Has it really been five years since President Obama thrilled the known world with his $787 billion (give or take a few tens of billions) American Recovery and Reinvestment Act?
ARRA, which succeeded in permanently irradiating the word “stimulus” (a concept that I recall being taken seriously as long ago as the G. H. W. Bush administration and that has a Keynesian pedigree going back at least to the 1930s), is one of those catastrophes that has been rendered quaint by the cataclysms that followed it. Given a choice between the fundamental transformation of Obamacare and a simple waste of money like ARRA, most of us would choose the latter — though with Obama you get both.
But as we chuckle over old photos of ourselves wearing our circa-2009 love beads and Nehru jackets, it’s worth remembering how abysmally the stimulus failed even by its own fairy-tale standards.
To wit: Throughout the period of the ARRA stimulus, and continuing until today, the U-3 unemployment rate has been higher than the worst-case scenario the Obama brain trust projected would occur if the stimulus had not been passed.
Administration flunkies like Jared “That Ain’t Nothing” Bernstein, former economic guru to Vice President Biden, tried gamely to combat this hard truth by creating what amounts to a second counterfactual, in which things would have been even worse without the stimulus. But nobody ever bought that, and ARRA has become, like all of Obama’s fondest achievements, another thing polite people don’t talk about. To the extent that it is just a little easier today to resist the Keynesian religion, the manifest failure of the stimulus is a big reason.
Back in the day, many of us participated in tracking how many jobs were being saved/created/funded in our own neighborhoods by this massive expenditure of taxpayer dollars. Here’s one of my contributions, an article for LA Weekly checking the results in Hollywood against the claims on view at Recovery.gov, the most transparent administration in history’s advertisement for the stimulus. With half of ARRA funds disbursed, Hollywood got a total of $23,338,327, in exchange for 21 full- and part-time jobs. That’s $1,134,580.80 per job. Things did not get any better from there.
Keynesian claims are faith-based and thus impervious to anything as vulgar as evidence. But the ARRA stimulus may have marked a subtle turning point in public gullibility about government job-creation claims. As Zhou Enlai said of the French Revolution, it’s still too early to tell. In any event, the discrediting of stimulus is one thing to be slightly optimistic about on this unhappy fifth birthday.