August 31, 2012

Bernanke Claims Two Rounds of QE Created 2 Million Jobs; That Would Mean Obama Admin Policies Have Created Fewer Than 750K

In his Jackson Hole, Wyoming presentation today, Federal Reserve Chairman Ben Bernanke, as reported by Paul Wiseman at the Associated Press, made the following claim in connection with the Fed’s programs of “quantitative easing” (QE): “Bernanke argued Friday that collectively, such measures have succeeded. He cited research showing that two rounds of QE (quantitative easing) had created 2 million jobs and accelerated U.S. economic growth.”

I’m not inclined to automatically believe Big Ben’s word. But if he’s right, and if the allegedly positive effects of QE started being felt at about the time the recession ended, that would mean that the fiscal policies of the Obama administration are responsible for the remnant. Of course, Wiseman at the Associated Press, aka the Administration’s Press, didn’t ask the next logical question, so I will. Guess how big that remnant is?

The answer: 742,000 jobs (133,245,000 minus 130,503,000 minus 2,000,000):


That’s in 37 months.

That’s 20,000 jobs a month.

If Bernanke’s right, his policies have contributed to the creation of 73% of the 2.742 million post-recovery jobs the economy has added since the recession. 37 months after the early-1980s recession ended, the economy under Ronald Reagan, despite and not because of the necessary inflation-fighting tight money policies of then-Fed Chairman Paul Volcker, had added 9.8 million jobs. To replicate that, “Team” Obama/Bernanke would have had to create about 14 million post-recession jobs by now.

Additionally, as noted today by a left-leaning advocacy group, the jobs created since the recession ended on average pay quite a bit less than the jobs lost during the recession. During the Reagan era, despite press hype to the contrary, real compensation increased by 10% in real terms from 1981 to 1988 (Page 19 at link) — and after-tax compensation increased by more.

Don’t expect anyone in the establishment press to try to create a food fight between the Fed and the Obama administration over job creation resulting from monetary vs. fiscal policy. That kind of discussion will only hurt Dear Leader, so, as we saw with Wiseman, they’ll pretend it’s not relevant.

Cross-posted at



  1. Interesting, but I don’t buy Ben’s “research” (by who?) at all.

    Comment by zf — September 1, 2012 @ 12:01 am

  2. Yeah, but in this case, subtraction is fun.

    Comment by Tom — September 1, 2012 @ 12:12 am

  3. True. And I wonder if Obama will attack Big Ben like he has everybody else who has crossed him.

    Comment by zf — September 1, 2012 @ 1:32 am

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