For its claims, the administration is relying on a January analysis by White House economists Christina Romer, the chair of the Council of Economic Advisers, and Jared Bernstein, economic policy adviser to the vice president. Their model looks at how much the stimulus package would change GDP and then measures how many jobs that size GDP change would create or save. Thus far, the White House claims 150,000 jobs have been created or saved.
(The "created or saved" language is based on a quirk of labor statistics. If 10,000 people lose their jobs and 10,000 new jobs are created, the net change is zero. That's the same net change as if 10,000 jobs were saved. In the labor statistics used to measure progress, 10,000 created jobs are indistinguishable from 10,000 saved jobs.)
But even as stimulus spending increases over the summer, there will be no immediate way to connect the stimulus spending to any specific 600,000 jobs. In the short run, it's clear that the stimulus will boost GDP, and thus some job creation can be inferred.
And when the Wall Street Journal and Max Baucus agree that you're making things up...
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."
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