Bloomberg reports that President is putting his “creating or saving” program in high gear. He intends to “create or save” more than four times the number of jobs he has already created or saved, 600,000 of them!

June 8 (Bloomberg) — President Barack Obama, trying to bolster an economy he says still has a “long way to go,” announced 10 projects aimed at creating or saving more than 600,000 jobs, according to the administration.

The plans are meant to boost the effectiveness of a $787 billion stimulus measure sought by Obama and approved by Congress in February. The projects will be a key focus of recovery efforts during the next three months and create or save four times more jobs than during the first 100 days since the rescue bill became law, according to a White House news release……..

The new projects are being framed as the beginning of a “summer of accelerated Recovery Act activity” by the administration and include new services at health centers in 50 states, work on 107 national parks, improvements at airports, highway locations and veterans’ medical facilities. They will also provide funding for schools to hire more teachers.

via Obama Unveils New Projects, Says Economy Has ‘Long Way to Go’ – Bloomberg.com.

Apparently no consideration is given to the economic value or sustainability of these government jobs funded at taxpayer expense much less the economic loss and jobs lost by virtue of the excessive government spending. Hiring more teachers as part of the summer of accelerated Recovery Act activity, now that’s a plan. Seems this administration may be confusing activity with progress!

Tom Motherway, tom@renohayek.com

Mark Steyn gives forth with a little holiday humor in his NRO May 23rd column: While on a recent Vermont jaunt he mistakenly picked up a local paper in which a rare quarter page ad caught his eye. This help wanted ad was from SEVCA, South-Eastern Vermont Community Action, an anti-poverty agency, community organizers, just like our president. Seems that SEVCA is advertising in all the local papers seeking applicants for positions funded by the American Recovery & Reinvestment Act (ARRA), you know the “stimulus,’ our president’s promise to “create or keep” 2.5 million jobs. By golly, he’s actually CREATING eight new positions according to the ad. These included “ARRA Project Coordinator,” “Grantwriter,” and “Marketing Specialists,” all of which had to do with getting more money from the federal trough. Mark’s piece proceeds:

I don’t want to give the impression that every job funded by the stimulus is a job coordinating the public awareness of programs for grant applications to coordinate the funding of public awareness coordination programs funded by the stimulus. SEVCA is also advertising for a “Job Readiness Program Coordinator.” This is a job coordinating the program that gets people ready to get a job. For example, it occurred to me, after reading the ad, that I might like to be a “Job Readiness Program Coordinator.” But am I ready for it? Increasing numbers of us are hopelessly unready for jobs. Ever since last November, many Americans have been ready for free health care, free daycare, free college, free mortgages — and, once you get a taste for that, it’s hardly surprising you’re not ready for gainful employment. I only hope there are enough qualified “Job Readiness Program Coordinators” out there, and that they don’t have to initiate a Job Readiness Program Coordinator Readiness Program. As the old novelty song once wondered, “Who Takes Care of the Caretaker’s Daughter While the Caretaker’s Busy Taking Care?” Who coordinates programs for the Job Readiness Program Coordinator while the Job Readiness Program Coordinator’s busy readying for his job? If you hum it, I’ll put in for the stimulus funding.

Oh, and let’s not forget the new job of “VITA Program Coordinator.” VITA? That’s “Volunteer Income Tax Assistance.” It’s an IRS program designed “to help low and moderate-income taxpayers complete their tax returns at no cost.” The words “no cost,” by the way, are used in the new Webster’s–defined sense of “massive public expenditure.” Whoops, I mean massive public “investment.” You might think, were you a space alien recently landed from Planet Zongo, that, if tax returns are so complicated that “low and moderate-income taxpayers” have difficulty filling them in, the obvious solution would be to make the tax code less complex. But that’s just the unfamiliar atmosphere on Planet Earth making you lighthearted and prone to cockamamie out-of-this-world fancies. Put in for a Job Readiness Program, and you’ll soon get with the program.

