CNN's Velshi: Stimulus Didn't Fail
CNN's business guru Ali Velshi argued that the stimulus did not fail, in a testy exchange Monday with CNN contributor Dana Loesch that followed President Obama's jobs plan speech.
"It failed!" exclaimed Loesch when Velshi mentioned the stimulus, to which he excitedly replied that it did not fail. That set off a back-and-forth between the two pundits, where Velshi argued that unemployment could have been higher without the stimulus – a rather tired hypothetical thrown around by liberals.
[Video below the break.]
Velshi also claimed that Americans were responsible for being duped by a conservative "cuts-only" approach to the deficit. "Americans have to be responsible for the fact that they have fallen for this line that the only way to reduce deficits is to cut spending," Velshi contended. Anchor John King added that such a narrow approach means that "'compromise,' 'consensus' has become a dirty word."
CNN contributor John Avlon argued in favor of Obama's jobs plan, with a compromise between the President and Republicans. "I do think people do feel the urgency now on the economy," he stated. "And when the President put forward a plan that was entirely bipartisan policy proposals, he was speaking to them."
"And so it becomes very difficult, I think, for Republicans simply to write this off as stimulus, too. Because people are feeling the economic pain, they want to see Washington be able to take action, which means putting some of the hyper-partisanship aside," Avlon added. "And then it really does put pressure on the Republicans as well. Can they politically oppose a plan that would create incentives for companies to hire returning Gis?"
A transcript of the segment, which aired on September 12 at 10:36 a.m. EDT, is as follows:
[10:36]
JOHN AVLON, CNN contributor: I do think people do feel the urgency now on the economy. Independent and swing voters in particular. And when the President put forward a plan that was entirely bipartisan policy proposals, he was speaking to them. And so it becomes very difficult, I think, for Republicans simply to write this off as stimulus, too. Because people are feeling the economic pain, they want to see Washington be able to take action, which means putting some of the hyper-partisanship aside. And finally, there's this. How cynical does it look for Republicans to oppose tax cuts, simply because they come from President Obama? That's a real practical problem, it's also a policy problem. So I think there is an obligation to act.
[10:46]
ALI VELSHI, CNN chief business correspondent: And even if you did settle it, this recession that we came out of, in theory, in the middle of 2009, was so deep and so immense and so global that you are not going to see a response from it. There are some people who have just come to accept the fact that this was long, it was deep, and it's going to take a long time to recover. The Federal Reserve had predicted that we would – and the White House – the White House had predicted that we'd get back to pre-recession unemployment levels, around 5 percent, by 2013. And boy, when we heard that, we thought really, 2013, that's a long way away. Now they're talking about 2017. The fact is, we're going to have to find something else. And you're right, it's not just politics, it's real policy.
[10:55]
VELSHI: You know, here's the problem, is that we are treating this – and to some degree, we have to hold the Tea Party responsible for this – we're treating it like it's a zero-sum game. The economy is not a balance sheet. The economy is dynamic, and if more people are working and paying taxes and demand is created, all of a sudden your deficits can reduce much more quickly than they can in a slow-growing, stagnant economy. So while we talk about cuts offsetting spending, that makes sense for most people. It makes sense in your household budget. This is why this isn't a household budget. If you can do something – if you can invest – invest, spend, whatever you want to do to get people to do more work, you can bring that deficit down faster than you can with just math.
[10:56]
VELSHI: Americans have to be responsible for the fact that they have fallen for this line that the only way to reduce deficits is to cut spending. In fact, the best way to reduce deficits is to grow the economy.
JOHN KING, CNN anchor: And the result of that is that "compromise," "consensus" has become a dirty word.
[11:10]
VELSHI: And I think that this is the problem, that we've got these – the unemployment rate is a lagging indicator. It's very hard to have an impact on that in the near future. And it's going to be very hard even if this – what the President proposes – passes in some form and succeeds – it may be a year, might be 18 months before we start to see this. We're in a dire situation.
[11:12]
AVLON: So by putting forward a balanced, bipartisan plan, of things that Republicans and Democrats have been able to agree with in the past, the President's really upping the ante. And then it really does put pressure on the Republicans as well. Can they politically oppose a plan that would create incentives for companies to hire returning GIs? I mean, there's a cost to that kind of simply opposition approach as well. So this is a high-stakes political moment, it will be a test of the President's muscle. Whether folks do pick up the phone, call and e-mail. Because this is a plan that has a bipartisan lineage. And the President's been criticized for not leading aggressively enough in the past, over-delegating to Congress. Well here's a specific plan with a bipartisan basis. So it really becomes a question of whether Republicans will be able to accept yes for an answer, and if they simply oppose tax cuts for the first time because they come from the President, I think people will see through that.
