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Obamanomics (when "stimulus" is just more debt)
Posted by: McQ on Wednesday, December 24, 2008

The Washington Post carries a story today entitled, "Green' Jobs Compete for Stimulus Aid". The essence of the story:
In one of the first internal struggles of the incoming Obama administration, environmentalists and smart-growth advocates are trying to shift the priorities of the economic stimulus plan that will be introduced in Congress next month away from allocating tens of billions of dollars to highways, bridges and other traditional infrastructure spending to more projects that create "green-collar" jobs.
James Pethokoukis summarizes the problem facing Obama:
On one side you have the greenies who want to use our current economic crisis to promote their environmental agenda. And on the other side you have the "old economy," union-types who want to use our current economic crisis to attract hundreds of billions of dollars to union construction jobs. (And don't forget the local government officials with visions of bike paths and aquariums and duck ponds dancing in their heads.)

None of this stuff will boost the economy anytime soon, which is probably why Obama has quit using the word "stimulus" and has been talking down America's near-term economic prospects. Remember what incoming White House Chief of Staff Rahm Emanuel said: "You never want a serious crisis to go to waste. This crisis provides the opportunity for us to do things that you could not do before." And that is why the Obamacrats are pushing for this package to be passed in January. Time is of the political essence. You know how long it took to get Reaganomics passed and signed back in 1981, another time of economic crisis? Eight months.
So time is of the essence but a fight is brewing concerning the allocation of funds in this non-stimulating "stimulus" package planned for quick passage in late January.

Right now the mix is heavily on the infrastructure side and lighter on green projects. Greenies, of course, want much more on the green side:
But environmentalists and their allies view old-fashioned highway construction as encouraging longer commutes and increasing the energy-consumption crisis of the past year. "They're going to put a bunch of money through a broken system to stimulate the economy. That doesn't make sense to me," said Colin Peppard, a transportation expert for Friends of the Earth.

Peppard's group recently began a "Road to Nowhere" campaign, saying that new roads would lead to "new pollution — keep the economic stimulus clean."
On the other side, so-called "smart growth" types see some problems with the proposal, claiming it is out of touch with the reality of the current situation.
Smart-growth advocates are happy that the percentage of funds in Oberstar's proposal devoted to roads is not the 80-20 split in the current highway funding formula, but they still see a system tilting toward old-fashioned projects. "It's been a lot of business as usual," said David Goldberg, spokesman for Transportation for America.

Goldberg's group has studied infrastructure proposals from 15 states and found that 75 percent of their requests are for roadway construction, and of that, the overwhelming majority of money would fund new projects in outer suburbs that have been hard hit by the mortgage crisis. "We're building all this stuff for where the economy isn't anymore," he said.
The unions? They don't care which way it goes, they just want to ensure that they get the lion's share of the work.
Labor leaders have refrained from criticizing other stakeholders in the infrastructure debate, saying that the stimulus legislation will provide plenty of money to fund quick-starting pavement projects and environmentally friendly efforts. "It shouldn't be one or the other," said Anna Burger, chairman of Change to Win, a union group. "In fact, we do have crumbling roads and bridges that need to be repaired. It's not about pitting one against the other. It's about how we find a sustainable economy."

They also see opportunities for their membership in long-term "green" projects. "We're committed to green jobs and rapid transit and all the rest of it," said Terence M. O'Sullivan, head of the Laborers' International Union of North America.
If you're wonding what this next debt-package, er, stimulus package will entail, here's the breakdown:
About $200 billion would probably go toward middle-class tax cuts and tax credits for tuition and small businesses, while another $200 billion is under consideration to help mitigate the soaring costs of Medicaid and education. Up to $350 billion, or more, could go toward investments covering infrastructure, tax credits for renewable energy, increased funding for food stamps and the creation of an extensive technological health database.
The only part of that I see with any possibility of actually stimulating anything are tax credits - and they'll take at least a year to kick in. So-called "shovel-ready" infrastructure spending isn't a stimulus. It never has been. And as I've pointed out previously, given the requirements of letting contracts to get federal money, the process is neither short nor easy - "shovel-ready', i.e. projects ready to begin immediately can only be those which have already been through that process, approved and funded. Those won't include anything that is being proposed under this package which have yet to begin that 2-5 year process (depending on the project).

