Whenever I hear a Republican Tea Party loser mention the Obama administration’s broken promise of 8 percent unemployment, and the failure of their policies, I literally go ballistic. So finally, the factual explanation that blows up this BS, from Ezra Klein:
Reuters’ conservative economics columnist James Pethokoukis is a good read … But this is a very weak effort. Pethokoukis’s first argument is that the White House’s “own economists predicted the stimulus would prevent the unemployment rate from hitting 8 percent. But the rate actually rose as high as 10.1 percent…
This is, of course, a reference to the infamous Bernstein-Romer paper (pdf). And though it’s fine as a politician’s dishonest soundbite, it’s disqualifying for a serious economic commentator. In December 2008, the Bureau of Economic Analysis was projecting (pdf) that in the fourth quarter of 2008, the economy would contract at a 3.8 percent annualized rate. That would later be upgraded to 6.2 percent, and then, earlier this year, to 8.9 percent. In other words, Bernstein and Romer were building their estimates — and their policy — off numbers that underestimated the economic contraction in the fourth quarter by 5.1 percent of GDP. And they weren’t alone. Every private-sector forecaster — from Macroeconomic Advisers to Moody’s to Goldman Sachs — was making the same mistake. In December of 2008, no one had any idea how bad things really were. Indeed, we didn’t really know the depth of the damage until a few months ago, when the BEA updated its estimates.
In general, I have actually found this to be a useful test: When economic commentators use this argument, I know not to take them seriously, because they either don’t know the facts or aren’t letting them stand in the way of their argument. Pethokoukis certainly knows these facts. He just chose not to mention them — even to attempt to refute them — in his article.