Fox's Gregg Jarrett used a report produced by Obama's economic advisers to claim Obama had promised unemployment “would now be 5.6 percent” ; but the report was produced before the release of data showing the recession was much worse than previously estimated. Jarrett and his guest Art Laffer also suggested Obama's policies have acted as an economic “depressant” rather than “a stimulus,” but there is broad agreement among economists that the stimulus helped boost GDP and lower unemployment.
Fox's Jarrett Claims Obama And Advisers Promised Unemployment Would Be 5.6 Or 6 Percent Today
Fox's Jarrett: Obama And His Advisers “Boldly Promised That If His Stimulus Passed, Unemployment Would Now Be 5.6 Percent.” On the September 7 broadcast of Fox News' America's Newsroom, co-host Gregg Jarrett interviewed Marjorie Clifton, a former consultant to the Obama campaign, about Obama's speech at the Democratic National Convention, Jarrett said:
JARRETT: Marjorie, you heard Obama, he said he never claimed [fixing the economy] would be easy or quick. Yes, he did, didn't he? He famously vowed he'd get it done in three years, and he and his economic team boldly promised that if his stimulus passed, unemployment now would be 5.6 percent. So, you know, Marjorie, he really wasn't telling the truth last night, was he? [Fox News, America's Newsroom, 9/7/12]
Fox's Jarrett: “Having Just Taken Office,” Obama And Advisers Predicted That Today Unemployment Would Be “Be Around 6 Percent Even If His Stimulus Was Not Passed.” Later during the broadcast, Jarrett discussed the same unemployment predictions with former Reagan adviser Art Laffer:
JARRETT: Art, let me take you back to early 2009.
LAFFER: Yes, sir.
JARRETT: The president, having just taken office, he and his economists predicted that unemployment today would be around 6 percent even if his stimulus was not passed -- not passed, mind you. [Fox News, America's Newsroom, 9/7/12]
But Jarrett's Claim Lacks Context: Those Predictions Were Made Before The Depth Of The Recession Was Fully Known
Estimates Showed GDP Growth Declining By 0.5 Percent In 3rd Quarter Of 2008. In November 2008, the Bureau of Economic Analysis (BEA) estimated that real gross domestic product declined by 0.5 percent in the third quarter of fiscal year 2008. Real GDP had increased by 2.8 percent in the second quarter of that year. [Bureau of Economic Analysis, 11/25/08]
NY Times: Analysis Predicting 5.6 Percent Unemployment Was Released Before Numbers For 4th Quarter Of 2008 Were Available. In 2009, The New York Times reported that the economic report by Obama advisers Christina Romer and Jared Bernstein was produced before fourth-quarter economic data for fiscal year 2008 were available:
But complicating Mr. Obama's efforts are the predictions of two of his own economic advisers: Jared Bernstein, the top economist for the vice president, and Christina D. Romer, the chairwoman of the White House Council of Economic Advisers. In January, 10 days before Mr. Obama was inaugurated, they released a report forecasting that the unemployment rate would remain at 8 percent or below in 2009 if the plan were enacted.
Mr. Bernstein, addressing reporters on Monday at a contentious White House briefing, conceded that his forecast had been “clearly too optimistic.” He said it had not taken into account figures from the fourth quarter of last year, because those numbers were not available at the time. [The New York Times, 6/8/09]
In March 2009, Obama Advisers Released Estimate Showing Economy Shrank By 6.3 Percent At The End Of 2008 -- Nearly Twice As Much As Previously Thought. In March 2009, the BEA estimated that real GDP had declined by 6.3 percent during the fourth quarter of 2008 -- nearly twice as much as BEA's “advance” estimate of 3.8 percent. [Bureau of Economic Analysis, 3/26/09]
McClatchy: Subsequent Revisions Showed Recession “Was Even More Damaging Than Previously Recognized.” On July 29, 2011, McClatchy reported on revisions BEA had released to its earlier estimates of economic measures from 2008-2010, writing:
The revision found that in 2008 the economy actually contracted rather than eking out a tiny gain as initially reported, and 2009 growth was almost a full percentage point slower than estimated earlier.
The quarterly percentage change in real gross domestic product was revised down for six of the 12 quarters reviewed. That means the Great Recession, already the worst downturn since the 1930s, was even more damaging [than] previously recognized. [McClatchy, 7/29/11]
The Economist: Revised Numbers Revealed “Shocking” GDP Contraction Of 8.9 Percent For 4th Quarter Of 2008. The Economist reported on BEA's revised numbers, calling the new data “shocking” :
The Bureau of Economic Analysis (BEA) revised its numbers back through the recession, revealing a downturn more serious than previously understood. The BEA's first estimate of output in the fourth quarter of 2008, published in January of 2009, showed a contraction of 3.8%, later revised to a 6.8% drop. The new numbers change the figure yet again, to a shocking 8.9% fall in GDP. For 2009 as a whole, the American economy shrank by 3.5% rather than the previously reported 2.6%. [The Economist, 8/6/11]
Jarrett And Laffer Suggested Obama's “Policies” Have Acted “As A Depressant” On The Economy
Jarrett: “Did The President's Policies Impede The Recovery By Making Matters Worse?” During his conversation with Laffer, Jarrett asked if the president's policies had made matters worse “by acting as a depressant instead of a stimulus” :
JARRETT: Let me take you back to early 2009. The president, having just taken office, he and his economists predicted that unemployment today would be around 6 percent even if his stimulus was not passed -- not passed, mind you. And instead, of course, it's 8.1 percent today, which invites the question, Art, did the president's policies impede the recovery, making matters worse by acting as a depressant instead of a stimulus?
LAFFER: Yes, they surely did. Thank you for -- you put it exactly correctly, Gregg. [Fox News, America's Newsroom, 9/7/12]
But Economists Agree Stimulus Boosted Employment And GDP
CBPP: Because Of Stimulus, “The Unemployment Rate Has Been Lower Each Year Since 2009 Than It Otherwise Would Have Been.” The Center on Budget and Policy Priorities (CBPP) produced a chart showing the real unemployment rate alongside CBO estimates of what the unemployment rate would have been without the stimulus bill from mid-2007 through 2012:
[Center on Budget and Policy Priorities, updated 8/30/12]
CBPP: “GDP Has Been Higher Each Year Since 2009 Than It Would Have Been Without The Recovery Act.” The CBPP post also featured a chart showing real GDP alongside the Congressional Budget Office's (CBO) estimates of what GDP would have been without the stimulus:
[ “Chart Book: The Legacy of the Great Recession,” Center on Budget and Policy Priorities, updated 8/30/12]
Congressional Budget Office: Stimulus Boosted Economy By Up To 4.1 Percent In 2010, 2.3 Percent In 2011. In its May 2012 report, the CBO estimated that the Recovery Act increased real GDP by between .7 percent and 4.1 percent in 2010, and by between .4 percent and 2.3 percent in 2011. [Congressional Budget Office, May 2012]
CBO: Stimulus Created Equivalent Of Up To 4.7 Million Jobs In 2010, Up To 3.6 Million In 2011. The May 2012 CBO report also found that the stimulus created the equivalent of between 900,000 and 4.7 million jobs in 2010 and the equivalent of between 600,000 and 3.6 million jobs in 2011. [Congressional Budget Office, May 2012]
Wall Street Journal: 70 Percent Of Economists Surveyed Said Stimulus Helped. The Wall Street Journal reported in March 2010 that 38 of the 54 economists surveyed “said the American Recovery and Reinvestment Act boosted growth and mitigated job losses, while six said the legislation had a net negative effect.” [Wall Street Journal, 3/12/10]