Free Markets, Free People


Is Obama’s jobs proposal just an old, tired, costly and failed rerun?

So what will the much anticipated jobs proposal by President Barack Obama look like? Will it be big, bold and audacious? Or a tired rerun?

Well if the hints coming out of the administration are to be taken seriously, it will be something along the lines of a giant Works Progress Administration project.  The WPA was a depression era jobs program that essentially tried to keep the unemployed busy with make-work infrastructure projects.  It appears the same sort of project will be the center piece of the Obama proposal:

White House aides gave some clues Wednesday when they revealed the president had discussed with his Jobs and Competitiveness Council an initiative aimed at having construction workers retrofit commercial buildings to make them more energy efficient.

Both Obama and former president Bill Clinton have touted the retrofitting concept as a way to create up to 1 million jobs, according to the Jobs Council.

Obama talked about those plans Wednesday on a conference call with General Electric Chief Executive Jeffrey Immelt and American Express Chief Executive Ken Chenault, who co-chair the jobs council, said deputy White House press secretary Josh Earnest.

“They discussed a number of the proposals that the Jobs Council has been developing,” Earnest told reporters during his daily briefing in Martha’s Vineyard, where Obama is vacationing with his family. “And the president solicited their input on the policy — again, on the policy process that’s underway related to the major economic address that the President will deliver after Labor Day.”

The project would put people to work and improve the environment, Immelt and Chenault wrote in a June op-ed in the Wall Street Journal.

That’s right, construction workers would be put to work improving the “energy efficiency” of commercial businesses.  Absolutely no opportunity there for waste, fraud and abuse, is there?  And, of course, where the dire need for jobs lies – the private sector – this will have little effect.  And if California’s experience with the same sort of program is any indication, this sort of program will have little effect as well.  You see, it’s been tried before in another form with stimulus money.  Results?

Federal and state efforts to stimulate creation of green jobs have largely failed, government records show. Two years after it was awarded $186 million in federal stimulus money to weatherize drafty homes, California has spent only a little over half that sum and has so far created the equivalent of just 538 full-time jobs in the last quarter, according to the State Department of Community Services and Development.

[…]

The weatherization program was initially delayed for seven months while the federal Department of Labor determined prevailing wage standards for the industry. Even after that issue was resolved, the program never really caught on as homeowners balked at the upfront costs.

Companies and public policy officials really overestimated how much consumers care about energy efficiency,” said Sheeraz Haji, chief executive of the Cleantech Group, a market research firm. “People care about their wallet and the comfort of their home, but it’s not a sexy thing.”

$93 million or so dollars later, 538 jobs were created.  Epic fail, right?   A perfect reason to do it again, apparently.  And why will it most likely fail again?

Well, here’s a clue:

“More than two million construction workers don’t have work,” they wrote. “Every city in America has commercial buildings that can be made more energy efficient. Both the private and public sectors can step up to create good jobs and save energy.”

The clue? Underlined in the emphasized quote. Is there an actual market for the plan? In other words, is the "private sector" willing to spend the money necessary to upgrade its energy efficiency or not? Obviously, as in California, the central planners haven’t a clue. They’ve done no market research.  So I suspect the outcome of such a program will be much like that experienced in perhaps the greenest state of the union – a failure.

Oh, and big idea 2? 

Earnest said the president also discussed ideas aimed at increasing the number of engineers who graduate from U.S. colleges and universities.

That’ll certainly impress the millions not unemployed as something that will directly and quickly benefit them.

Finally:

It is not clear how much either of these two proposals would cost or how they would be paid for. But with a new Congressional Budget Office report released this week showing unemployment remaining above 8 percent through 2014, there will be pressure on Obama to be bold in his jobs plan.

You really don’t need the CBO to score this turkey, we’ve seen this all before and we know the outcome.  It will cost billions and billions, will have little or no effect and Obama will try to tar the Republicans who point out what a loser of an idea this is as extremists who aren’t concerned with jobs.