[11:15]
VELSHI: We did have the stimulus. There's this –
DANA LOESCH, CNN contributor: It failed!
VELSHI: No it didn't fail!
LOESCH: It did fail.
VELSHI: No, there's this – and you know what it goes through –
LOESCH: Then why do we have 9.1 percent unemployment?
VELSHI: And you know what you're going to hear? You're going to hear Rick Santorum saying that it lost jobs for America. That's just wrong.
LOESCH: If it were successful –
VELSHI: It didn't create as many jobs as anyone would have liked, and to have done that so fast –
LOESCH: Why do we still have unemployment over nine percent? If it was successful – why?
VELSHI: But how do you know unemployment wouldn't have been 12 percent? How do you know what would have happened if not for stimulus? There's no study –
LOESCH: The promise was that if this passed, we were going to have unemployment eight percent. So it failed. On that premise alone, it failed.
VELSHI: And I think – not only is that promise clear – the failure of that promise clear – and I think that's probably why President Obama didn't mention how many jobs this is going to create. But the reality is– I think we have to understand that they did promise they would do something. Whether or not it was successful wasn't the breaking of a promise. It may have just been an ineffective – or a stimulus that was not as effective. So if somebody were to come forward with that silver bullet and say this is how you do it – but simply saying cutting taxes and then not supporting a plan that does actually cut taxes, how does that help you?
- Matt Hadro's blog
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Comments
This compromise garbage
Submitted by bkeyser on Mon, 09/12/2011 - 7:23pm.
they just won't let up on this thing.
A man has a broken arm. The conservative doctor wants to set and cast it, the liberal wants to terminate the patient. Per John King, they'd amputate the arm.
Compromise.
It did work! Obama was able
Submitted by rbosque on Mon, 09/12/2011 - 7:31pm.
It did work!
Obama was able to pay off his union friends and foreign donors.
We taxpayers end up with the bill and Obama gets more power. Worked like a charm.
How do you know?
Submitted by Dave81 on Mon, 09/12/2011 - 7:42pm.
"How do you know unemployment wouldn't have been 12% without the stimulus?"
How do you know it would have been?
Velshi knew he was losing the argument
Submitted by Galvanic on Mon, 09/12/2011 - 9:47pm.
Anytime someone defends his position with "How do you know it wouldn't have been worse?", he/she has lost the argument.
Not really, some defenses
Submitted by Dan The Man 2 on Tue, 09/13/2011 - 6:38am.
Not really, some defenses such as WWII would work. It would have been worse under Hitler; that one is a given.
The stimulus did not fail
Submitted by Marcus Porcius on Mon, 09/12/2011 - 7:54pm.
The stimulus did everything it was designed to do.
It helped launder federal money through the unions to Democrats for their campaigns.
It helped fund all the "green" energy propaganda.
It helped send money to other countries to support THEIR workers.
It helped prop up government agencies.
It made it look like Obama actually did something to help the economy while doing the exact opposite of that.
That was the idea of the stimulus, and by that measure it performed perfectly.
"Tolerance is the virtue of the man without convictions." G.K. Chesterton
www.theconservativereview.com
And it held down the natural
Submitted by Quasi-socialist on Tue, 09/13/2011 - 7:10am.
economy to try to let green jobs firms climb on top--which it totally failed at, see Solyndra, and the other recently-failed green firm.
The stimulus plan accomplished exactly what Obama intended
Submitted by Dave. on Mon, 09/12/2011 - 7:59pm.
I really do not understand the confusion on this.
-Dave
Vote for the American in November
Didn't fail
Submitted by Einstein on Mon, 09/12/2011 - 8:17pm.
Didn't work either. Didn't not fail either for that matter.
♡ Einstein
Listening to the Left carry
Submitted by Van Halen on Mon, 09/12/2011 - 8:18pm.
Listening to the Left carry on this way is exciting! They are setting a trap of ignorance for themselves which is going to spring on them next November.
Economic guru? More like financial faker.
Submitted by drsamherman on Mon, 09/12/2011 - 8:23pm.
