Pelosi: Unemployment benefits create jobs or something

Watch out, Hillary Clinton. House Speaker Nancy Pelosi has her sights set on your "Smartest Woman in the World" title and she's headed straight to the top.



Via Hot Air, to which you might go for additional commentary.

Grading PolitiFact: Paul Krugman compares Massachusetts with the U.S. of A

PolitiFact recognizes that there is a difference between the truth of a literal statement and the truth of the underlying argument.  But the fact check operation routinely ignores one in favor of the other or applies differing standards to each depending on the case.

The issue:

The fact checkers:

Louis Jacobson:  writer, researcher
Greg Joyce:  editor


Analysis:

It isn't hard to obtain a clue that PolitiFact will give Krugman a break on his literal statement.  Krugman says the Senate plan is "identical" to the one passed in Massachusetts.  PolitiFact goes for an underlying argument to the effect that the plans are merely similar.

Jacobson provides some background:

Grading PolitiFact's grading of the stimulus bill

The PolitiFact headline caught my eye.  Here's how it looked at FaceBook:

I will focus on two general aspects of this PolitiFact entry, the visual presentation and the literary content.

The appearance of the FaceBook version offers special prominence to the bar graph seen just below "PolitFact.com."  Once one gets to the full story by clicking the link, one has the opportunity to read a caption that describes the graph as part of the Obama administration's claims about itself ("David Plouffe, a political adviser to President Obama, circulated this chart ...").  I would suggest that the placement of the graphic provides an implicit support of the positive effects of the stimulus bill.  That effect is only slightly diminished at the main page, coupled as it is with the Truth-O-Meter rating of one of Vice President Joe Biden's  claims about reduced job losses over time.

So the visual presentation makes the stimulus bill look pretty good, even if the arguments underlying the presentation may be specious.  But what about the content?

The content, considering the piece is billed as a grade of the stimulus bill, contains precious little grading.  Indeed, it might not exaggerate the situation to state that authors Robert Farley and Louis Jacobson did not offer any specific effective/not effective judgment at all.  Instead, they treated the reader to a series of of political statements and expert opinions--more in line with the traditional methods of the objective reporting paradigm.

The story isn't exactly the best example of objective reporting, however.  In spite of a number of research references to Heritage.org, the assessment of the experts at Heritage apparently did not find their way into the Farley/Jacobson story.

Is that important?

Yes, it is.  Economists disagree on many things, and the Keynesian approach to economic intervention remains a very contentious point.  However, though Keynesian policies remain controversial among economists, they also remain very popular.  Thus, it is easy to find a good number--even a clear majority--who will affirm that Keynesian spending will effectively boost an economy.

The uncited work of Brian Riedl at Heritage.org offers a counterpoint to the entirety of the PolitiFact story:

Heritage Foundation, "Why Government Spending Does Not Stimulate Economic Growth: Answering the Critics," by Brian M. Riedl, Jan. 5, 2010  

Heritage Foundation,"White House Report Claims Stimulus Success-Despite 3.5 Million Job Losses," by Brian M. Riedl, Jan. 14, 2010  

Heritage Foundation, "CBO Says Stimulus Is Working Because We Predicted It Would," by Brian Riedl, Dec. 1, 2009  

The first of these articles provides an excellent explanation of Keynesian economics, by the way.

Farley and Jacobson end up relying on Keynesian assumptions to imply the success of the Keynesian stimulus.  It is worth noting that the third article by Riedl listed above, "CBO Says Stimulus Is Working Because We Predicted It Would," deals with that same aspect of begging the question.

CBO Director Douglas Elmendorf proclaimed that (Keynesian) economists' predictions of job creation were more accurate than the records of those spending the stimulus money.  But if that's the case, how would one ever test the accuracy of the predictions in the first place?  What is the origin of their predictive cachet?

Therein lies the mystery.  The Keynesian economists say Keynesian economic approaches work just great.  News/opinion outfits such as PolitiFact report what the Keynesians say.  So it must be true, right?

PolitiFact offered no grades as such in this story.  But even though I took a less formal approach than usual on this post, I will offer some grades:

Robert Farley:  F
Louis Jacobson:  F
Catharine Richert:  C

Though I don't know who researched what, Catharin Richert only did research on this piece.  As a result, she's off the hook for the implicit logical errors in the content, including such things as the post hoc ergo propter hoc fallacy.  It was great that Riedl's work appeared in the list of sources, but unfortunate that the content of the story appeared to entirely ignore Riedl's contribution to the argument.

