacturing jobs since 1994" when NAFTA began, and even though he acknowledges "Nissan opening a plant in the state" since then, he wants us all to desperately believe that free trade (and NAFTA in particular) - not productivity gains, technology or changing consumer tastes - caused all of those job losses.  Of course, after I've clearly demonstrated that imports, trade deficits (which Brian again brings up in his reply), total trade and FTAs have nothing to do with manufacturing job losses, and that developing and developed countries around the world are losing manufacturing jobs, Brian's "causation" mirage falls apart. 

As an aside, perhaps one of the best examples of the "causation-correlation" trick comes from the 2008 presidential campaign when the Obama-Biden team accused John McCain of supporting free trade policies that, they asserted, shut down a Corning plant in Pennsylvania and eliminated the jobs of hundreds of local manufacturing workers.  The reality, however, was far different.  As FactCheck.org wrote back in 2008, the Corning plant actually made cathode ray tubes (CRTs) for old-school TVs that weren't being made anymore.  Thus, it was technology and consumer preference that eliminated those jobs, not free trade agreements or a rising trade deficit.  But you can't attack someone for supporting flat-screen TVs, so.... (Of course, we all know who won that election, so I'm certainly not saying that such garbage isn't effective.)

Trick #4: Schmaltzy anecdotes as surrogates for, and superior to, hard data.  Because protectionists only have a few datapoints - manufacturing job losses, the trade deficit, etc. - to support their policies, they resort to a lot of anecdotes, and Brian's reply is no exception.  After laying out his one stat - a 40% decrease in Mississippi manufacturing jobs - Brian then proceeds to "prove" how bad trade is by citing to random anecdotes about problems in Mississippi (disappearing rail lines, depressed wages, etc.) and elsewhere (military procurement), without a shred of supporting evidence of the problems' actual prevalence or their relationship to free trade.  Now, anecdotes are a fine way to settle an barstool argument between friends about whether a dude can actually eat an entire jar of maraschino cherries without barfing, but they are hardly an appropriate way to advocate policies that would dramatically overhaul a 14.2 trillion dollar economy and severely infringe upon individual liberty.  Yet this is precisely what protectionists do.

And I must admit that they're pretty successful at it.  One of the most vivid memories from my first year as a researcher at the Cato Institute was a 1999 congressional hearing on steel tariffs featuring, among others, my boss Dan Griswold.  Dan was slated to go last, and I had helped him put together a blistering array of stats and figures which clearly demonstrated how the proposed tariffs not only wouldn't help the US steel industry, but also would really hurt a lot more American businesses, workers and consumers (through higher prices and limited supply).  Appearing right before Dan, however, was a representative from the UAW who said something to the effect of "I'm no economist, but here in the real world, and not in some Econ 101 class, trade has destroyed our town.  Take for example my friend John who lost his job last year because of cheap imports and no longer has the health benefits he needs to care for his cancer-stricken daughter Betty."  The man provided no support for these statements, other than a sad-looking family, and yet he crushed Dan's great, fact-filled presentation.  (Here's Dan's testimony if you think I'm making this all up.)

So what are free traders to do?  Well, for one, they can reassert the moral high ground, as I noted above.  But they also can use their own anecdotes - about American families and businesses that rely on trade - to supplement the myriad stats and historical facts which support their policies.  This is precisely the approach I took a few weeks ago when debating the President's new export initiative, and it proved quite effective. 

One last, humorous note here.  Every time that I hear a protectionist preface his misleading anecdote with the "Econ 101" line (which Brian uses twice) or the "I'm no economist, but" line, I immediately think of the old SNL skit "Unfrozen Caveman Lawyer."