He has a degree in religious studies and no visible business training outside of hanging around investment banks proclaiming eternal economic disaster and acting like Wall Street's Typhoid Mary. He has as much economic credibility as Tim Geithner has tax accounting credibility.
Veshi Should Practice
Submitted by Comrade Jim on Mon, 09/12/2011 - 8:32pm.
Putting a coherent sentence together so we could figure out what he has to say.
Depends on How You Look at It
Submitted by IrateNate on Mon, 09/12/2011 - 8:45pm.
If the goal of the 2009 Stimulus Package was to bail out state governments, then it was a tremendous success. However, if the goal of this legislation was to either stimulate the economy or create jobs, it was a complete and total failure.
And you can always argue that, "had we done nothing, things would be worse," since it can never be proven either way.
One thing is definitely true - had we not done anything, the zero creation of private sector jobs would have remained the same.
We would have seen higher unemployment numbers, when thousands of public sector employees hit the streets, but now that the money is gone, their jobs are once again in jeopardy.
Enter Obama's "Jobs Bill", otherwise known as "Stimulus II." You knew it was coming...
That works both ways
Submitted by the struggler on Mon, 09/12/2011 - 8:50pm.
If Bush didn't invade Iraq we would have had two dozen 911's
Good example!
Submitted by Quasi-socialist on Tue, 09/13/2011 - 7:13am.
That's a better example than what I tried to come up with.
An even better example would
Submitted by inquiringmind on Tue, 09/13/2011 - 9:23am.
An even better example would be if we hadn't invaded Iraq then Saddam would have bombed Israel and the entire Middle East would be in flames. His people would have continued to suffer under a brutal dictator and his WMD program would have been ramped up by now.
Hey Ali 12%?
Submitted by Redrowan2000 on Mon, 09/12/2011 - 8:55pm.
Perhaps if the real number was reported instead of those off the unemployment rolls and those who have stopped looking Ali would know that we are somewhere near 16-18%.
"The official unemployment index, based on a monthly survey of sample households, counts only people who reported looking for work in the past four weeks. It doesn't account for part-time workers who want to work more hours but can't, given the tight job market. And it doesn't include those who have given up trying to find work.
When the underemployed and the discouraged are added to the numbers, the unemployment rate rises to 16.6%. The Bureau of Labor Statistics, a unit of the Labor Department, began tracking this alternative measure -- known as the U-6 for its department classification -- in 1995 after economists lobbied for a method comparable to the way Japan, Canada and Western Europe count their unemployed." Yeah Ali. I guess we should be grateful that we're not at 20%, or maybe we are.
"Don't let the bastards grind you down."
I've got notes
Submitted by Quasi-socialist on Tue, 09/13/2011 - 7:18am.
from an 80s econ class that points up the same two weaknesses of the unemployment statistic. 1) Doesn't report underemployment, 2) Doesn't report "disheartened workers". This is a structural flaw in the UR for decades.
If you look at press reports under a Republican president, when the UR goes down, the reporter inevitably mentions the defects of the UR, and often suggests that it could just be more people have stopped looking for work.
Porkulus
Submitted by Curly on Mon, 09/12/2011 - 9:04pm.
Three words - "YES IT DID!"
Flush
Submitted by Tjexcite on Mon, 09/12/2011 - 9:09pm.
Someone flushed a toilet and it rained the next day so the when they need rain flush a toilet and it will work. We don't know that without the flush it will still rain so the flush is what made it rain.
The Metrics of Stimulus Failure
Submitted by Galvanic on Mon, 09/12/2011 - 9:41pm.
The 2009 stimulus had at least two stated goals which became mantra-like Dem promises:
1. Jump start the economic recovery by funding so-called shovel-ready jobs
2. Hold unemployment at no greater than 8%
Well, it didn't jump start a recovery, as Obama admitted this year that there are no shovel-ready jobs. And back in 2009, the Federal projection for unemployment in 2011 without stimulus are at the same level as the actual 2011 unemployment level: 9.1%.
That's the epitome of failure.
Yep, That's Right, Crapulus Worked ...
Submitted by LibertyAtStake on Mon, 09/12/2011 - 10:33pm.
... and so did Janet Napalitano's "system" when the Fruit-of-Kaboom bomber was thwarted by a Dutch artist in Detroit!
d(^_^)b
http://libertyatstake.blogspot.com/
"Because the Only Good Progressive is a Failed Progressive"
Where TF have you been Waldo?
Submitted by Injest on Mon, 09/12/2011 - 10:42pm.