So Pethokoukis is right when he says "none of this stuff will boost the economy anytime soon". And if you believe it when Joe Biden says there will be no "pork" included, I have some beachfront property east of Delaware in which both you and he might be interested.
 
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Ho ho ho - we’re giving business free money and all of you a tax break and our plan to recoup the money we didn’t get from tax revenue to pay for our profligate spending is to tax all foreigners now living abroad! We know that won’t work, but why should we come up with a plan anyway, after all what are YOU going to do to US!

Ha ha ha, I mean Ho HO HO....

just wait till next year!

Merry Congress!
 
Written By: looker
URL: http://
I dont see why anyone will be suprised when our taxes go up to cover the govt boondoggles.

After all Obama promised us change.

He just didnt say that it would be all we got when we cashed our paychecks.

 
Written By: retired military
URL: http://
McQ: You own beachfront property in New Jersey? Why are you only offering it to the foolish?
 
Written By: Bryan Pick
URL: http://www.QandO.net
This shows me how badly The Clown™ has no idea about what he is up against. He ran for President on his pile of steaming dung known as "hope and change." I said it then: this guy is out of his league. And the media gave him a major pass. They didn’t ask any questions, they didn’t investigate his crooked background, they didn’t even talk about his miniscule (and I am being kind here) record in the US Senate. All they pushed was "we need hope and change."

Well, it is time to hope, because the dunce about to become President has no clue about what to do. Example: any student of history knows that FDR’s massive government spending program of the 1930s, under the umbrella of "The New Deal," was merely a sop to leftwing interests and unions. Few jobs were created (WPA writers wrote some books - wowee!), and, by 1941, when FDR’s second term was over, the unemployment rate was worse than it had been in 1933 when he took office. Yet the historians - usually leftists and revisionists - tell us how "wonderful" FDR’s New Deal was for America. Try and question that, and to the Left you question the existence of global warming (which is another steaming pile of dung).

The Clown™ is about to embark of "The New Deal II" just when this country needs something different - and better. More spending on bridges and roads will help unions get some jobs in the short term, but those jobs are short-timers and when the project is completed the jobs will vanish again. You need to give employers a reason to hire people and keep them. And The Clown™, who is probably a student of far-left economists, believes that giving a union hack a job to build a bridge makes him happy. Of course, the unions will hire 10 workers to do the work of 2 men, so plenty of our tax dollars will simply vanish into the nether regions of the UAW and other crackpot unions. And what will happen to the unemployment rate? It will continue to rise - wait until next year when it hits 8%...or higher.

Even IF those union jobs worked, and the economy did this, and the other thing did that, you still have a dearth of an industrial base that is rapidly disappearing. More jobs will move to Mexico and China. And that will exacerbate the unemployment rate and, thus, the recession. And more homes will go into foreclosure. The Dems and their willing doofuses in the GOP can prop up GM and Chrysler all they want, but people will not buy cars, or houses, or anything else, if they think their jobs are in jeopardy. And that will continue to downward spiral. Meanwhile, The Clown™ is in Hawaii, playing golf. When Bush played golf, the media savaged him as being out of touch. Yet now the media gushes over a shirtless dimwit in Hawaii because he "looks so good on the beach." It makes me want to throw up.

I said it once before, and I say it again: this situation is akin to being on the Titanic as it is sinking, and you run to see who is piloting the ship and find out it is Howdy Doody. Only in this case Howdy Doody would be far more experienced, and far more ready to handle what is about to come. The Clown™ has not the foggiest idea what to do, and what he does want to do will do nothing to stop the bleeding of the American economy.
 
