The Propaganda Of Glenn Reynolds

He's still re-printing, as if it means anything about the Obama record, the Obama administration's predictions of future growth and employment from January 2009. He uses the discrepancy between the prediction and the reality to argue that the stimulus didn't work. What he ignores – and has ignored in his propaganda from Day One – is that the forecast was based on a badly wrong statistic, believed by both the public and private sector at the time. Back then, the consensus was that the economy had shrunk some 3 percent in the last quarter of 2008. That was the data on which Romer at el based their predictions. We now know the recession was far worse – with a decline in the fourth quarter of 9 percent – three times the contemporaneous assumption.

So all the graph shows is what happens when you input a core piece of data that is off by 300 percent or so in the month before you take office. Maybe the Obama administration should have guessed better. But the data is designed to be independent of political meddling. And in the original prediction, we find the following caveat:

Second, as emphasized above, there is considerable uncertainty in our estimates: both the impact of the package on GDP and the relationship between higher GDP and job creation are hard to estimate precisely. In light of the substantial quarter-to-quarter variation in the estimates of job creation, we believe a reasonable range for 2010 Q4 is 3.3 to 4.1 million jobs created.

A footnote to the passage above warns:

These estimates, like the aggregate ones, are subject to substantial margins of error.

So what Reynolds argues is evidence of Obama's incompetence in government is rather evidence of how bad the economy was in the last months of the Bush administration, and how government and private sector statistics badly misjudged the severity of the downturn. A near-nine percent collapse in GDP in one quarter is not a normal recession. It's near total collapse, actually. But all of it, and all the debt that automatically accrues as a great recession intensifies, is Obama's fault in Reynolds' version of history. Even though the report Reynolds cites includes caveats about the margin of error in estimates of growth and employment.

Pathetic. But it's all they've got.