Wednesday, May 28, 2014
A Timely Reminder of Young Tim Hudak's Faulty Math
While much of the media seem to give young Tim Hudak a free pass on his ludicrouse claim that he will create one million jobs in Ontario over eight years by slashing both jobs and corporate taxes, Paul Boothe at Maclean's is offering a more critical perspective:
A very surprising and, for voters, unfortunate thing became apparent last week in the Ontario election campaign. The Progressive Conservatives’ central campaign proposal, the million jobs plan, collapsed when analysts looked closely at the math. Elementary, but critical arithmetic errors in their calculations resulted in the Progressive Conservatives vastly overestimating the number of jobs their plan would create. These errors demolished the underlying economic rationale the party had put forward for its smaller-government, lower-tax plan.
It seems that a fundamental error occurred in the Tory brain-trust's calculations:
...the planners confused person-years of employment with permanent jobs. This confusion led them to vastly overestimate the effect of their proposed job-creating measures. The result was that the half million jobs the Progressive Conservatives were promising to create with their plan (base-case economic growth was expected to provide the other half-million jobs) was really only about 75,000—fewer than the 100,000 public-sector jobs they were pledging to eliminate.
Or to put it another way, as explained by McMaster economist Mike Vealle,
Mr. Hudak appears to have conflated person years of employment – how many people would be employed for a single year – with permanent jobs. As a result, he counted many projected jobs multiple times.
Tim's predictable response?
“We strongly disagree with that interpretation,” he said while touring a factory on the outskirts of Niagara Falls. “I stand behind our numbers.”
While no one has yet demanded studies to back up Tim's basic premise, that austerity and tax cuts create jobs as discussed in two previous posts, this discovery of error at least represents a good use of journalistic time.