Written By: James Marsden
URL: http://
Times have changed one way since the 1930s; there is no way that an ineffectual program will be tolerated for four years. Four years is about six to seven times longer than it was back then, and the rate continues to accelerate. For better or for worse, if the economy isn’t clearly turning around by March or so, the American people are going to start rolling heads. That’s the way we’ve become, with our news cycles so fast now.
 
Written By: Jeremy Bowers
URL: http://www.jerf.org/iri
NEW YORK, Dec 24 (Reuters) - The New York Times Co’s (NYT.N) November advertising revenue fell 20 percent, the company said on Wednesday, illustrating how the financial crisis is aggravating dizzying revenue declines at U.S. newspapers.
It’s amazing what happens when the Obama campaign stops buying ads.
 
Written By: Neo
URL: http://
Times have changed one way since the 1930s; there is no way that an ineffectual program will be tolerated for four years. Four years is about six to seven times longer than it was back then, and the rate continues to accelerate. For better or for worse, if the economy isn’t clearly turning around by March or so, the American people are going to start rolling heads. That’s the way we’ve become, with our news cycles so fast now.
I agree but the only problem is the politicians have until the end of 2010 for everybody to forget what they did in the past 2 years. That gives them 2 years to publish lies on how everything is still GW’s fault.
 
Written By: mac
URL: http://
Jeremy

"Times have changed one way since the 1930s; there is no way that an ineffectual program will be tolerated for four years. Four years is about six to seven times longer than it was back then, and the rate continues to accelerate. For better or for worse, if the economy isn’t clearly turning around by March or so, the American people are going to start rolling heads. That’s the way we’ve become, with our news cycles so fast now.
"


BAHAHAHAH

Look at half the govt programs that are now in existence. Look at the public schools, welfare programs, and any one of a 1000 other govt boondoggles that our money goes down. Yes they do some good but they are the definition of ineffectual.

And with a democratic congress, the fairness doctrine going in, illegal immigrants will be naturalized, and whoever else the democrats will buy believe me they will be around for a lot more than 4 years.

 
Written By: retired military
URL: http://
I mean an ineffectual economic recovery plan plan.

Most of those programs you cite are allowed to continue because fundamentally, people don’t care. People don’t really care about schools, because most don’t have kids in school. People don’t really care about welfare or immigration or any of the other things you cited, because it doesn’t affect very many people very strongly, certainly not enough to make it worth the effort of changing anything.

But a bad economy? When it’s the only thing anybody’s talking about on the 24-hour cable news channels? When even the Keynesians come on the air to say "This isn’t what we’re supposed to do"? With the entire country watching every move? If anything’s going to spook Obama into doing the right thing, it’s the sheer level of scrutiny every move’s gonna get in realtime.
 
Written By: Jeremy Bowers
URL: http://www.jerf.org/iri
I’ve taken up reading Nozick, Hayak, Mises and Garrett over the holidays, both in preparation for the development of critical arguments (kritiks) and counterplans for my high school policy debate team, and as a response and personal rejection to the exceptionally poor decision-making done by my fellow citizens who elected Obama.

It’s shocking how perceptive those authors were, especially several of which predicted our current state from over 70-80 years ago. Mises is almost painful to read (especially when you encounter all of the "the U.S. isn’t this way yet, but given time..." comments where you realize we’ve raced past that point this year).

Indeed, the whole deontological discussion has been lost in our nation. That I have the right to have armed men invade your bank account and seize half of your income (and demand ransom on your real and personal property or else I’ll invade your home and sell it off to someone else who will pay the ransom of property tax) has become completely lost in the discussion. We’ve become ethically bankrupt this year, with all but a tiny minority accepting the teleogical bailouts and merely weighing alternate ends against each other (rescue the banks? newspapers? UAW auto makers? ski industry? hedge fund suckers?).

In case you’re feeling frustrated and seek greater traction and impact, I’d encourage you to get engaged in your schools and reach out to young minds with the message of ethics, economics and risk. All of us need to work on that outreach, given that Obama’s plans will work only to further destroy the economy and damage the social fabric of the nation, at which time radical forces become a greater factor. We’ll likely encounter calls for outright command-economy structures, as the interpretation (which Mises correctly nails in "Human Action") of the failure of Obama’s initial efforts will be that the policies were not dramatic and forceful enough. 50 years of Great Society redistribution (and $7 trillion dollars later), we find ourselves worse off than when we began, yet the left explains this as that we didn’t redistribute enough.

