The Obama White House stumbled this fall when it issued an ill-advised press release claiming that the $787 billion federal economic stimulus plan had “created or saved 650,000 jobs.” This resulted in media criticism over the simple-math conclusion that each of those jobs cost $1.2 million.
Then the White House clarified its position. Those jobs were really affected by only one part of the stimulus package – the $150 billion that had been transferred through … about September. That meant that each of the jobs”created or saved” (itself an obfuscatory phrase) actually only cost $230,000.
After that, White House economist Christina Romer stood in front of cameras and hedged away from any jobs claim, mumbling some nonsense about how “it’s very hard to say exactly because you don’t know what the baseline is, right, because you don’t know what the economy would have done without” the stimulus billions.
As the Washington Examiner pointed out, it would have been more efficient to open a special unemployment office that issued checks for $230K to the first 650,000 unemployed people who could fog a mirror.
The lesson: statists have no bloody idea how to connect their boondoggles with practical outcomes. Their first assumption is that people are too stupid to divide expenditures by claimed results. Their response is to debase all data with confused spin.
In the meantime, markets speak with clarity. In late October, the Boeing Corp. gave the state of Washington a nasty Halloween present. CEO Jim McNerney announced that the company was locating its new plant (designed for building the oft-delayed 787 Dreamliner jet) in South Carolina.
The addled twits who run Washington politics – embodied, in this case, by inexplicable Gov. Christine Gregoire and halfwits-need-representation-too Sen. Patty Murray – claimed”shock, dismay and outrage” at Boeing’s move.
In 2002, Alan Mulally (who was at the time executive VP at Boeing and CEO of Boeing Commercial Airplanes) told the Washington State House Labor Committee that “the state of Washington is not competitive…. meaning it costs us more to operate [here].” Specifically, he mentioned the state’s inefficient unemployment insurance and workers’ comp systems. He didn’t mention the screwed-up labor union situation, but he was probably thinking it.
Boeing’s Everett, Washington factory has had to weather strikes by its machinists’ union four times since 1990. The most recent strike – a 57-day shutdown in 2008 – cost Boeing over $5 billion in deferred revenue and (additional) delays in production of the 787. The union eventually caved on its absurd demands for higher wages and richer perks. But the damage was done.
In the pretend world of Beltway policy, billions of dollars can be explained away by inarticulate economists. In the real world of building airplanes, a $5 billion opportunity cost means that things change. Production lines move to right-towork states.
And more than one Boeing analyst predicted that, when demand for the 787 softens, the Everett plant will be the first to be shut down.
Statist union agitators can try such threadbare tricks as “card check,” vote-counting manipulation, and shop floor intimidation. But these are a loser’s tactics. They lead to desperate nonsense about jobs”created or saved” and mumbled evasions about how the numbers don’t really mean anything. In the meantime, the featherbedding collectivists of the International Association of Machinists and Aerospace Workers, AFL-CIO, District 751, have fewer stooges from whom to steal.