“I do think people do feel the urgency now on the economy”
Now? Where TF have you been Waldo? The people have been feeling the urgency of the economy day 1 of Obama's admin!
it coulda been worse
Submitted by Injest on Mon, 09/12/2011 - 10:44pm.
That set off a back-and-forth between the two pundits, where Velshi argued that unemployment could have been higher without the stimulus – a rather tired hypothetical thrown around by liberals.
If it COULD have been higher Without the stimulus, Then it also COULD have been lower Without the stimulus.
The only thing we know for sure is that the folks who totally miscalculated what the stimulus would do are the same folks who today say “it coulda been worse!”. Not a good track record.
without honor
Submitted by Injest on Tue, 09/13/2011 - 12:01am.
Anchor John King added that such a narrow approach means that "'compromise,' 'consensus' has become a dirty word."
Perhaps that's because the Dem's and the left don't understand the words or are without honor.
Dec. 10, 2010 the President Congress Dems and Repubs agreed not to raise taxes on anyone for 2 years. Everyday since Obama and the Dems have been trying to renege on that “compromise” gained through “consensus”.
Based on this reality why would anyone make a deal with Obama or the Dems? They have no honor!
Oh, yeah? Well, everyone agrees with me...
Submitted by neutron on Tue, 09/13/2011 - 12:07am.
"...the stimulus did not fail," the American people failed the stimulus, and let Obama (who is not a Muslim) down.
Velshi's denial of stimulus
Submitted by chazski on Tue, 09/13/2011 - 12:11am.
Velshi's denial of stimulus failure is proof that it did fail. If it had succeeded, he wouldn't have to defend it at all.
I wonder when ...
Submitted by Fredy on Tue, 09/13/2011 - 12:59am.
Having been listening to all sorts of economic giants over the last few days there is one burning question that has yet to be contemplated.
WHO is going to vote for ANOTHER DEBT CEILING HIKE?
Maybe they could defer that vote until oct 2012!
BWAHAHAHAHAHAHAHAAAAA!!!!!
CBO - stimulus worked
Submitted by alvin on Tue, 09/13/2011 - 2:40am.
Republicans hoping to seize control of Congress in the November midterm elections have been blasting the act as a failure. But the CBO, which is respected by both Republicans and Democrats, has long held a different view.
In its latest quarterly assessment of the act - August 23, 2011 -, the CBO said the stimulus lowered the unemployment rate by between 0.7 and 1.8 percentage points during the quarter ending in June and increased the number of people employed by between 1.4 million and 3.3 million. The higher figure would come close to making good on Obama's pledge that the act would save or create as many as 3.5 million jobs by the end of this year.
The CBO said the act also increased the nation's gross domestic product by between 1.7 percent and 4.5 percent in the second quarter, indicating that the stimulus may have been the primary source of growth in the U.S. economy.
http://cbo.gov/ftpdocs/123xx/doc12385/08-24-ARRA.pdf
Of course, if the Government spends money, it goes into the GDP
Submitted by TheHistorian on Tue, 09/13/2011 - 6:47am.
didn't they teach you any economics anywhere?
As far as reducing unemployment, we are spending roughly 6 percent of the GDP when you add up both deficit spending and the stimulus. To only raise employment by these small amounts make this a stupid bargain.
Besides, remember that we were promised 9 percent without the stimulus. So I guess that the geniuses in the Obama administration can't do their math? Or didn't have a clue and wouldn't admit it?
Dennis Prager
Output multipliers
Submitted by Par for the Course on Tue, 09/13/2011 - 7:21am.
From your link, the CBO uses estimated (high and low) output multipliers. CBO stands by their estimates (Page 7):
Personally, I think the multipliers are much lower, due to business and consumers using some, if not all, of the benefits they receive from ARRA to deleverage, which does not "prime the pump".
Over at Reason, Nick Gillespie has some thoughts on the subject.
We compromised ourselves to $14.3 trillion in debt and climbing
Submitted by TheHistorian on Tue, 09/13/2011 - 6:44am.
It is now time that we compromise ourselves to paying for that debt. The liberals keep saying "we need to cut our defense" as we are spending more than anyone else. Let's agree; 10/1 cuts in the rest of the budget for each $ of defense. And that is cuts right here, right now.
Dennis Prager
Wait.
Submitted by Quasi-socialist on Tue, 09/13/2011 - 7:20am.
Is Velshi saying.... "Mission Accomplished!" ??