However, anyone who seriously looks at the two proposals – a WPA project which will require private investment and more engineers in college – will recognize this is just more of the Obama smoke and mirrors regime.  There is nothing that seriously addresses the long-term structural unemployment problem in this country or addresses the need to provide incentive to the private sector to hire and expand.  It is again the left’s usual answer – expensive and marginal government programs that end up time after time failing because those proposing them haven’t a clue about how markets really work.

I recognize that there may be other proposals included in the president’s total package, and, in fact, he may cover some of the things I’ve noted as missing.  If so, I’ll analyze them when they’re made public.   But these are the proposals the White House felt it was important to leak to the press prior to the Obama Labor Day jobs speech.  If these are the center pieces of his jobs proposals, then the administration has nothing new to offer and is running on empty.

But many of us have noted that for quite some time.  This would only make it official.

~McQ

Twitter: @McQandO

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26 Responses to Is Obama’s jobs proposal just an old, tired, costly and failed rerun?

  • If we are truly following Japan’s path, then this WPA will need to be in place for decades, not years.
    The three things that I think would truly help our jobs situation would be:
    De-regulation,
    Cut corporate taxes to the bone, and possibly capital gains as well.
    Get China to allow the Yuan to float (and have it revised sharply higher.)
    I think only the first two could help more immediately, and I also think a “regulation freeze” will not help as much as actual rollback. Part of deregulation will be moving to assist innovations such as driverless cars. That could be a real industry where our private industry could lead, but it requires regulatory assistance, as in “allowing it occur.” It might also require state infrastructure spending, which would actually be a public good and a boon to the public if we get a system up and running.

    • The driverless car thing is just an idea/example of innovation in de-regualtion beyond the usual reduction in paperwork, etc.

    • …moving to assist innovations…

      No, no, no!  I understand your instincts, but laissez faire market capitalism means the government, outside of providing the bones of a civil society, NEITHER HINDERS OR HELPS businesses.  NOBODY needs to assist innovation outside of the market.

      • I worded it badly…I mean assisting innovation by REMOVING regulations. But in some cases, like driverless cars, I would imagine regulations would need to be created…I may lean libertarian but I still believe in rules for driving.

  • Ay gawd, talk about PATENTLY CLUELESS…

    The weatherization program was initially delayed for seven months while the federal Department of Labor determined prevailing wage standards for the industry.

    Here’s how you determine “prevailing wages”…  You offer a wage.  If people show up to get hired, that there is a clue, sparky, that you are in the money.
    But, of course, this was NEVER about the “market rate”.  It was ALL ABOUT UNIONS.
    Now some “bright” thinks it would be good to have a Five Year Plan to subsidize engineering students…?!?!?  And THAT will mean a huge influx of JOBS…!?!?
    This would be a parody if we weren’t having to live it.

    • Th real problem with the “Stimulus” and this hypothetical “jobs plan” is that Obama and Congressional Demcrats are frimly against the “wrong people” making any money from these projects.
      As I have posted elsewhere, VDH wrote that the innovators, the entrpenueurs have gone into hibernation since they have no idea if they can actually turn a profit. 

      I’m hoarding cash, hunkering down, and am going to wait this bad bunch out.”

      With Congress and the Administration playing “tax anything that makes money,” they have decided to wait for a better business environment.  For the mutli-nationals, this means going to India, China and Viet Nam for labor and a friendly tax structure.  On the domestic side, they wait till Obama or his successor cries “your KungFu is stronger.”

  • They tried the same thing here in Seattle, with even worse results – 20 million spent, and only 14 jobs created, and practically no actual energy conservation work actually, y’know, done.  <a href=”http://www.examiner.com/conservative-in-spokane/seattle-green-jobs-program-creates-only-14-jobs-after-20-million-federal-grant” title=”All they hired was more bureaucrats”>

    • Don’t worry. They finally have the right people on the job under the Dear Leaders personal on-the spot guidance. Nothing can go wrong.

