The Corner

Re: Road Work

The administration has responded quickly to the AP analysis on the impact — such as it is — of stimulus spending on unemployment in the construction sector. Obama Transportation Secretary Ray LaHood took to the White House blog this afternoon to criticize the analysis for “the transportation stimulus jobs forest for the trees.”

LaHood’s defense is, strangely, centered on minimizing the importance of the transportation construction industry within the scope of the overall economy. He says that transportation building comprises “only two-tenths of one percent of the American employment” and “only a tiny sliver of the total construction picture.”

The target of the stimulus dollars in question, the secretary says, was not the construction industry as a whole but only this tiny sliver. Though LaHood provides no data showing an impact on unemployment even in that slice of the sector, he does note that transportation construction spending is up by 18.8 percent from last year (which, presumably, is what is supposed to happen when the federal government directs that billions of dollars be spent on transportation construction). And he suggests that the spending “is reducing that drastic shortfall in other public transportation spending, making it possible for tens of thousands of workers to retain their jobs and never even hit the unemployment rolls.”

But the distinction between creating and retaining jobs is raised in the AP analysis itself:

“As a policy tool for creating jobs, this doesn’t seem to have much bite,” said Emory University economist Thomas Smith, who supported the stimulus and reviewed AP’s analysis. “In terms of creating jobs, it doesn’t seem like it’s created very many. It may well be employing lots of people but those two things are very different.”

Daniel FosterDaniel Foster is a former news editor of National Review Online.

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