The AP is releasing another interesting 'analysis' piece this morning examining the effect of the Stimulus on Local unemployment.
Spend a lot or spend nothing at all, it didn't matter, the AP analysis showed: Local unemployment rates rose and fell regardless of how much stimulus money Washington poured out for transportation,
Using my basic grammar skills I can point out how they cherry pick data. But even more transparently, I can see how they construct their article, trying to engineer an outcome. You see, I've worked in local news before, I know how news producers put together a story.
Disclosure: I am not an absolute supporter of solely infrastructure reinvestment as a means of economic stimulus. I would actually prefer more money doled out to the State Governments right now. My home states of New York and California are both facing horrible layoffs and deficits.
The basic premise is to find data and 'experts' to support your argument. But as evident in this piece, some experts don't always play along. That's when you change their context and minimize their conditional parts of their statements. (Emphasis added)
"My bottom line is, I'd be skeptical about putting too much more money into a second stimulus until we've seen broader effects from the first stimulus," said Aaron Jackson, a Bentley University economist who reviewed AP's analysis.
Mr. Jackson is basically saying, I'd be skeptical about making a decision until I see more data. He's not saying it doesn't work.
Furthermore this bit show very clearly what AP is doing, they're showing experts their own results of their study. We don't know what the economists are seeing.
To illustrate my point I'm going to show a great short film that I saw in my film school days. It's called Sour Death Balls by Jessica Yu
A great little short. When I first watched this film I wondered, why such extreme reactions? Didn't the people know they were going to eat something...surprising at the least? No. The filmmaker told them they were going to try something tasting like chocolate. That little fact makes you completely understand now the film in a different context. Context is everything. Back to the article.
A expert later says
"It would be unlikely that even $20 billion spent all at once would be enough to move the needle of the huge decline we've seen, even in construction, much less the economy. The job destruction is way too big," said Kenneth D. Simonson, chief economist for the Associated General Contractors of America.
Mr. Simonson is not even talking about the success of the Jobs for Main Street Act. He's talking about the hypothetical which the AP has supplied, and he's even offering a condition for his statement.
He's saying, We've lost too many jobs for $20 billion to have an effect on unemployment rates.
Really? Wouldn't that be an argument to spend more? The same article just said the current Jobs Bill is going to spend $75 Billion. Why didn't they ask the guy about $75 Billion?
Finally the crux of AP's argument relies on the basis that the money for roads from the Recovery Act hasn't created or saved any jobs. First of all barely a third of the Recovery Act money has been given out anyway, we're analyzing only %20 of the final package. We're studying the effect something that hasn't been fully implemented.
Kinda like studying a fence's effectiveness when only half of it has been built.
Secondly, the AP does little to actually connect the Stimulus to the rise or lowering of Unemployment.
They check counties with the most Stimulus VS those receiving standard Stimulus cash and find that both unemployment rates rose and fell independent of cash coming in.
Unemployment rates rose and fell despite what money came in? How? Money came in and people and unemployment rates stayed at 8%? How can you tell that money didn't save jobs in that instance?
When somebody studies statistics and says they can't find a relationship between two things- they're studying the wrong variables. Basically they couldn't make a connection and so they decide to deduce that there isn't one. Maybe they could have studied a town with a factory or business receiving Stimulus funds.
Actually, they research this exact point and get their thesis contradicted-
Obama's stimulus is paying the salaries of dozens of workers, but local officials said the unemployment rate continues to rise and is expected to top 20 percent soon. The new money for road projects isn't enough to offset the thousands of local jobs lost from the closing of manufacturing plants and automotive parts suppliers.
Obama's Stimulus is paying "dozens" of salaries but isn't helping generate jobs?
Road construction dollars from the Stimulus won't lower unemployment percentages until all the money is shelled out. It would take hundreds of thousands of jobs created to change the unemployment percentage. And unfortunately we've been losing too many jobs for too long now, that the parts of the Stimulus out there are barely keeping people afloat.
The AP really should have titled this article, Not Enough Money Put Into Construction, Please Put More. They have definitely collected the data to support that argument.