White House Gives Up Counting Jobs "Saved or Created"

President Obama's promise of transparency and quixotic ambitions for the 2009 stimulus has created or saved a lot more bad press than the White House anticipated.

In January the White House promised to keep a running tally of stimulus jobs. One year later, beset by controversies, mini-scandals and major disappointments, the administration is nixing the cumulative counting in favor of a monthly tally of jobs associated with stimulus projects -- even if the jobs weren't in danger of being "lost" at any point.

This does not look good.

Consider the time line. In January 2009, Obama promised the stimulus would "save or create" (a slippery phrase that's descended into self-parody) 3.5 million jobs. Early indications revealed the actual pace of job creation was a third of that. The money was plentiful, but too slow. Despite billions of dollars, unemployment soared above the administration's jobless projections without the stimulus. Then came the scandals: One report found jobs in made-up Congressional districts, jobs counted (or double-counted) that simply never existed, and -- most colorfully -- a $890 shoe order that allegedly spawned nine new jobs.

Michael Grabell explains how this new rule will change the numbers:

With tens of thousands of recipients now scrambling to meet the Jan. 15 deadline for the next report, the new guidance could significantly change what the public sees. Some examples:

  • When Chrysler reported a $53 million contract to build 3,000 government vehicles last fall, it listed zero jobs [4] because it used existing employees to fill the orders. But under the new rules, those workers would have counted.
  • The Associated Press found that some recipients were counting pay raises [5] as stimulus jobs. That will be OK under the new rules, but only if they are counted as fractions of a job.
  • The California state auditor rapped the state corrections department [6] (PDF) for reporting 18,000 jobs instead of just 5,000 officers who had received layoff notices before stimulus money came in. But under the new guidance, the corrections department may have been right because stimulus money is helping it make payroll for all its employees.

Even though I expect this change to go down rough with the stimulus critics, I still think the stimulus has been extremely important. Economic analysts from Goldman Sachs and the American Enterprise Institute have both concluded that it added between two and four percentage points of economic growth in 2009. Now that we're growing at around 2 percent, that makes the stimulus the difference between a continued recession and a recovery. Even if you doubt the veracity of these conclusions -- and I think we should all be skeptical of most causal claims in economics along the lines of "X only happened because of Y" -- there are some departments where the stimulus has been critical. For state budgets especially, it has been crucial for Medicaid assistance and thousands of teaching jobs.

In short, I think the administration's foray into transparency was both noble and naive. I also continue to think the stimulus was much more the former than the latter.

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Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

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