Media Matters flunks math

Media Matters for America is hoping its readership is not very good at math:

Neil Cavuto kicked off his Fox News show with this misleading image suggesting that the stimulus is responsible for 1.8 million lost jobs:

In fact, multiple non-partisan studies have said that the stimulus  saved or created millions of jobs. The Congressional Budget Office estimates that the stimulus raised employment by 1.4 to 3.6 million and the White House Council of Economic Advisers estimates that the stimulus increased employment by between 2.1 and 2.5 million.

However, according to the Bureau of Labor Statistics the unemployment rate has increased nearly a full percentage point since the American Recovery and Reinvestment Act of 2009 was signed into law by President Obama, from 8.2 in Feb of 2009 then the bill was signed, to 9.1 in May of 2011.

Most people realize that when the unemployment rate increases, that means more people have no job.  When jobs are created or saved, that should translate into the unemployment rate going down or remaining the same.

Comments

  1. Terrance H. says:

    Media Matters is such a joke.

  2. John,
    I think what MM is trying to illustrate is that the FN statistic is misleading. Surely you are capable of simple math, even if we are dealing with some abstract numbers.
    If I take out a loan on my credit line for $30,000, and it accrues interest at a rate of 3.5% per annum, and I make no payments for 6 months, I will have accrued $520 in interest. If I made payments in the amount of $50 a month, then I will still have a balance above the $30000 principle amount of the loan, yet I would have accrued less interest than $520 in those 6 months.

    Your point here is that we must only pay attention to the net amount of jobs and not the net difference between the projected job losses and new jobs created or saved.
    I still think Obama has been less than stellar in his overall management of the economy, but I think it is you who is not understanding simple math.

    • Unfortunately unemployment statistics do not grow with interest. The fact is that even if some jobs are lost and some are gained, then the number of people unemployed remains the same. If the number of people unemployed goes fown, then the amount of jobs have increased.

      MM wants to claim MILLIONS of jobs have been created or saved dispite the number of jobs lost has increased. If the jobs have been saved and created at the same time, then at best the rate remains unchanged if not decreases.

      They are playing hard and loose with the numbers.

  3. I’m not suggesting that the Democrats should be patting themselves on the back, or that they have nothing to answer for.

    I am suggesting that if the stimulus created 3.5 million jobs, and the soft economy was bound to shed 4.8 million jobs, then there is still a deficit of 1.3 million. One person can call that a failure, and one can call it a success.

    The reality is that in your quote from MM, it never gives any context to the numbers that would be misleading, and barring watching the Cavuto piece for context, I cannot say the same for your screenshot.

    • The screen shot was from MM, I included it for reference.

      But if we use your description, say you had a job where you earned $50k a year, and you wanted to leave for another job that claimed it would save or earn you money but paid $30 k per year. Your description says technecally the new job earned you $30k, but in reality, aside from nuanced numerical technicalities, your new job lost you $20k.

  4. About the screenshot: I was only trying to be fair by saying that the Cavuto piece might contain more context than that screenshot implies; I was not faulting you at all.
    Your analogy is faulted. If I had a job where I earned 50K, and they were willing to keep me on for 10K, but I took another Job for 30K, technically I’m losing 20K, but compared to doing nothing, I’m better off. That is analogous to this discussion, not your example.

  5. Doesn’t yours assume it wasn’t?

    I understand we are dealing with “what-if”s here. Nobody can claim with certainty what unemployment would look like without stimulus. Not without voodoo economics.
    I would definitely require a significant case to be made before I would concede that the stimulus had a net negative effect. This just seems like another case of reading what we want from raw data.

    • Possibly. But even if it “created” a million jobs, but there was a net loss of a million, and the administration promised that with passage unemployment would not rise above 8%, I’d say its a pretty good indication it was not good for the economy.

  6. How do they count a job saved? Isn’t that like taking credit for something you didn’t do?

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