Former Federal Reserve governor and George W. Bush economic aide Larry Lindsey, now president and CEO of The Lindsey Group, an economic advisory firm based in Washington, D.C., has the cover article in the new Weekly Standard, rebutting the Alan Blinder-Mark Zandi paper claiming that the stimulus worked:
The paper argued that fiscal stimulus enacted under both Presidents Bush and Obama lowered the unemployment rate by 1.5 percentage points. But it did not measure either the number of people who found work or the effectiveness with which the Obama stimulus created jobs. Instead, it assumed through the use of economic modeling that the recently enacted stimulus was roughly as effective, dollar for dollar, as similar provisions in the past. It then multiplied the past measures of job creating effectiveness by the number of dollars in the current plan and added the result to the current unemployment rate.
This is the economic equivalent of assuming there are 1,000 angels on the head of a pin, observing that we have 10 pins, and therefore calculating that we must have 10,000 angels. The math is fine. But it sheds no light on the key policy issue...
The whole article is worth a read — it's not just a debunking of Blinder-Zandi, but a look at the whole question of stimulus.