Employment, Economics, Science: Romer Redux

It is worth a return to the Romer curve, the data that the former head of the CEA presented in January 2009 regarding the effects of the trillion dollar stimulus. Now remember this is economics, not medicine or engineering and especially not science.

First we show the projections that Romer made:

This shows what she predicted to date. Note the tremendous gap between what she said would happen and what did. There is also a great gap between reality and what would have happened if they did nothing. Frankly we would have better off with nothing.

Now for the variance. We do this in two charts.

and

Now what faith should one have in economists if they are that far off? Or was the stimulus just the opposite, namely a drag on the real economy? Lot's of PhD theses will come out of this data. However no employment will.

Also worth a look at a Washington Post note regarding  Romer which states:

The economic team went round and round. Geithner would hold his views close, but occasionally he would get frustrated. Once, as Romer pressed for more stimulus spending, Geithner snapped. Stimulus, he told Romer, was “sugar,” and its effect was fleeting. The administration, he urged, needed to focus on long-term economic growth, and the first step was reining in the debt.

Wrong, Romer snapped back. Stimulus is an “antibiotic” for a sick economy, she told Geithner. “It’s not giving a child a lollipop.”

 Perhaps Romer should kick the sugar habit.