Overall, this PolitiFact story was a faux fact check.  All it did was affirm that Keynesian economists affirm the Keynesian approach.  As Riedl points out, with no thanks due to PolitiFact, at some point the empirical data from economic outcomes need to support the Keynesian models or else the latter are open to question.  It looks like PolitiFact cherry-picked its expert commentary.


Afters:

One of the key experts cited in the PolitiFact story was Gus Faucher, director of macroeconomics at Moody's economy.com.  "Augustine" Faucher's FEC-listed political contributions have all been to Democrats, including a $300 gift to the Obama campaign in Sept. 2008.

Does that mean that we can't trust Faucher?  No, it isn't so simple as that.  Faucher undoubtedly believes in Keynesian principles and government intervention in markets, so his comments as to their effectiveness are simply what we should expect regardless of whether he supported Obama's candidacy.  Faucher's politics when added to his predisposition toward the Keynesian approach should cause us to take his expertise with a grain of salt, though.  He is not a neutral party on this issue.



March 3, 2010
Corrected typographical error on the spelling of Gus Faucher's name (I had spelled it "Guy Faucher").  Apologies to Mr. Faucher and my reader(s).

Grading PolitiFact: President Obama and what happened before he walked in the door

Obama's Jedi mind-trick ability comes to the fore nearly to the point of "Simon says."

The issue:

The fact checkers:

Catharine Richert:  writer, researcher
Greg Joyce:  editor

Analysis:

PolitiFact usually treats truth claims one of three ways.  One, rate the literal truth of a statement.  Two, rate the underlying argument.  Three, do a little of both.  But sometimes PolitiFact takes the fourth option.

To be sure, Catharine Richert's story sets out to rate the literal truth of this Obaman utterance.  As to whether she hit that mark, read on and judge for yourself.

As usual we emphasize the context of the statement in question. Curiously, in this case Richert failed to list a source.  I write that confidently, given that all save one of the referenced sources was dated in the year 2009, before President Obama gave his first State of the Union address.  The other one was written in 2001.

In any case, here is the version of Obama's speech from whitehouse.gov:

At the beginning of the last decade, the year 2000, America had a budget surplus of over $200 billion.  (Applause.)  By the time I took office, we had a one-year deficit of over $1 trillion and projected deficits of $8 trillion over the next decade.  Most of this was the result of not paying for two wars, two tax cuts, and an expensive prescription drug program.  On top of that, the effects of the recession put a $3 trillion hole in our budget.  All this was before I walked in the door.  (Laughter and applause.)

Now -- just stating the facts.  Now, if we had taken office in ordinary times, I would have liked nothing more than to start bringing down the deficit.  But we took office amid a crisis.  And our efforts to prevent a second depression have added another $1 trillion to our national debt.
(yellow highlights added)

The president said quite a bit within the space of those two paragraphs, and it would be fair to summarize it as "to whatever degree the state of the union is a fiscal nightmare, it is the fault of Bush (or the Republicans)."  But this is another of those times where PolitiFact shows little interest in the underlying argument.

TANSTAAFL and single payer health care

In economics, it is said that there ain't no such thing as a free lunch.

That is the phrase behind the acronym "TANSTAAFL."

Various observers have noted that contemporary advocates of single-payer health care appear to throw TANSTAAFL out the window. They appear to believe that something may be had for nothing.

I was reminded of this while doing some research on single-payer health care. I was actually just trying to compile a list of nations who use a single-payer universal system, but I kept running into these crazy pages advocating the single-payer system. I eventually locked in on a page that peddled the single-payer system as an economic stimulus, and offered a study to back it up.

How intriguing, I thought.

The study was produced by the Institute for Health and Socio-Economic Policy, a "research arm" of the California Nurses Association. The CNA spins the study like this:

Medicare for All (Single Payer) Reform Would Be Major Stimulus for Economy with 2.6 Million New Jobs, $317 Billion in Business Revenue, $100 Billion in Wages. The number of jobs created by a single payer system, expanding and upgrading Medicare to cover everyone, parallels almost exactly the total job loss in 2008, according to the findings of a groundbreaking study released today.

• Read the complete press release here

Isn't that awesome? Single-payer health care features all kinds of benefits!

Could there be a catch?

The study certainly does put the very best face on single-payer health care by emphasizing the economic benefits. Despite that emphasis, the catch is difficult to hide. It comes through clearly in the conclusion of the study:

This study demonstrates that a comprehensive Medicare based Single Payer system can make significant contributions to access of quality care for all U.S. residents and in the process generate a much needed and very substantial economic stimulus in the form of jobs, enhanced business and public revenues and increased wages for the public at large.

