Professor Cole's Finance Blog: Alice in Obama-Land, or How I Saved 2 Million Jobs

Before I’ve even had the chance to see Tim Burton’s new rendition of the classic “Alice in Wonderland,” I have had the chance to peer down the rabbit’s hole, not into Wonderland, but into Obama-land.

Obama-land is a fantasy world where up is down and down is up; where a trillion-dollar health care bill is projected to reduce the natiotal debt; and where 2 million jobs were “saved or created” during the same period of time when almost 4 million U.S. workers lost their jobs. Yes, Obama-land is a magical place that is "long on fantasy" and "short on facts," just like Tim Burton's fantasy world.

This morning, President Obama and Vice-President Biden took a victory lap—celebrating the one-year anniversary of the Stimulus Act of 2009. In his prepared remarks, the president claimed that “the Recovery Act is responsible for the jobs of about 2 million Americans who would otherwise be unemployed” and that “it is largely thanks to the Recovery Act that as second depression is no longer a possibility.” Of course, the President provides no facts to support these statements, but instead refers to unnamed “nonpartisan economists across the spectrum.” Certainly, far-left-leaning Paul Krugman of the New York Times might be one of these economists, but I know of no right-leaning, or even center-leaning, economists who possibly might fit this description. Like the 2 million “saved jobs,” this is just another Obama fantasy. Into the "rabbit hole" we go.

Let’s look at the facts instead of fantasy: According to the Bureau of Labor Statistics (“BLS”), 3.9 million U.S. workers have lost their jobs since Obama took office on January 20, 2009, and another million unemployed workers have given up looking for a job, thereby falling out of the official labor force. The number of chronic unemployed—those out of work for more than 26 weeks—has more than doubled from 2.7 million in January 2009 to 6.3 million in January 2010. Currently, there are 14.8 million unemployed U.S. workers, and another 10.5 million who have given up looking for work or been forced to take on part-time work when the would like to work full-time.

It is against this bleak backdrop that Obama takes his victory lap with his nonsensical claim of 2 million “saved jobs.” The BLS publishes no such statistic, and most economists will tell you that it is essentially impossible to “measure” a “saved job.” And yet the lamestream mainstream media dutifully reports this fantasy statistic without question.

Can you imagine how the media would have responded if, following the invasion of Iraq, former President Bush had proclaimed that he had “saved 2 million lives” by removing Saddam from power? Of course, he would have been pilloried for such fantasy. Obama, however, gets a free pass because most of the mainstream media are as left-leaning as is this President.

Also somewhere lost in the celebration was a January 26, 2010 report from the Congressional Budget Office documenting how cost estimates for the stimulus have risen by $75 billion over the past year due to unexpectedly higher costs for unemployment compensation payments, food assistance payments and interest payments from states on taxable government bonds. It is relatively safe to predict that this cost estimate will continue to escalate over time. Remember that the “cash for clunkers” program tripled in cost from its initial estimate, as did the “first-time homebuyer tax credit.” Before all is said and done, the stimulus bill is likely to cost U.S. taxpayers more than $3 trillion.

The late great Senator from New York Daniel Patrick Moynihan once famously said in a debate: Everyone is entitled to his own opinion but not his own set of facts.”

If only President Obama and Vice-President Biden would take note and speak accordingly.