      • I registered a blurb about Krueger’s big contribution to “labor economics” being studies on how to make unions job creators, and how to raise the minimum wage without hurting employment.
        In other words, he’s an alchemist and perpetual motion crank.  (Yeah, that is a pun…)

  • No no, it will be a fresh outlook with a new construct on an old issue.
    It will be fast paced, attention grabbing and topical……..oh, wait, I thought you were talking about the new TV season……

  • “Earnest said the president also discussed ideas aimed at increasing the number of engineers who graduate from U.S. colleges and universities.”

    I’m guessing this means that they are going to enact Title IX regulations for science and engineering schools.  For example, see http://www.nytimes.com/2008/07/15/science/15tier.html.

    • Applying Title IX to science is a losing proposition.
      It would be like enforcing Titile IX to force women out of psychology et al and into engineering.  It might be useful but it is going to make a boatload of people pissed off … and it’s mostly going to be women who will get pissed off.

    • “…increasing the number of engineers who graduate from U.S. colleges and universities.”

      That has been discussed and fretted about by politicians for over 40 years that I know of. To date their only ‘solution’ is to grant a lot of student visas to foreigners. China, for one, is very grateful for the opportunity to send students here to learn the latest technology and take it back home. 

  • ” the number of engineers who graduate from U.S. colleges and universities.”

    So, will these be American born engineers?  or will we help subsidize new imports to the detriment of the ones already here (both foreign born and domestic).

    • Of course, this means more cheaper engineers.
      But beyond that, if you take a walk through most of the engineering schools (I’m presently paying for my two kids to go to engineering schools) you will find at the under grad level a majority are “American-born” engineering students, but at the grad school level, they are 40% Indian and 40% Asian (mostly Chinese and a few Japanese).  If you want to know what it is to be a minority, just go to a engineering grad school.

      • Well, but I understand that, we need to crank out Indian railroad engineers (not the guys who drive the trains kids…) so they can take their places at the UN in charge of climate study departments?

        We NEED those foreign engineers so they can plan out the shovel ready projects for the next big stimulus.

      • There is a practical reason for this.  Unlike so many other fields, but like Law and Medicine, what most engineers desire is not the PhD but rather the P.E. – state registration as a Professional Engineer.  In fact, I know many an engineer who looks down on PhD’s who have not passed the state boards for the P.E.

      • It’s also interesting to look at the faculty. Check the names of faculty in the real sciences and engineering, then compare them to the names of faculty in the less rigorous disciplines.
        One day I was walking by the math faculty offices at one of my alma maters (plural?) and heard two professors talking. One was Russian, the other German. They were speaking in English, with strong accents. Amusing. The Professor with the most Anglo sounding name was actually from India. 

  • This would be a lot worse than the WPA or the CCC, say what you will about those programs but they did actually build and create a few useful things and developed a few areas.

    I am sure that the Obama version would be exactly like all the other Obama stimulus, nothing actually is achieved and yet huge sums are spent on Democrat constituents such as Unions.  Just another big left wing rip off of the taxpayer.

    Can the Republicans in the house have enough guts to say hell no! no more rip offs!

  • Paradoxically, though every measurable econometric proves Obamanomics is a complete failure, the president blindly agitates for more stimulus, more deficit spending, more centrally planned jobs programs and more Government interventionism.  How can any intelligent though effete “Metro Sapien” continue to dogmatically ignore the confluence of scientific fact with economic reality?

    We are now witnessing the failure of Keynesianism on a grander scale than has ever been experienced — never before has the impotence of Keynesian policy been demonstrated so comprehensively… It is clear that the undoing of Keynesian economic theory is now complete and unequivocal – one of the greatest frauds ever perpetrated on the public under the guise of economic science has finally been put to rest.”

  • I heard he is delaying the speech…which means it really, really sucks.

  • “ retrofit commercial buildings to make them more energy efficient.”

    Something which obviously needs to be done since those corporate fatcats don’t care how much they spend on heating, etc. And it’s so simple. Just a few days training and anyone can safely work on electrical wiring, structural modification, install and calibrate climate control systems, etc.