All this comes at a relatively modest increase in net costs of $63 billion.

Not to insult anyone's intelligence, but the study just explained to you that the benefits will cost us $63 billion. So this "economic stimulus" is perfectly Keynesian. And, of course, the problem with Keynesian stimulus is that the bill comes due eventually. That $63 billion in red ink--who pays for that year after year?

TANSTAAFL.

Either somebody pays the tab--resulting in a subtraction of a portion of the economic pie ($63 billion net)--or else the government eventually has to start denying services in order to meet its financial obligations.

Ironically, these numbers the CNA trumpets as economic stimulus come largely from an increase in the demand for health care services created by the expansion in coverage. That is the curse of third-party payment. This study spins one of the big drawbacks of the single-player version of universal health care into a positive!

clipped from www.calnurses.org

These ladies love the idea of single-payer health care because it takes from other parts of the economy to bolster their segment of the economy. At least until the government institutes wage caps and/or rationing of services. But maybe nobody explained that part to them.

President Obama's recent public statements on health care seem to perform the same type of illusionist's tricks with the economics involved. Obama tells us that we can't afford to do nothing, since the price of insurances is going up so fast. That is why we need to reform things. But even in a system pulled as far from free market principles as ours, the rising cost of health insurance would do exactly what Obama is preaching.

Obama, after all, is saying that we need to spend less on health care. That, coincidentally, is exactly what high prices do. They decease demand for services. Would you use a cell phone if it cost you $5,000 per month? Probably not.

So the increase in prices would automatically tend to decrease health care expenditures.

On the downside, people will get less health care. But how is that different from the plan Obama supports? Just try to divine the source of the savings in his plan.

Digitalizing medical records? That will cost money up front, and it isn't clear it will save much in the long run.

Preventive care? In certain cases preventive care saves money, but many preventive measures are not cost effective at all. And in any event preventive care tends to simply delay an eventual big expense later on. The cardiac arrest you avoid tomorrow may turn into the inoperable cancer you get 10 years hence. The health care system saves money if you die of the sudden cardiac arrest, bottom line.

Let's look at one savings that Obama has emphasized particularly:

The biggest thing we can do to hold down costs is to change the incentives of the health care system that automatically equates expensive care with good care. Now, this is an important concept, so I want everybody to really focus on this. We are -- we've been under the illusion that the more health care we get, the healthier we become. And it turns out that every study shows that the question is, are you getting the right care, are you getting the best care, the high-quality care, rather than are you having a whole bunch of tests ordered that are unnecessary, getting a bunch of treatments that are unnecessary, staying in hospitals longer than may be necessary -- all of which drives up your costs, but doesn't make you better.

One question: How?

You can cut down on diagnostic tests if doctors somehow reduce their liability, but I have yet to detect a thread of tort reform in the Obama prescription for health care.

I don't see how, minus tort reform, the health care system will reduce so called expensive care without the government telling doctors how to do their jobs. Do you? Single-payer advocates help me out. How is that supposed to work?

Grading PolitiFact: Does Warren Buffett support Obama?

Fact-checking the Fact-checkers

The issue:

A statement made by President Obama to Steve Croft during a "60 Minutes" interview:

"Your plan really for solving the banking crisis was met with very, very, very tepid response," Kroft said to Obama. "A lot of people said they didn't understand it. A lot of people said it didn't have any, enough details to solve the problem. I know you're coming out with something next week on this. But these criticisms were coming from people like Warren Buffett, people who had supported you, and you had counted as being your..."

"And Warren still does support me," Obama interjected. "But I think that, understand, Warren's also a big player in the financial markets who's a major owner of Wells Fargo. And so he's got a perspective from the perspective of somebody who is part owner of a bank.
(PolitiFact)

Does Warren Buffet still support Obama?

The fact checkers:

• Alexander Lane (writer, researcher)
• Bill Adair (editor)
  

Analysis:

Alexander Lane seems to have put very little effort into this entry. For Lane, perhaps, it was an open-and-shut case so there was little to be gained by giving the facts any close examination. After noting what President Obama said during his interview with Steve Croft, Lane moves immediately toward resolution:

Buffett, who endorsed Obama during the campaign, did explicitly say during a three-hour interview March 9 with CNBC that he still supports Obama.

OK, break.