Of course, it’s not just “low and moderate-income taxpayers” who have difficulty completing their tax returns. So do high-income taxpayers like Treasury secretary Timothy Geithner. Tragically, they’re ineligible for the “Volunteer Income Tax Assistance” program. Indeed, the Treasury secretary seemed under the misapprehension that it was a “Volunteer Income Tax” program, which would be a much better idea. But, being ineligible for VITA, Secretary Geithner was forced to splash out $49.95 for TurboTax and, simply by accidentally checking the “No” box instead of “Yes” at selected moments, was able to save himself thousands of dollars in confiscatory taxation! Oops, my mistake, I meant that, tragically, by being unable to complete his tax return due to a lack of Volunteer Income Tax Assistance, Timothy Geithner was the only one of 300 million Americans to pass the Treasury Secretary Job Readiness Program.

via What Are We Stimulating? by Mark Steyn on National Review Online.

I too have had a taste of the “stimulus.” On returning home from a recent vacation I found 27 voice mail messages on my office phone, a full 19 of these were offers to help me refinance my mortgage, but only if I met the necessary deadbeat credit criteria. Wonderful world!

The sad part is that real tax money-either current or borrowed-is used to fund this crap. What we don’t pay, our children and grandchildren will. And, at the end of the day, Obama will rightly claim that he has indeed “created of kept” 2.5 million jobs. And the American public is too dumb to see Obama’s “sleeves off your vest” turn of phrase: with the size of our employment base there will always be 2.5 million jobs kept! Bravo.

Tom Motherway, tom@renohayek.com

Don Parsons passed on an excellent analysis of the causes of our current recession by Steven Gjerstad and Vernon Smith published in the April 6th edition of the Wall Street Journal. The comparison of the relatively mild tech bubble with the devastating real estate bubble is particularly enlightening; in one case market losses were easily absorbed, in the other governments were brought to their knees. There are many fathers of each bubble. The difference is that the real estate losses were transferred to the financial markets through significant leverage.  The government action in each case is clearly distinguishable. 

The commentary on this excellent analysis is contained in four letters to the editor in the April 9th edition of the WSJ. These by economists contain supplemental ideas as well as some criticism.

The combination of analysis and commentary gives us an in depth study of our current troubles and the government’s attempts to overcome them.

It’s hard to believe but Obama’s Treasury is giving two bankrupt auto companies, GM and Chrysler, the job of administering $3.5 Billion in credit for the auto-parts companies. See the Bloomberg item here. So what we have is a government that is working its way to bankruptcy trying to support two bankrupt auto companies giving them the authority to manage $3.5 Billion of taxpayer money. Great to know Washington is managing our tax dollars so astutely!

Tom Motherway, tom@renohayek.com

Sowell hits the nail on the head on the AIG bonus brouhaha: it’s really a duplicitous defense for Barney Frank and Chris Dodd. Of course our  publicity seeking, come-to-me-for-everything president poured a lot of gasoline on the fire which may indeed cause a backfire.

Rep. Barney Frank has threatened to summon these executives before his committee and force them to reveal their home addresses — which would of course put their wives and children at the mercy of whatever kooks might want to literally take a shot at them.

Whatever the political or economic issues involved, this is not the way such issues should be resolved in America. We are not yet a banana republic, though that is the direction in which some of our politicians are taking us — especially those politicians who make a lot of noise about “compassion” and “social justice.”

What makes this all the more painfully ironic is that it is precisely those members of Congress who have had the most to do with creating the risks that led to the current economic crisis who are making the most noise against others, and summoning people before their committee to be browbeaten and humiliated on nationwide television.

No one pushed harder than Barney Frank to force banks and other financial institutions to reduce their mortgage-lending standards in order to meet government-set goals for more home ownership. Those lower mortgage-lending standards are at the heart of the increased riskiness of the mortgage market and of the collapse of Wall Street securities based on those risky mortgages.

Sen. Christopher Dodd has played the same role in the Senate as Barney Frank played in the House of Representatives. Now both are summoning government employees and the officials of financial institutions before their committees to be lambasted in front of the media.

