Stevenson Makes 'Nuanced' Defense of Obama's 2009 Prediction of 6.5% Unemployment
In 'Missed Jobs Forecast in 2009 Resonates in Campaign,' Richard Stevenson's 'Political Memo' buried in the Saturday Business section, the paper's political editor mounted a defense of Obama's prediction of 6.5% unemployment and his "stimulus" package, while regretting that the administration's 'nuanced' argument would be buried by misleading Republicans.
Ten days prior to Mr. Obama's taking the oath of office in January 2009, his economic team released a report outlining the estimated benefits of the $775 billion stimulus plan he was seeking. The projections were quite specific. The stimulus legislation passed just a few weeks later at about the size the White House had sought. Had all gone as promised by the report, the unemployment rate right now would have been around 6.5 percent, heading down to around 6 percent by the end of this year and a little over 5 percent at the end of next year.
Of course it didn't turn out that way: 'The Labor Department announced Friday that the unemployment rate for October was 9 percent, down from 9.1 percent a month earlier...The Federal Reserve has already projected that the unemployment rate will be at least 8.5 percent at the end of next year...' Stevenson then noted sourly the 'conservative assault' on Keynesian economics and activist government:
The gap between the projections his team made in early 2009 and the grim reality of the last three years has produced a substantively debatable but politically powerful argument for Republicans. It has helped rally conservative opposition to most of Mr. Obama's subsequent agenda, and going into the thick of the presidential race it has become the primary basis not only for the Republican case against a second Obama term but also for the most intensive conservative assault in decades on Keynesian economics and the role of government.
Sometimes in factually exaggerated ways, Republicans on the campaign trail are using the busted projections to assert that the stimulus bill failed, that government cannot create jobs and that it is time for less spending rather than more.
And for those interested in the underlying economics, there's a persuasive case that the report actually did not get it all that wrong. While the report seriously underestimated the severity of the recession and therefore the job losses the nation would suffer in 2009, it was proven right in its basic point that the stimulus plan would yield substantial job-creation compared to doing nothing. In other words, it was correct in projecting a significant, positive impact on jobs from the stimulus spending, but wrong in its assumptions of the depths of the job-loss hole the stimulus was trying to fill.
Despite repeated Republican claims to the contrary, the stimulus bill created at least hundreds of thousands of jobs, according to nearly all nonpartisan analysts, including the Congressional Budget Office.
But it's impossible to compress the nuance onto a bumper sticker. As a political matter, Republicans have used the shortfall relative to the projections to establish a narrative that the stimulus failed, and with it Mr. Obama's presidency. To the White House's intense frustration, the chart showing the early 2009 projections has become the centerpiece of the closing Republican argument against Mr. Obama's re-election and against the economic policies his party stands for, including the jobs package Congress is debating and largely rejecting now.
Stevenson also admired Obama's nuance in a January 31, 2010 Week in Review piece:
On this much, President Obama's friends and foes could agree: He eludes simple labels....In a world that presents so many fast-moving and intractable problems, nuance, flexibility, pragmatism - even a full range of human emotions - are no doubt good things. But as Mr. Obama wrapped up his State of the Union address on Wednesday night with an appeal to transcend partisan gamesmanship, he was plaintively testing a broader proposition: Is it possible to embrace complexity in a political and media culture that demands simple themes and promotes conflict?