Identification of the intended sense of a term stands as the key to evaluating the accuracy of claims. What was the original context? Kroft introduces the root word:

But these criticisms were coming from people like Warren Buffett, people who had supported you, and you had counted as being your--

Kroft, it seems, uses the term in its generic sense of broadly supporting a candidate. He uses Buffett's support of Obama as a point of contrast to emphasize the broad based nature of criticisms of Obama on economic policy.

Obama interrupts Kroft:

And-- and-- and-- and Warren still does support me. But I think that understand Warren's also a big player in the financial markets who's a major owner of Wells Fargo. And so he's got a perspective from the perspective of somebody who-- is part owner of a bank.

As with Kroft's use of "supported," I think Obama's is the generic sense of generalized support. Obama's interruption of Kroft, however, produces an impression of defensiveness. Perhaps the president was concerned that viewers would think that Buffett was critical of his economic policies? If that were the case, and I do not know that it is, then Obama may be guilty of throwing up a bit of a smokescreen. And that is the only scenario in which I can conceive of this episode being worthy of the effort of fact-checking.

So let's continue the examination after getting one thing out of the way: Kroft acknowledged Buffett's support of Obama. Obama was right to note Buffett's support in the same generalized sense as Kroft meant it. And Buffett does continue to support Obama in that generalized sense.

PolitiFact researcher Alexander Lane provides adequate proof of the above with the initial quotation he provides:

"I voted for Obama and I strongly support him, and I think he's the right guy," Buffett said early in the interview.

Lane also treats the more convoluted issue that I identified above as he continues to quote Buffett. First, the PolitiFact version:

Buffett did criticize Obama's handling of the banking crisis, saying that "a bank that's going to go broke should be allowed to go broke," as long as the depositors are protected. (Obama's approach has leaned toward giving the banks more bailout money in some form rather than letting them fail and having the government take them over.)

But Buffett's primary concern was that Obama wasn't communicating clearly with the public about struggling banks. "The right answer for me (to the banking crisis) is the president to clarify things as only he can, because you have heard so many different things," he said. "He is the commander in chief on this, and it has to be clarified...because if people aren't clear, they're going to be confused. And if they're going to be confused, they are going to be scared stiff. And that has to end."
(bold emphasis added)

Lane opens up a big can of worms with this quotation. Take a look at a more complete version of that interview exchange:

BECKY: There was the idea that maybe they should just be buying shares outright. There's the idea of nationalization out there. What's the right answer?

BUFFETT: The right answer--the right answer for me is the president to clarify things as only he can, because you have heard so many different things. And, you know, they're doing their best to communicate, but the person that the people of the United States gave their trust to not that long ago was Barack Obama. He speaks very well. He has--he is the commander in chief on this, and it has to be clarified. Like I say, the head of the New York Fed gave a talk, explained a lot of it, but nobody's going to pay that much attention to what he says. You need the president of the United States to make it very clear. Because if people aren't clear, they're going to be confused. And if they're going to be confused, they are going to be scared stiff. And that has to end.

BECKY: Does that--you make it sound almost like it doesn't matter what he says, as long as he picks one of those.

BUFFETT: Well, it matters...

BECKY: That's--you've got to--you've got to be leaning one direction.

(CNBC)

The key graph, of course, is Becky Quick's excellent follow up to Buffett's answer, "you make it sound almost like it doesn't matter what he says, as long as he picks one of those."

Rather than putting to rest Buffett's criticisms of Obama's economic policy, this exchange makes clear that Buffett had two principal criticisms of Obama. One, that his practical emphasis was misguided. Two, that the president's handling of the crisis in terms of public relations was a failure. The second stands as an important point because public attitude toward the economy holds a strong influence over the economy.

Buffett was saying, in effect, that Obama was blundering in two ways, and Buffett, in effect, was willing to forgive the first if Obama would correct the second.

Lane's treatment of the quotation is adequate to communicate what Buffett was saying if one is relatively in tune with the backstory, but could easily mislead people who were less familiar with Buffett's opinions on the economic crisis. Nothing quoted by Lane diminishes in any respect Buffett's two fundamental criticisms of Obama's economic policy.

1) Buffett does not support bailing out the failing financial institutions*
2) Buffett does not support bad presidential communications on economic issues*

*things Obama is/was doing

The way Lane tells the story perpetuates confusion about different types of support. To whatever extent Obama was trying to substitute generalized support for specific support of economic policies, the president was guilty of deceitful communication.

Given Obama's interruption of Kroft, there is sufficient evidence to see beyond what is suggested by the plain meaning and infer that Obama had a dubious argument implicit in his response to Kroft. PolitiFact should have graded Obama "Mostly True" and emphasized the distinction between general support and specific support for the handling of the current economic situation.