See what I mean? (Phil Hartman, RIP)

Trick #5: I'm a free trader, but.... - The last rhetorical trick employed by protectionists is the claim that they support "trade," just not this type of trade.  Brian does precisely this when he concludes that he only wants to "repeal NAFTA and take back concessions to China and other countries with which we have high trade deficits, then we just go back to bilateral agreements with the United States negotiating in the interests of the nation as a whole and not just the investment elite."  In other words, Brian wants trade, but he and his fellow government employees want to pick-and-choose what kind of trade (how much, which products and with whom) in order to determine what they think is in the  "interests of the nation as a whole."  Of course, this leaves the door wide open to pretty much oppose any trade at all, but what's even more ridiculous is the insinuation that 535 people on Capitol Hill can determine which specific trade arrangements are in the "national interest," and which aren't.

Now, I don't know about you, but I don't feel even remotely qualified to make such decisions, and I seriously doubt that the US government - including folks like Brian's boss Congressman Taylor - are so qualified.  Moreover, isn't a system of limited government intrusion and isolation from special interest influence a far better way to ensure that the "national interest," rather than the interest of a few well-connected cronies, is pursued?  Or does Brian really want me - after documenting all of the backroom deals, misleading statements and smarmy payoffs that drown US trade politics - to really believe that his boss and other elected officials are absolutely immune from such influence?   

Puh-leeze.

So where does that leave us?  Well, without their rhetorical tricks, protectionists' arguments are pretty light on content, and I hope that I've shown how Brian's comment is no different.  Then again, I really can't blame Brian for his reply: I mean, if you remove all the fluff, all the baseless conclusions and moralizing, and all the personal attacks from the protectionists' arsenal, there's just really not much to say.

Wednesday, February 24, 2010

Shocker: $24 Billion of ObamaCare Revenue Is Fake?

There have been plenty (and I mean plenty) of stories documenting the budgetary shenanigans in the various Democrat health care bills that are roaming, zombie-like, the halls of Capitol Hill.

But this one might take the cake.

From the paper industry blog Dead Tree Edition comes pretty shocking news that President Obama's latest health care "reform" proposal expressly relies on $24 billion in "subsidy cuts" that literally do not exist.  And just so we're clear here, when I say that they "don't exist," I'm not talking about the standard timing tricks, the unrealistic assumptions, or any of the other budgeting tricks that have become commonplace in this ridiculous healthcare debate.  No, I'm talking about silicone-fake, bright-orange monopoly money.  Here are all the gory details (emphasis mine):
The Obama Administration announced today that it wants to close the non-existent "Son of Black Liquor" loophole to help "pay" for new healthcare legislation.

A few hours later, Senate Democrats won a key vote on jobs legislation that, in some versions, would be paid for partly with the "savings" from closing the same mythical loophole.

Meanwhile, the watchdogs of the news media acted more like lapdogs, taking Administration and Congressional statements at face value without bothering to check the facts...

"Current law provides a tax credit for the production of cellulosic biofuels," notes the Obama Administration's summary of its new healthcare bill. "The credit was designed to promote the production and use of renewable fuels. Certain liquid byproducts derived from processing paper or pulp (known as 'black liquor' when derived from the kraft process) were not intended to be covered by this credit.  The President’s Proposal adopts the House bill’s policy to clarify that they are not eligible for the tax credit."

As Dead Tree Edition has explained previously, black liquor is already ineligible for the Cellulosic Biofuel Producer Credit program, so there is no loophole to close. No money has been budgeted to provide such credits for black liquor, so there is no savings to be budgeted for healthcare, creating jobs, or anything else.

Only in Washington would people try to use the same fake money to pay for two different programs. 
Read the whole thing here (cross-posted on a reputable industry website here).  The author goes on to provide oodles of evidence (including original source documents) demonstrating that the mythical "black liquor loophole" was actually closed on December 31, 2009, and thus any 2010 legislation relying on that "revenue raiser" is not just misleading, but intentionally and patently false.  He also documents how the original, now-closed loophole was used to "knowingly allow[] pulp and paper companies to receive billions of dollars in original black liquor credits, apparently to help get a healthcare bill out of committee."

Pathetic.

