Liberal Media Skip Study That Found Stimulus 'Forestalled or Destroyed' A Million Private-Sector Jobs

May 20th, 2011 2:17 PM

On the front page of Wednesday’s Investor’s Business Daily, reporter David Hogberg reported that a new study found President Obama’s “stimulus” plan “may have destroyed or forestalled employment, including more than 1 million private-sector jobs.”

Destroyed or forestalled? Our media only cites studies which estimate the number of jobs Team Obama “saved or created.” Economists Timothy Conley of the University of Western Ontario and Bill Dupor of Ohio State University showed the “stimulus” saved 443,000 government jobs, but caused a net loss of more than a million jobs. This is one of those studies only Fox News noticed. But on CNN’s American Morning on Thursday, a Time magazine editor was still calling for more “investment” in infrastructure:

KIRAN CHETRY: I remember when we were talking about the stimulus, obviously, that's become a dirty word because of our debt and our deficit and all of that. We were talking about that which would help in the short-term but eventually lead to long-term success. What happened to all of the infrastructure projects? Things we were talking about to get people working again but also improve the country.

RANA FOROOHAR, TIME MAGAZINE: I think what happened is politics. We have an incredibly co contentious environment in Washington. There is a continuous growth as Fareed [Zakaria]  mentions. We could spend $2.2 trillion on infrastructure in this country and put a lot of people to work.

On that morning, an IBD editorial on the Conley-Dupor research underlined that infrastructure jobs actually declined:

A new study by economists Timothy Conley of the University of Western Ontario and Bill Dupor of Ohio State found that despite the influx of all that federal money, highway construction jobs actually plunged by nearly 70,000 between 2008 and 2010.

As the authors explain, many states simply took the free federal money and shifted their own highway funds to meet other needs. In fact, in some states, highway spending dropped, even with the added federal money.

Examples cited in the study:

Texas got $700 million in highway stimulus funds last year, but spent $560 million less on its roads in 2010 than it did in 2009.

New York's highway spending was basically unchanged between 2009 and 2010, despite getting $522 million more in federal highway bucks.

Michigan boosted its highway spending just $17.4 million, far below the $189 million extra the feds handed the state for highway improvements.

The Department of Transportation, meanwhile, found that 21 states weren't abiding by rules meant to prevent just this sort of shell game.
No wonder Ernst & Young's Urban Land Institute concluded in a report out this week that the stimulus "did not meet the public's inflated expectations for game-changing economic improvements" and that the nation's highway system is still in serious trouble.

On Wednesday’s Fox and Friends, they discussed this study on the air:

KEVIN HASSETT, economist, American Enterprise Institute:  I think that one of the big stories is that government workers are destructive. And so if a government worker loses his job, it's good for the economy. I think if you look at the study, it looked at variation across states in stimulus spending and then found that the places that got less stimulus spending are doing a lot better now. And so I think that we wasted a heck of a lot of money.

I remember back then when they were creating the stimulus, thinking gees, we'd be better off if we let Charlie Sheen develop an economic stimulus. And now we're seeing the truth -- the proof is in the pudding. And in fact they didn't create many jobs.

GRETCHEN CARLSON: Wait, clarify what you mean about a government job that's destructive.

HASSETT: Well, basically, imagine if you're trying to have a new addition in your house then you've got to get the permit guys to agree to do it, and the more permit guys there are, the harder it is to do. And so it seems like when a government worker loses his job, it ends up being good for the private sector and each government job that was destroyed because we didn't send stimulus money to that state. They actually created two private sector jobs.

Fox went into some deeper study details:

CARLSON: Another interesting stat is that the study looked at 46 of 50 states and what happened. So in other words, the states mostly Democratic by the way that got this stimulus money, then they are the ones who did not have the higher growth in private jobs.

HASSETT: Yes, that's right. In fact, this is one of the most partisan bills ever. In a study we did at AEI recently we found that the safe Democratic districts got almost twice as much stimulus money as Republican districts and so the Democrats were really partisan.


HASSETT: They thought they were saving their districts and harming Republican districts, but in fact they did the opposite.