Lane failed in that:

Toward the end of the three-hour interview, Buffett reiterated his support for Obama. "He is the right president," Buffett said. "He's very, very smart. He's got, I think, exactly the right goals. He's articulate and I -- you know, he will be the right person to be the commander in chief in this economic crisis."

So clearly Obama was on solid ground touting Buffett's continued support. We find this claim to be True.

Though Lane's eventual determination is not far removed from the one I would have reached, his methods were unacceptably careless. This PolitiFact entry is more rehabilitation than fact-checking, as when Lane parrots Obama's psychologizing of Buffett (not a facet I spent time on in my analysis, but it's there).

The Grade:

The grade for Lane and Adair: F+


Mar 24, 2009: corrected spelling of "principal"

Modern protectionism still alive?

For a time I carried the impression that President Obama had dropped the trade protectionism from the spendulus package.

Apparently my impression was poorly founded.

The Weekly Standard serves up piece by Irwin M. Stelzer titled "The Ghosts of Smoot and Hawley" that reports that trade protectionism remains intact in the bill.

And Stelzer gives us a golden sentence to quote:

(A) man who can one day sign a bill calling for $787 billion in stimulus spending, the next day commit a possible $275 billion to mortgage relief, and then convene a national conference on fiscal responsibility--followed almost instantly by a speech to Congress calling for massive spending on health care, education, and green energy, among other things--is not to be held to any standard of consistency, even the debased one applied to ordinary politicians.

I withdraw the credit I had offered Obama on this issue, pending news that the trade restrictions have been removed for real.

SPT declares progressive taxation "fair"

Ah, the St. Petersburg Times.

Are they socialists or merely liberals?

I've been eagerly awaiting the editorials concerning President Barack Obama's budget plan. I figured it would be good for a few laughs. They delivered before the first paragraph ran into its first period.

President Obama's first budget proposal steers the nation in a new direction and aggressively pursues a fairer tax system, health care reform and an assault on global warming. It also offers some hard truths. The federal deficit is going to grow to uncomfortable levels until the economy recovers, and fundamental change is not free.
(The St. Petersburg Times)

That paragraph helps show that the editors behind the piece are of a mind with Obama when he makes statements to the effect that taxation should be about fairness. That is,the type of fairness that redistributes wealth instead of the kind that results in a strong economy. Leaving aside the fact that taxing one person at a 15 percent rate while you tax another person at a 38 percent rate is patently unfair. Try that with a sales tax sometime.

The president's 10-year budget is a welcome departure from the Republican economic policies embodied by the Reagan era. It reaffirms government's role in public life,

Reaffirms it? It grows the role of the federal government in the United States to unprecedented levels and gives the tab to our descendants. There aren't enough rich to pay for this budget even if we draw the line at $75k, according to the Wall Street Journal. And that's by taking every dime they earn.

and it starts peeling away tax breaks for the rich and for special interests.

It replaces tax breaks for some special interest groups with tax breaks (handouts, actually) for other special interest groups. The stimulus plan signed into law by Obama unreforms the welfare system by giving "tax credits" to people who pay no federal income tax. Didn't pay income taxes? Doesn't matter. You may receive a refund check from the government anyway.

The whole "special interests" thing is a sham. Everybody is part of some sort of interest group. Some are better organized than others, but any time the government spends money it is going where some special interest group wants it to go. The Times editors are apparently happy to perpetuate the lie. And guess what? When you spend the kind of money Obama wants the government to spend, you can please a whole lot of special interest groups.

It also is more transparent about the costs of war and the tough economic choices ahead than the budget documents produced in recent years by the Bush administration.

Good point in the former half, even if it isn't exactly stand-up-and-cheer material. The latter point is stupid. In what possible way can or should a budget have anything to say about "tough economic choices" other than implicitly via its own priorities?

The annual deficit, fueled in part by President Bush's policies and the recession, would be the largest in relative terms since World War II. But Obama forecasts it would be cut by more than half in four years as the war costs drop, tax revenue from the wealthy and industry rise, and the economy recovers.

"(L)argest in relative terms" is the nice way to put it, of course. The new budget dwarfs all others in terms of dollars spent via direct comparison. The deficit from this budget is so large that cutting it in half still leaves it larger than Bush's biggest deficit. See the graph below, based on numbers from the Congressional Budget Office.

clipped from caseyresearch.com

The president makes a persuasive argument that large deficits now are the necessary price for preventing economic collapse and focusing on long-term goals.