Monday, February 1, 2010

UPDATE 6: Lies, Damned Lies and Stimulus* Statistics

I know I sound like a broken record, but this news - released on a Saturday night! - seems to have escaped the scrutiny that it deserves, so here ya go:
Recipients of economic-stimulus money said 599,108 workers were being paid by the funds in the last quarter of 2009, fewer than the number of jobs attributed to the package in the seven months after it was enacted.

The recipients' reports, published on the official government Web site recovery.gov late Saturday, are likely to fuel further controversy over the impact of the $787 billion package, as Democrats craft new jobs-creation proposals to address the country's 10% jobless rate. Many opinion polls suggest that most voters don't believe the current stimulus program, which was passed last February, is working....

The administration could face difficulty explaining how the reports square with its own calculations that the plan kept between 1.5 million and two million jobs in the economy through the end of 2009.
In his State of the Union address to Congress last week, President Barack Obama said that "because of the steps we took, there are about two million Americans working right now who would otherwise be unemployed."

Those projections are based on macroeconomic models and try to include the number of jobs that exist indirectly as a result of people being hired to work on stimulus projects, or of people receiving food stamps or other aid funded by the stimulus program.

Vice President Joe Biden said in a statement that the 599,108 total was "a snapshot of the impact of a small portion of funds" and that the stimulus plan was on track. The reports cover about $54 billion of stimulus spending, Mr. Biden said. Federal agencies say that an additional $215 billion has been paid out in aid and tax cuts....

Stimulus recipients previously reported that they had directly "created or saved" 640,329 jobs by Sept. 30, but their filings were criticized after it emerged that some people had reported saving jobs when they had actually spent the money on pay raises or paying employees who were not in danger of being laid off.
In December, the White House Office of Management and Budget changed its guidance, telling recipients they should start counting every worker whose salary was funded with stimulus money, rather than guessing whether the jobs would have existed in the absence of the federal plan. Opponents of the program accused the administration of "moving the goal posts" to make the plan appear more successful.

Let's see: Saturday night release, misreporting, underreporting, changing the reporting rules, fail, fail, fail.  And now the White House wants to borrow another couple hundred billion taxpayer dollars for another stimulating debaclejobs bill. 

Sign me up!

Saturday, January 2, 2010

Drive-by Economics

Perhaps realizing that he hadn't filled his monthly quota for columns bemoaning Chinese monetary policy and mercantilism, Paul Krugman published yet another one on New Years Eve  - just under the December wire!  The details of Krugman's latest New York Times column need not be discussed in this blogpost, as it's pretty much identical to its October and November brethren, and I've already said my peace on those.  But Krugman's December China currency column still warrants mention here because in it he reaches a new low when covering a subject over which his expertise should be unquestioned - international trade.  In the middle of his column, Krugman unleashes this doozy (emphasis mine):
Meanwhile, that [Chinese] trade surplus drains much-needed demand away from a depressed world economy. My back-of-the-envelope calculations suggest that for the next couple of years Chinese mercantilism may end up reducing U.S. employment by around 1.4 million jobs.
Maybe because people ignored his October and November hysteria on China's currency policies, Krugman felt the need to amp it up a notch by putting a zany job-loss number in the middle of his monthly China regurgitation.  Maybe Americans just don't get too agitated by warnings of "global imbalances," and - let's face it - everybody knows that "jobs" are 2010's super-sexy-it-word.  I dunno.  But what I do know is that not a single word before of after the passage above explains how Krugman came to this eye-popping "back-of-the-envelope" statistic.  Indeed, we don't even know if he was using one of those small envelopes that come with grocery-store floral bouquets, or one of those huge envelopes that we lawyers use to serve confidential 500-page documents to our adversaries (hey, maybe it was the envelope in which his Nobel Prize Certificate was mailed).  Krugman never says.  Instead, he just spits out the stat and then keeps rambling on about China's mercantilism, the obvious wisdom of Keynesian economics, and, naturally, how he's smart and everyone else is stupid. (Duh.)

