Obama and the stimulus: A reader’s research sheds new light
Earlier this week, we focused on a statement by Mitt Romney that “three years ago, a newly-elected President Obama told America that if Congress approved his plan to borrow nearly a trillion dollars, he would hold unemployment below 8 percent.”
We had examined this issue before, and were prompted to look at it again by a reader who had publicly challenged Romney to prove that Obama ever said this. We gave Romney Three Pinocchios for his claim, largely because this “eight percent” figure stemmed from a chart in a paper written before Obama took office, not Obama’s own words.
However, several readers wrote that we were being overly narrow in our interpretation and thus were too critical of Romney. And one reader supplied his own research to prove his point.
“I think your column usually is very good and generally even-handed,” wrote Jon Hoffman. “However, I think the effort to debunk the claim about the stimulus and unemployment is perhaps a bit too ‘legalistic.’ It may be true that the original projection was in a paper by two people who were not yet Obama administration officials, and if that were all there was to it, your case (and that of Chuck Smith) would be air tight.”
But then he supplied some YouTube clips that show that Obama “certainly alluded to such an effect.” We find his research interesting and we would like to share it with our readers. As always, we welcome thoughtful reader contributions and seek to highlight them whenever possible.
Here, Obama says that without his stimulus, "the unemployment rate could reach double digits." Presumably he wasn't promising that it would "only" top out at 9.9 percent, but at something significantly lower. So are people really wrong when they say that Obama led people to believe that the stimulus would keep unemployment around 8 percent or so?
Then there's this clip, where he promises “2.5 million more jobs by Jan 2011.” This isn't the famous “saved or created language,” but an apparent promise that there will be an increase in total employment by 2.5 million over the period from Jan 2009 to Jan 2011. As you can see from the first page of the BLS document for Jan 2011, it's readily apparent that total employment was negative for that period given that job losses far outweighed the few months of job gains.
Hoffman also shared with us a link to congressional testimony given by Christina Romer, one of the co-authors of the staff paper in question and by then-chair of the Council of Economic Advisers. Her testimony cited the staff report in a footnote (number 27) as the basis for the administration’s estimate that 3.5 million jobs would be saved and created. He said that this was evidence that the “Romer predictions were a lot more than simply the ramblings of two economists who weren't yet administration officials.”
This is Hoffman’s conclusion:
While Obama may not be on record as specifically saying that the stimulus would keep unemployment at or below 8 percent, any reasonable person listening to his speeches and presentations on the subject would come away with the impression that he believed and agreed with the projections of Romer, which were widely publicized at the time, and which the Obama administration never took pains to deny.
The Pinocchio Test
We are going to think about this some more and may revisit our earlier ruling on Romney’s statement. The Romney campaign choose not to defend his statement, but Hoffman has provided some very helpful, additional information that provides greater context for this claim. Obama still appears to have not said what Romney claimed he said, but Hoffman argues that a reasonable person—a key test for us—could certainly get that impression.
We’re going to throw this open to readers: Do you think we should reduce the number of Pinocchios we gave Gov. Romney?
UPDATE, March 22, 2012: We did change our ruling on this question to TWO PINOCCHIOS. Find out why by following this link.
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