Persuasive if you're a brain-dead moron, anyway. The TARP program(s) are probably needed to prevent economic collapse and keep the availability of credit. Obama's persuasive speech went well beyond that to make the case for the extremely questionable need to put the government in the driver's seat for huge portions of the economy--including health care. It doesn't add up, and if the Times editors can't see it then they need to sack their bean-counters and hire some new ones.

Obama walks a political tightrope as he tackles the economic inequality that has expanded in recent years and embraces more progressive tax policy.

Correction: Obama is forcing the United States to walk an economic tightrope by enacting policies likely to chase capital out of our economy ostensibly for the purpose of stimulating the economy. That worries Obama fan David Brooks of the New York Times. The editors at the St. Petersburg Times, if they have any doubts about our economic savior, will not express them. Now that Bush is out of office it's time to put on the hopeful face with respect to the economy.

To his credit, Obama also is pursuing key campaign promises even in the face of the deep recession. His budget sets aside $634 billion — half from the taxes on the wealthy and half from health care savings, including eliminating the Medicare Advantage subsidies — as a down payment on health care reform. He sticks to concepts such as making health care available and affordable and leaves the details to Congress for now. That's a smart move, given the way the complicated Clinton health care initiative imploded in the early 1990s.

Right. Smart move. After all, look at the great job Congress did when Obama handed off the short-term economic stimulus package to Pelosi and Reid. The Obama administration said there was no pork in the bill. PolitiFact says the administration is peddling a falsehood. I wonder if the editors of the Times ever read PolitiFact? Maybe they just hope that their readers choose either editorials or PolitiFact but not both.

Minus tort reform, probably the only way the government will control medical costs will be through rationing of services. And some will call that fair.

This is a budget plan that sets ambitious goals and offers reasonable clarity about the costs. There are legitimate concerns about the size of the deficits, the optimism in the estimated timing and strength of the economic recovery and a number of other details. But Obama's first budget is consistent with his campaign themes, and it is a bold blueprint for a brighter future.

Check out that middle sentence! "(L)egitimate concerns about the size of the deficits." Questioning the level of optimism displayed by the administration, along with "other details." Those are big details--but if the goal is a more socialist America, apparently the editors of the Times are down with it.

Prediction: Despite a silver tongue in the league of Bill Clinton's, watch the popularity of this president erode, leading to increasing resistance to his radical policy direction. The budget is in line with his campaign themes as interpreted by those with a pronounced leftward tilt. His early policy moves place him to the left of the American mainstream, even if the new president remains to the right of certain newspaper editors. People do not trust the government with the type of power included in the Obama vision, and the results of Congress' effort to keep children safe from lead is just one example of the ham-handed federal style that legislates without foreseeing the consequences.

An emergency need for long-term growth?

I dropped by a favorite Web site, whitehouse.gov, to see what kind of content is posted now that the president's team has had a chance to practice. The link to Obama's economic plan jumped out at me, so I clicked it.

What I read there seems to belie the reports that Barack Obama is an intelligent man. See what I mean:

President Obama believes that if we do not act quickly, this recession could linger for years – and America could lose the competitive edge that has served as the foundation for our strength and standing in the world.

That's why the President has put forth an American Recovery and Reinvestment Plan that will jumpstart job creation and long-term growth by:

• Doubling the production of alternative energy in the next three years.
• Modernizing more than 75% of federal buildings and improve the energy efficiency of two million American homes, saving consumers and taxpayers billions on our energy bills.
• Making the immediate investments necessary to ensure that within five years, all of America’s medical records are computerized.
• Equipping tens of thousands of schools, community colleges, and public universities with 21st century classrooms, labs, and libraries.
• Expanding broadband across America, so that a small business in a rural town can connect and compete with their counterparts anywhere in the world.
• Investing in the science, research, and technology that will lead to new medical breakthroughs, new discoveries, and entire new industries.

On January 8th, 2009 -- less than two weeks before taking office -- President Obama spoke on the need for urgent action on his American Recovery and Reinvestment Plan to save or create over 3 million jobs while investing in priorities like health care, energy, and education that will jumpstart economic growth. The plan represents not just a new policy, but a new approach to meeting our most urgent challenges.

Note: Word is that "investment" is the Democratic euphemism for government spending. Focus groups evidently prefer that language by a wide margin.

We've got a recession, Obama says, so we need to stimulate the economy to end the recession. Great. With you there, Mr. President.