My only guess is that Krugman derived the "1.4 million" number using the flawed, completely debunked method - founded by the union-sponsored protectionists at the Economic Policy Institute - that mindlessly translates bilateral trade deficit figures into "lost job" numbers (down to the ridiculous decimal point!).  That would be a really bush-league move, even for Krugman, but who knows?  It's certainly simplistic enough for an envelope-doodle. But the fact that only Krugman knows how he came up with his new "statistic" exposes it as absolutely, completely worthless for public consumption or discussion.

Yet there it is, and I'm left wondering how many times I'm now going to have to hear (and rebut) this fake number - "1.4 million 'Merican jobs!" - over the next few months as politicians and career protectionists demagogue away on the evils of China's trade and currency policies.  Unfortunately, once these stats - especially those originating from a Nobel Laureate and liberal icon like Krugman - are irresponsibly strewn across the interwebs, they never, ever go away, regardless of their actual veracity.  (Indeed, those EPI numbers have been proven worthless for years now, and yet politicians still campaign on them.  Good ol' Public Choice Theory!) 

And considering how important and delicate the issue of US-China trade relations will be for 2010 and beyond, Krugman's nonchalant ejaculation of this fake statistic onto the pages of the New York Times and lord-only-knows-how-many other websites and blogs is the height of journalistic - and economic - malpractice.

But I guess at this point that I really shouldn't be surprised by any of this.  For years I'd read a stupid quote from a Krugman column on an issue other than international economics, and I'd say to myself, "Man, I wish this guy would just stick to trade and economics instead of this drivel."  But with columns like this, I can't even say that anymore.  He's officially unreadable on all fronts.  And considering the invaluable contributions that Krugman made to the free trade cause in the 1980s and 90s, that's a really, really depressing conclusion.

Wednesday, November 18, 2009

UPDATE5: Lies, Damned Lies and Stimulus* Statistics

This ABC report pretty much speaks for itself:
More than 50,000 jobs, or one out of every 10 jobs the White House says were "saved or created" by their economic stimulus plan, came from projects that reported spending no money yet, according to a government report obtained by ABC News.

The report by the Government Accountability Office analyzes the administration's October 2009 report on jobs saved or created by the $787 billion stimulus program and finds a "range of significant reporting and processing problems that need to be addressed." ...

The new GAO report finds that 58,386 of the more than 640,000 "saved or created" jobs listed on recovery.gov are from stimulus projects where no money has yet been spent.

On the flip side, the report finds nearly 10,000 projects that report spending a total of $965 million without creating any jobs at all.

The report also raises questions about how closely the contracts are being monitored. Twenty-five percent of the more than 130,000 primary contracts listed were not marked as having been reviewed by any government agency, and less than 1 percent of subcontracts were reviewed.
Here's the ABC video report. Oy vey.

Monday, November 16, 2009

UPDATE4: Lies, Damned Lies and Stimulus* Statistics

More news rolled in today on the White House's bogus Stimulus* job statistics:
  • ABC News:  "Obama Admin Slashed 60,000 Jobs From Recent Stimulus Report." So not only are you saying that the White House was aware of these ridiculous reports, but you're also saying the report could have been a lot worse?!?! Yikes.
  • Detroit Free Press (courtesy of HotAir): "Billions for state, but where are jobs? Majority of stimulus awards have brought little help." "[The Free Press'] analysis also revealed that others who have been promised or have received stimulus money have overstated -- in some cases greatly -- the number of jobs created or protected."
Finally, the hardworking folks over at the Washington Examiner have done a much better - and more technologically savvy - job than I've done at documenting all of the Stimulus* misreporting.  They've produced an interactive map, available here, which shows that - so far - the White House's report overcounted jobs by at more than 10%.  I say "so far" because not all state newspapers have completed their analyses.

75,343 fake jobs and counting!  Viva la HopeChange!

