The WSJ’s 3% Solution

A Journal story this morning reports that a White House claim that the stimulus bill saved or created 640,000 jobs is overstated.

The number of jobs the Obama administration credits to federal stimulus money could be overstated by at least 20,000 of the 640,000 claimed, a Wall Street Journal analysis found.

The story appears on A6, so there’s no need to make too much of it, but this is only to note that its findings amount to three percent of the administration’s total claim, more or less a rounding error.

The White House responds predictably:

Ed DeSeve, the senior adviser to President Barack Obama on implementation of the stimulus plan, said Tuesday in a statement responding to questions from the Journal that the administration knew the reports were not “100 percent accurate” but that the plan was supposed “to create jobs, not count them.” He said that even the “approximate” total pointed to “tremendous progress.”

“We are looking at both overcount reports and undercount reports, and continue to ask questions of recipients to try to fix errors,” Mr. DeSeve said. “In the end, we think any adjustments to the direct jobs count will be modest as a percentage of the 640,000 jobs total, either raising it or lowering it slightly.”

Sounds about right.

To be fair to the story, its anecdotes are better than the quantitative findings highlighted in the lead paragraph:

A Kentucky shoe-store owner claimed to have created or saved nine jobs with an $889.60 contract to supply work boots to the Army Corps of Engineers. The owner said he supplied nine pairs of boots and that the mistake arose from confusion over the government form.

Not boots—jobs! Doh.

And this one:

“Holy moly, that’s not right,” Teresa Cox, executive director of the Mid-Willamette Valley Community Action Agency in Salem, Ore., said of her organization’s report. It indicated that 205 jobs were created or saved with the agency’s $397,761 federal grant. The money, she said, was used for pay raises.

Ms. Cox said her agency thought it was supposed to report the number of employees affected by the stimulus money. “And the only way to do that was to create new jobs or retain jobs.”
An HHS spokesman, Luis Rosero, said the department had told recipients to report only fractions of a job if the money was being used for bonuses or raises.

Whatever that means.

I’ll leave it to others to argue about the effectiveness of the stimulus, though there doesn’t seem to be much dispute outside of tea-bagging circles that it kept the economy from running off a cliff. (For ideological contrast, check out the NYT’s piece today on a how government spending saved Oshkosh Corp.).

What’s notable about this story isn’t the Fox News-y angle, although, sure, you can’t help think about it, and the story does bring to mind the Congressional expenses non-story that got page one play over the summer and then sank without a trace.

The fact is, though, newspapers are supposed to check government claims on things like this.

No, what strikes me about this story is its hurried, hit-and-run feel. The story says it is based on a “Wall Street Journal analysis,” but the “analysis” is later described merely as a “preliminary review.”

Most recipients of stimulus money are required to file quarterly reports on how they used it. The government published more than 150,000 such reports late last week. A preliminary review revealed dozens of recipients claiming to have created or saved at least one job with less than $2,000 in stimulus money, to a total of at least 3,300 jobs.

So, we’re looking at a preliminary review of 150,000 quarterly reports—150,000—published ”late last week.” Today is Wednesday. How many reports can you review in that amount of time? It should be no surprise that the paper came back with 700-word story that contains some tantalizing anecdotes but nothing more—heat, no light. If the miscounts throughout the data are anything like the egregious errors contained here, then the Obama administration claim is off by way more than 20,000. But we don’t know that.

An investigation, if you’re going to bother with it, take times, patience, and editorial discipline. Whatever this was meant to be, it isn’t that.

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Dean Starkman Dean Starkman runs The Audit, CJR's business section, and is the author of The Watchdog That Didn't Bark: The Financial Crisis and the Disappearance of Investigative Journalism (Columbia University Press, January 2014). Follow Dean on Twitter: @deanstarkman.