If we don't stimulate the economy then we could lose our "competitive edge." Hmmm. I don't know why that would follow from a recession unless we're in a recession that other countries aren't experiencing. From what I can tell, pretty much the whole world is getting the opportunity to experience this one right along with us.

Did the president just use the recession to justify addressing a separate social concern? That is, our ability to compete globally? Do we look like suckers?

So then we look at the outline of the president's plan. He wants to stimulate job creation. With you there, Mr. President. How do you propose to stimulate job creation?

• He wants to subsidize less efficient energy sources (which will almost certainly make energy costs rise).
• He wants to make homes and businesses more energy-efficient. At least that will help offset the higher prices promised by his first initiative. On the other hand, it's going to take energy to save energy, so this idea looks like an overall loss.
• He wants to computerize medical records. Look out, economy. Watch the boom from this one. I'll be watching the ACLU response to this one. Can we trust the government with our private information? Or are medical records no big deal whereas cell phone conversations are sacrosanct? Seriously, this one doesn't look like a big boost for the economy and it figures to put some persons who work in medical records out of work.
• He wants to modernize schools. Again, where are the jobs from this? Looks like a sop for the teachers unions.
• Expand broadband access. Won't that take time? And even if it gets done quickly, businesses don't compete simply by having broadband access. It takes either money or computer savvy to compete on the Web.
• Invest in science and research. Aren't we doing that already? Perhaps he's saying that the government will borrow money and spend even more on reseach. The researchers are bound to like it. They'll have jobs. But this one is clearly focused on the long term.

And that's it. That's the plan. Good-bye recession based on this? He must be joking. He didn't even mention the good ideas that he passed on to Congress. Tax cuts. There's something that will stimulate the economy in the short term. Why not mention it on your Web site, Mr. President?

The St. Petersburg Times celebrates Obama victory on stimulus package (Updated x2)

Curious about the coverage of the stimulus bill in the The St. Petersburg Times, I went in search of its online coverage.

Wes Allison wrote the news story, which amounts to a qualified celebration of "a resounding victory for Barack Obama."

Unfortunately I can't be surprised at coverage that omits criticisms of the bill from the Congressional Budget Office and "a range of respected economists." At least not from the Times.

This is a front page story, mind you, without any discernible "news analysis" or "opinion" tag. So the straight news is telling us that Obama achieved "an impressive display of political muscle and congressional pliability just three weeks, three days into his presidency."

"Impressive." Reads like editorial judgment to me. "Just three weeks, three days." Almost as if the writer is informing you that such impressive victories are extra-impressive if they come early. Again, an editorial judgment.

And not just any editorial judgment. Allison serves up editorial judgment at odds with much of mainstream punditry, which sees Obama as having misstepped in a number of ways depending on who makes the editorial judgment.

No worries, Times readers. The new pres is doing a fine job, even if the old press has lost any knack for objectivity it once possessed (look for a subsequent post exploring the use of "impressive display" in the news).

So we have a clue where Allison stands regarding Obama. The rest of the story tends to reinforce the slant.


Paragraph 5:

(D)espite Obama's aggressive outreach. Republican leaders pounded the package ...

Obama's "aggressive outreach" consisted of nothing more than an initial plan calling for a considerable role for tax cuts as part of the stimulus package along with make-nice meetings with Republicans. Obama then handed the bill off to Democratic leaders in Congress, who promptly made it a considerably more partisan bill. More on that later. Meanwhile, "aggressive outreach" passes for gross and misleading hyperbole.

Paragraph 6:

Clumsy infighting over spending cuts demanded by the relatively narrow Democratic margin in the Senate nearly caused a revolt among liberal Democrats in the House, just as House and Senate negotiators were gathering to ink the deal.

Hopefully Allison refers to the margin in the voting, for the party margins in the Senate haven't been this wide since 1979. Allison's earlier statement about the "impressive victory" seems ridiculous in that light. Practically all Obama has to do is please all the Democrats and he can pass whatever he likes through the Senate.

But then we get to paragraph 8:

All of which combined to take some of the luster off Friday's passage and speaks to the relative inexperience of the Obama administration, even though the president, vice president and their top aides all came from Capitol Hill.

Now he tells us! Thank heavens for the inverted pyramid structure and newspaper readers' not coincidental tendency to pay greatest attention to the first few paragraphs. Though this paragraph communicates a key aspect of the politics surrounding the stimulus bill, Allison's lead omits any hint of it.

The next few paragraphs descend into the bizarre.