We need to counter that radical message, but such efforts take time. Intelligent analysis requires a foundation, not a gut reaction by intellectual lightweights (aka light-workers) which Marxist ideology appeals to. I coach high school debate while working as a risk executive and have students comprehending and arguing libertarian thought, which they consistently remark is fresh, exciting and "something we never heard of before in school." This holiday, I encourage the rest of you to consider how you can get engaged with the education of students on ethics, free markets, economics, liberty and other critically important ideas. Lacking your involvement, it is most likely that they will never encounter these ideas and as future voters, will never consider anything but a teleological evaluation of "which outcomes sound good."

Incidentally, for those of you who former debaters (especially policy debate), your involvement is critically needed. Debate is under great pressure as doesn’t meet the political agenda where performance and superficial appearance is valued over critical argumentation. In a nation where the New York Times, long considered the thought-leader for the news media, ignores alternative opinions offered in by McCain in response to Obama, or by the FBI agent in response to William Ayers, Milton’s Areopagitica ("let truth and falsehood grapple to discover truth") is dead. School administrators across the nation have used funding shortages caused by inept administration as an excuse to trim or eliminate funding for debate. However, when offered the capacity for a standardized test score-raising activity at no out-of-pocket cost to the district through volunteers, they’ll bite at the opportunity. We’ve made debate work for a small rural school district and other volunteer coaches I work with in the state have developed national champions and strong programs in inner-city districts and other challenged environments. Indeed, we’ve found that debate resonates better with students who are hungry for change and seek the reasoning and argumentation skills to find it. They don’t suffer from the complacency of the suburbs. To get involved, visit nflonline.org and reach out to your district NFL representative with your interest. I can assure you that you’ll be welcomed and given the support to be successful.
 
Written By: HatlessHessian
URL: http://
Hatless

unfortunately when more than 50% of the population are basically freeloading and of the 50% who are not you have a percentage who are liberal and who dont mind the 50% freeloading as their money is elsewhere and isnt touched that much (Ie John Kerry, Kennedies, Gates, etc who have money in taxed free bonds, invested in foundations, and or have it overseas) then you fight a losing battle.

Remember we have redistricting coming up in 2010. Our chances of controlling anything even if Obama does horrible are very slim at best.

I mean look at the disaster Congress has been in the last 2 years with single digit approval numbers and what did the masses do? Elect more democrats.



 
Written By: retired military
URL: http://
HH, I’m glad you have found those thinkers to work on. The only one I read with some consternation is Nozick, who had some hardcore libertarian positions in Anarchy, State, and Utopia that I couldn’t swallow. But he pulled back a bit on those later in his life.

Mises certainly called a lot of things correctly very early, and those of us who read him decades ago have not been surprised by much of the development of bigger government or the results thereof. And I think he and Hayek got the basic mechanisms of the problem right - lack of information and lack of feedback for just about anything the state does.

Getting such ideas into the education pipeline is frustratingly difficult and often impossible, though. The slightest whiff of something professional educators deem as politically incorrect often means an all-out fight. They’re so far gone that they’re *arresting* ten year olds with *toy guns* and charging them with *terrorist acts*. Trying to explain fundamentals of freedom-oriented thinking to such people is impossible; as adult educators, they’re too canalized to reach. Most are absolutely sure that it’s their responsibility to transmit their warped understanding to their students and to prevent "subversive" alternatives from competing with the ideas they like.

Your idea of going through the debate back door is an interesting one. It sounds worth pursuing; even though the percentage of students reached is small, at least those students are attempting to learn some thinking and reasoning skills.

I’ve also pondered volunteering to teach economics at a local school. Since Keynesianism has fallen out of favor, with things like public choice theory coming to the fore, I’d like to think justifying the presentation of freedom-oriented economic approaches would be easier. And economics pervades so much of human activity that it allows one to talk about almost anything.
 