Friday, November 13, 2009

UPDATE3: Lies, Damned Lies and Stimulus* Statistics

Like the sands of the hourglass, so are the stories of ridiculous, bogus Stimulus* job statistics.  This week, the Boston Globe - hardly the hyper-critic of the Obama administration - unveils their review of the Massachusetts Stimulus* job numbers that those zany White House "triple-checkers" released a couple weeks ago:
While Massachusetts recipients of federal stimulus money collectively report 12,374 jobs saved or created, a Globe review shows that number is wildly exaggerated. Organizations that received stimulus money miscounted jobs, filed erroneous figures, or claimed jobs for work that has not yet started....

One of the largest reported jobs figures comes from Bridgewater State College, which is listed as using $77,181 in stimulus money for 160 full-time work-study jobs for students. But Bridgewater State spokesman Bryan Baldwin said the college made a mistake and the actual number of new jobs was “almost nothing.’’ Bridgewater has submitted a correction, but it is not yet reflected in the report....

“There were no jobs created. It was just shuffling around of the funds,’’ said Susan Kelly, director of property management for Boston Land Co., which reported retaining 26 jobs with $2.7 million in rental subsidies for its affordable housing developments in Waltham. “It’s hard to figure out if you did the paperwork right. We never asked for this.’’

The federal stimulus report for Massachusetts has so many errors, missing data, or estimates instead of actual job counts that it may be impossible to accurately tally how many people have been employed by the massive infusion of federal money. Massachusetts is expected to receive an estimated $1 billion more in stimulus contracts, grants, and loans....

“We see $15 million construction projects with no jobs, and a $900 shoe sale that created nine jobs. Both are obviously wrong,’’ said Michael Balsam, chief solutions officer for Onvia, a Seattle data company tracking the stimulus spending. “There were a lot of recipients that did not report. Those that did report have some data challenges - wrong data or missing data.’’...

Some of the errors are striking: The community action agency based in Greenfield reported 90 full-time jobs associated with the $245,000 it got for its preschool Head Start program. That averages out to just $2,700 per full-time job. The agency said it used the money to give roughly 150 staffers cost-of-living raises. The figure reported on the federal report was a mistake, a result of a staffer’s misunderstanding of the filing instructions, said executive director Jane Sanders.

Several other Head Start agencies also reported using stimulus funds for pay raises and claimed jobs for it.

At Bridgewater State, Baldwin said the college mistakenly counted part-time student jobs as full time.

Some agencies that received stimulus money reported jobs for work that had not started. The Greater Lawrence Family Health Center reported 30 construction jobs “have been created,’’ even though it hadn’t begun construction on a $1.5 million renovation and expansion. Grant administrator Beth Melnikas said the health center does expect to hire 30 workers....

For example, the City of Waltham said a $630,500 solar panel installation on the roof of City Hall created 10 jobs - even though the work had yet to begin. Revere spent $485,500 in stimulus funds to install solar panels on the roof of a city school. Revere’s job count? 64....

Massachusetts property owners received $75.5 million in rental subsidies from the stimulus bill, for a reported total of 437 jobs. Recipients of 27 of the 87 contracts reported zero jobs. The others, meanwhile, simply reported the number of employees working at the property. If they received two contracts, for a larger property, they reported the employee figure twice.

For example, Plumley Village East in Worcester listed 23 jobs for each of its two contracts for a total of 46 jobs, even though it has only 23 employees working throughout the complex....

One of those property owners, meanwhile, is frustrated by his experience with the legislation. Robert Ercolini manages a 201-unit affordable housing development in Plymouth. After being notified his annual rental subsidies were classified as stimulus spending, Ercolini renewed a request to the US Department of Housing and Urban Development for more than $1 million to fix up the property, reasoning he would be creating jobs by hiring contractors. He was refused.

“After HUD denied me money to make needed improvements and actually create jobs,’’ Ercolini said, “it’s really funny to find out in September that I’ve been receiving stimulus funds all along and they want to know how many jobs we’ve saved or created.’’