Stimulus Helped...
Submitted by swenk22 on Tue, 09/13/2011 - 11:04am.
One thing to keep in mind is that there is a bottom- once the bottom is hit recovery starts. Some say the "stimulus" worked... might as well say the bottom was reached.
How about really creating jobs- oil/gas/nuke energy!!!
The numbers will be revised upwards and downwards and sideways.
Submitted by drsamherman on Tue, 09/13/2011 - 1:05pm.
This goes back several years ago when I still had my solo practice open. I was invited to a financial education seminar for small business owners by my banker. It is a very large bank and they had one of their economists in to talk about the business cycle and forecasting.
The economist made some very interesting points. The first thing he talked about is the common confusion between economic statistics and accounting, in that economic statistics are generated by mathematical models subject to constant tinkering and accounting being less prone to changes. He talked about GDP being itself a mathematical representation of what is happening in the economy at any one particular point, and he emphasized that GDP figures are constantly revised as these models are improved or changed to reflect newer metrics. He added that government finances are accounting figures and less likely to be revised except for errors in their reporting process. When it came to unemployment and how it is reported, he said that it is measured in the same way as most economic models, but with a higher level of verification possible from the existence of unemployment filings, IRS employer tax returns and the like.
He summarized by saying that upward and downward revisions of GDP, unemployment and other economic statistics often takes years to report and when the government believes the economy is growing, its own measurements may lie within the margin of error of the statistically predictive value of their models.
In other words, don't place a lot of faith in mathematical models because they are often re-structured.
business guru Ali, with his hands pointing to prayer, ARG.
Submitted by upcountrywater on Tue, 09/13/2011 - 3:21pm.
Sure he's right grow the economy, and all these problems shrink.
So is he for more DRILLING... no..... POWER PLANTS...no.....
An army runs on it's stomach, a civilization runs on energy. FEED IT.
Herman Cain: Have the EPA run by EPA abused people.. BRILLIANT. Video
You Didn't Build That.
What is up with this?
Submitted by Bill The Bold on Tue, 09/13/2011 - 7:06pm.
The stimulus didn't do what Obama promised it would so from that perspective if failed. It did do a lot from an objective point of view. It worked to some extend to save/add jobs and economic growth. That is the consensus view of the economists and research groups focused on non-partisan reporting. Why is it a myth that it worked when it clearly worked to a degree?
http://www.politifact.com/truth-o-meter/statements/2010/feb/17/barack-ob...
President Obama's much-maligned economic stimulus package added as many as 3.3 million jobs to the economy during the second quarter of this year, and may have prevented the nation from lapsing back into recession, according to a report released Tuesday by the non-partisan Congressional Budget Office.
In its latest quarterly assessment of the act, the CBO said the stimulus lowered the unemployment rate by between 0.7 and 1.8 percentage points during the quarter ending in June and increased the number of people employed by between 1.4 million and 3.3 million. The higher figure would come close to making good on Obama's pledge that the act would save or create as many as 3.5 million jobs by the end of this year.
The CBO said the act also increased the nation's gross domestic product by between 1.7 percent and 4.5 percent in the second quarter, indicating that the stimulus may have been the primary source of growth in the U.S. economy. The Commerce Department estimates that GDP grew 2.4 percent in the second quarter, a figure many economists expect to be revised lower in a report due out Friday.
The CBO cautioned that the the act's effects are expected to "gradually diminish during the second half of 2010 and beyond," leaving the private sector to pick up the slack in an economy that is already showing signs of deteriorating rapidly. On the bright side, the CBO revised the cost of the package downward: Originally estimated to cost $787 billion over 10 years, the stimulus was later estimated to cost $862 billion. But in the report released Tuesday, the CBO said it now expects the measure to cost only about $814 billion through 2019, with 70 percent of those costs incurred by the end of this year.
Polls show that the public is deeply skeptical about the stimulus and tends to believe that it increased the national deficit without improving the economy. Republicans hoping to seize control of Congress in the November midterm elections have been blasting the act as a failure. But the CBO, which is respected by both Republicans and Democrats, has long held a different view and Democrats hailed Tuesday's report as further vindication of the president's signal economic achievement.
Bold Billy---
Submitted by matthewdean on Tue, 09/13/2011 - 9:16pm.
you and alvin should compare notes before you post, and then flip a coin to decide which of you gets the honor.
That would save readers here from wading through the same BS twice.
MD