Douglas Elmendorf

Update - 5/27, 3:08 PM | Lachlan Markay: A new Harvard study finds that increased government spending actually reduces economic activity, contradicting the basic premise behind CBO's assumptions. Details below.

Good economic news is so rare for the current administration, that when some does emerge, many in the media parrot it as fact without really examining the claims that undergird it. New CBO numbers on the stimulus, for instance, have been trumpeted as proof the legislation at least helped, despite the fact that the numbers have little to no basis in reality.

Congressional Budget Office models are based on the assumption that stimulus spending will create jobs. They assume the conclusion they purport to demonstrate, and then claim they've demonstrated it. But if the model is inaccurate or simply based on false premises, it simply goes on tallying jobs "created or saved" without regard to the actual employment rate.

In March, a reporter asked CBO director Doug Elmendorf: "If the stimulus bill did not do what it was originally forecast to do, then that would not have been detected by the subsequent analysis, right?" His response: "That's right. That's right." Yet despite those numbers' disconnect from reality, the media continue to report them as fact, and proof that the stimulus is working.

CNN’s Kitty Pilgrim followed the lead of ABC News in reporting the Obama administration’s attempt to use regulatory power to suppress criticism of its health care proposal on Wednesday’s Lou Dobbs Tonight. Pilgrim noted how “[health] insurers are angry because...the government Medicaid office instructed them to cease sending what it called misleading...information about the bill to clients.”

Anchor Lou Dobbs introduced the correspondent’s report 19 minutes in the 7 pm Eastern hour: “Lawmakers and some of this country’s insurers today [are] incensed about what they see as a White House attempt to control information about possible Medicare cuts. The White House yesterday, in fact, warned insurers and health care companies they could face legal action if they spread what the White House calls misinformation about the health care bill.”