By his count, the answer is: “No jobs.’’
No.  Jobs.  None.  You know, these stories would be kinda funny, if they hadn't, you know, been appearing all over the country at a taxpayer cost of $795 billion (sans interest).  Hence, not funny. At all.

But wait, there's more.  The good folks over at HotAir have found another news story (they list several, but I've already cited the others) that documents similar instances of "wild exaggeration":
In Connecticut, the accounting for jobs saved and created apparently neglected to check the work, claiming that Porkulus funds saved 108 jobs in a police department of 22 officers — who weren’t at risk of being laid off anyway. In Texas (same link), a contractor hired five roofers and an inspector to replace some fencing and roofs in a town of 900 people, and got credited with saving 450 jobs.
This is quickly becoming a nationwide scam, isn't it?  A despicable, nationwide scam.

Anyway, for those of you playing the Stimulus* home game (costs $795; broken on arrival) and keeping score on the number of states that have - so far - reported bogus job stats, here's your new tally: Connecticut, Georgia, Kentucky, Illinois, New Jersey, Milwaukee, Massachusetts, Oregon, Florida, Texas and California.

Santa Claus, the Easter Bunny, and a Stimulus* job walk into a bar....

Friday, November 6, 2009

Update2: Lies, Damned Lies and Stimulus* Statistics

Another day, another story of bogus Stimulus* job numbers.  Today's episode comes from California, courtesy of the Sacramento Bee:
Up to one-fourth of the 110,000 jobs reported as saved by federal stimulus money in California probably never were in danger, a Bee review has found.

California State University officials reported late last week that they saved more jobs with stimulus money than the number of jobs saved in Texas – and in 44 other states.

In a required state report to the federal government, the university system said the $268.5 million it received in stimulus funding through October allowed it to retain 26,156 employees.

That total represents more than half of CSU's statewide work force. However, university officials confirmed Thursday that half their workers were not going to be laid off without the stimulus dollars.

"This is not really a real number of people," CSU spokeswoman Clara Potes-Fellow said. "It's like a budget number."...

Asked how many jobs actually would have been lost at CSU campuses without the stimulus infusion, Potes-Fellow said she did not know, though she said it would have been significant.
Translation: "We have no freakin' idea, but trust us, it's plenty!"

Adding this news to the earlier stories that I've previously noted, we now have bogus White House Stimulus* job stats from Georgia, Kentucky, Chicago, New Jersey, Milwaukee, Boston, Oregon, Florida and California.  I have no doubt that more of these ridiculous, anger-inducing stories are on the way, and at some point we'll probably need to ditch the whole report and stop "just trusting them."

Actually, with unemployment at 10.2%, I'd say that now is that point.

Thursday, November 5, 2009

Update: Lies, Damned Lies and Stimulus* Statistics

The Mercatus Center's Veronique de Rugy has more evidence of ridiculous Stimulus* job-counting over at NRO's The Corner.  She finds stories from The Milwaukee Journal Sentinel, Boston.com (a repeat of the AP article I cited yesterday), and - gasp! - the New York Times that all indicate massive over-reporting in the White House's latest jobs report.

Her conclusions on the NYT Article:
The Times says reports released last week "from more than 130,000 recipients of stimulus money in which they claimed to have saved or created more than 640,000 jobs" are in some cases "simply wrong, while others contain apparently subjective estimates."

Basically, the newspaper admits that maybe the administration can't really calculate the number of jobs saved or created with the stimulus money.
DOH!  Read the whole thing, and the linked articles, here.  That now makes five news stories - reporting from Georgia, Kentucky, Chicago, New Jersey, Milwaukee, Boston, Oregon and Florida - highlighting the rampant problems with the "triple-checked" report.

640,239 jobs "saved or created," huh?  Umm, yeah, not so much.

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?

Wrong.

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 recovery.gov.

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.