Written By: Billy Hollis
URL: http://qando.net
Jeremy

Sorry but I think the dems will just blame Bush and say ’Things are worse than we ever thought they were". IN fact they are already are. And with the press on their side they will be able to spin it no matter what. At least with Bush in office there was a chance of the story getting out.

WIth the dems controlling Congress, the White house and the press there isnt a chance that the truth will get out.

I am also betting that the Supreme court size will get increased by at least 2 since the Dems have such a lock on congress. Dont count on Snowe, Spectre or the other RINOs to put up much of a fight. After all they want to be with the Dems anyway and right now the Dems are in power. THey figure better a few crumbs than none at all.



 
Written By: retired military
URL: http://
Billy - Thanks for the comments. It has been a bit of a backdoor. I’m still wary that the community I’m reaching is highly limited. If you’ve encountered policy debate before, or seen the HBO 2007 documentary "Resolved", it’s quite the unique community (comprising of exceptionally intelligent individuals who quite often challenge institutions). Then again, if we’re to have a chance with arguments that require real thought rather than emotional appeal, we’re home.

My "A" team took first place in novice (they’re a first year squad) at one of Omaha’s most prestigious tournaments a few weeks ago and running Nozick is an important strategy for them. I can’t wait until the next few weeks where they pull out the full Mises/Hayek/Nozick/Garrett framework (bubble theory, Federal intervention = collapse, hegemony issues, and the whole anti-utilitarian kritik). Their judges are predominantly college policy debaters who typically major in philosophy or poly-sci and it’s shocking to hear wanna-be Marxists find inspiration in the message. I’ve long believed that Marxism was popular to so many counter-culture types simply due to its abrasive qualities respective to societal norms.

Like retired_military comments, I’m also pragmatic and somewhat pessimistic on our capacity to correct this train-wreck. 100 years of Wilsonian interventionalism and economic fantasy, compounded with tens of trillions of debt obligations, will not resolve nicely. As an operational risk professional (and black swan disciple) running a program for a global financial firm, I tend to expect systems such as our political one to have to crash before it can reset, and resetting isn’t usually a pretty picture nor are timeframes short. Realistically, it’ll take several generations to rid of the culture of consumption via the seizure of another’s assets, with half of our population addicted to the consumption of toys (ATVs, HDTVs, playstations, play vehicles, etc) while demanding we pay for their retirement, healthcare, children’s K-College education and subsidize their wages to a "livable" $70K+/year (not including fringe).

But complain as I may, I’ve found it liberating personally and professionally to have reached a new generation. Regardless of the choices they make in life, they will always have the ethical framework of greater libertarianism to evaluate decisions through. Consider this: Brutish competition for life has evolved beyond mere physical claims. The greater war is now in minds, using ideas. It’s how the United States lost the conflict in Vietnam, brought Iraq to a success and has an undecided future in Afghanistan. We have this same war at home, but so many of us here have ignored it. We have real enemies that own the manufacturing plant of institutional ideas: public education. Our advantage is that their ideas cannot work. Their advantage is that they own control and will ride it down to oblivion, taking us all with it.

If we cower or concede defeat, we’re already done. If we believe our ideas are worthwhile, we must go beyond posting on blogs. We must act and spread our ideas. I’m sure there are other avenues besides debate (and certainly hope so), but I ask each of you here to do something to evangelize our way. I’ll promise you one thing: when you get out and reach out, you’ll feel so much better and will feel much more satisfied. In operational risk, outliers tend to control way too much of the model, which is bad in many circumstances but in political situations, it’s to our advantage. Retired_military is right that so many are useless parasites, but for those few that choose to engage and lead, that’s a benefit. Let’s help create more leaders to communicate the right framework for economics, ethics and life.

Merry Christmas all and thanks to the qando.net community for what it has done to forward discussion and critical thought.
 
Written By: HatlessHessian
URL: http://

 
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