Allison thinks Obama "miscalculated" (objective judgment?) by not stumping for the plan in public to counter Republican attacks on the bill. Again, given that congressional Democrats worked over the bill to get rid of most of its initial bipartisanship, how was Obama supposed to defend the changes without shooting himself in the foot? Allison's account explicitly suggests that the Republican attacks on the bill were largely unfounded ("some false"--no examples, as far as I can tell). Somehow the Associated Press, not exactly Fox News, found an array of reputable economists to disparage the bill, albeit the version Obama will sign into law. The early version certainly drew its share of criticism from economists, however.

As the story progresses, the story leaks more mitigating detail, even slipping in another editorial judgment that House Republicans were "justifiably" piqued when Pelosi largely cut them out of the legislative process. Allison says "some Republican amendments were eventually adopted." THOMAS, a government Web site established partly to aid in tracking legislation, and Opencongress.org only list eight House amendments to HR 1 ("American Recovery and Reinvestment Act of 2009").

In order:
14 (actually 95, judging from the description), offered by Bill Shuster (R-PA). Passed.
16 (actually 109, judging from the description) offered by Randy Neugebauer (R-TX). Failed.
17 (actually 172, judging from the description), offered by Maxine Waters (D-CA). Passed.
18 (actually 132, judging from the description) offered by Jeff Flake (R-AZ). Failed.
19 (actually 198, judging by the description), offered by Larry Kissel (D-NC). Passed.
20 (actually 22, judging from the description), offered by Todd Russell Platts (R-PA) and Chris Van Hollen (D-MD). Passed.
21 (actually 188, judging from the description), offered by Aaron Schock (R-IL) and Adam Smith (D-WA). Passed.
22 (actually 195, judging from the description), offered by Dave Camp (R-MI) and Eric Cantor (R-VA). Failed.

Shuster's bill does not seem particularly significant. One wonders which Republican amendments Allison had in mind. Perhaps he considered amendments proposed by Republicans in the Senate, after the bill was out from under Pelosi's thumb.

Descriptions and alternative numbers obtained here.

Most of the remainder of the story consists of spin cautioning against a premature obituary for Obama bipartisanship. That aspect of the story somewhat contradicts the lead. One could say that Allison puts his big "but" at the end of the story.


Update:

Power Line serves up the perfect accompaniment to my post, complete with a nifty cartoon from Michael Ramirez.

Update 2:
Corrected a few typos and rephrased a sentence or two to slightly moderate my criticism of the news story.

Whither the economy, whither Barack?

WASHINGTON - U.S. retail sales jumped 1 percent in January, reversing a six-month declining trend and defying economists’ expectations by posting the biggest increase in 14 months.

The data are a glimmer of hope for a recession-hit economy, but higher gasoline prices and sales, and buyers snapping up other items on post-holiday discounts, appeared to aid last month’s results. Analysts cautioned that the relief is unlikely to last.
(Associated Press)

I've been saying (not in print) that I believed the government did enough with Tarp I to keep lending markets from freezing up. I've also been saying that I think the U.S. culture is so enamored of buying things that not even the economists and mainstream media in concert can stop them.

But this isn't an "I told you so" post. Not exactly.

I'm not as sure about it as I was.

I think the GOP push to assist the home-buying market would have been the most effective part of a stimulus plan, since it should have established some kind of floor under home values thrown into flux. In turn, that would start the revaluation of securities currently valued in terms of either zeros or question marks. I heard that on Hugh Hewitt's radio program and it makes sense to me.

The stimulus bill we're getting looks like a stinker to me. I don't see much real economic stimulus in it, but I do see quite a few pet Democratic programs, as though the idea was "We need to spend, so bring out your Christmas lists!"

I think government and media have produced a climate in which consumers are largely in a waiting mode, seeing what the government will do before they make large purchase decisions. One would be relatively foolish to buy a house right now if the government is going to make it much easier in six months. That's just common sense.

President Obama has made the situation worse by predicting calamity if (what we can now call his) stimulus bill fails to pass.

On the other hand, his speech appeared to boosts the popularity of the package, and if that sparks consumer confidence (even if the focus of that confidence is poorly founded), the overall effect may be positive in the short run.

Politics being what it is, even if the Democrats make the economy worse and prolong the recession there is no guarantee that it will hurt them politically. How do you judge the effectiveness of a stimulus package? The most popular methods involve post hoc ergo propter hoc, the practice of attributing what comes after to what came before, and cum hoc ergo propter hoc, where if two things happen at the same time one figures to have caused the other. Both are logical fallacies, though it is important to note that correlation of events does remain our best clue to establishing cause. It's just that a sample of one is a poor way to establish causation.