Dodd and Frank know that the best defense is a good offense. Both know how hard it would be to defend their own roles in the housing debacle, so they go on the offensive against others who are in no position to reply in kind, given the vindictive powers of Congress.

This political theater is in one sense cheap beyond words. In another sense, it is costly beyond words.

It is cheap because the politicians who are creating this distraction from their own role also voted for the very legislation that enabled contracted bonuses to be paid by companies like AIG that received government bailout money. If members of Congress can’t be bothered to read the laws they pass, then they have no basis for whipping up lynch-mob outrage against people who did read the law and acted within the law.

via Bad Actors by Thomas Sowell on National Review Online.

Come to think of it, there isn’t a day that I haven’s seen BHO on TV. He must be addicted!

Tom Motherway

The Road to Dependency is the Road to Serfdom

Below find an excellent Orange County Register editorial on one direct effect of Obama’s stimulus bill, the re-creation of welfare dependency. The bill essentially repeals Clinton’s successful welfare reform signed into law in 1996. Even liberal Slate magazine’s Mickey Kaus termed this, “a liberal conspiracy to expand the welfare rolls.”

Better yet, the comment at the end of the article. It’s right on point. You get votes by addicting voters! Political parties are in the business of getting votes.

The futility of the whole sham was more eloquently expressed in a quotation that Gary P sent earlier today:

You cannot legislate the poor into freedom by legislating the wealthy out of freedom. What one person receives without working for, another person must work for without receiving. The government cannot give to anybody anything that the government does not first take from somebody else. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that my dear friend, is about the end of any nation.. You cannot multiply wealth by dividing it.”
Dr. Adrian Rogers, 1931-2005

Atlas will indeed shrug, the question is how long it will take to pick up the pieces. 

tjm

Editorial: Road to dependency

Without secrecy, panic and haste, the stimulus bill could never have passed.

It is becoming increasingly clear that the massive “stimulus” bill rushed through Congress and signed by the president yesterday, was neither intended nor designed to be an economic stimulus bill in the classic Keynesian sense.

Under Keynesian theory (which is shaky, but leave that aside for the moment), the important thing for the government to do in a downturn is to inject as much money into as many parts of the economy as possible, as quickly as possible.

The quickest way is through tax cuts or (as some suggested) suspending the Social Security and Medicare taxes (both systems are financially unsustainable in their present form anyway) for at least a year, giving people more money in their pockets right away.

Another way to do stimulus, as Robert Rector, welfare and entitlement analyst for the conservative Heritage Foundation, reminded us, would have been to give everybody who received an Earned Income Tax Credit payment last year another payment of similar size immediately. “You could have injected $50 billion into the economy in 14 days, and done it through putting money into the hands of low-income people,” Mr. Rector told us.

The bill did expand the EITC and create several other “tax credits” for people who didn’t have enough income to pay taxes. But it won’t put that money into the economy until April 2010. Some quick stimulus!

One particularly egregious aspect of the bill is that it essentially overturned one of the signal policy achievements of the 1990s, the welfare reform bill signed by former President Clinton in 1996. That reform not only reduced the Aid to Families with Dependent Children caseload by two-thirds, it reduced the poverty rate, especially for minority children, and put millions of formerly dependent people to work and on the road to independence.

The mechanism was simple. Prior to 1996, the federal government essentially subsidized state governments for each new person added to the welfare rolls (and punished them by removing funding when people went off welfare, a perverse incentive).

The 1996 reform gave each state a block grant, calculated on the basis of population and other factors, giving states an incentive to target money at those who truly needed it and the flexibility to spend the money effectively. It worked.

The new “stimulus” bill, however, provides $4 billion to be spent by paying 80 percent of the cost of each new recipient. So for every $1 a state spends on a new welfare “client,” a state gets $4 in “free” money from the feds. The incentive, then, is to add as many people as possible to the welfare rolls. Mickey Kaus, the heterodox liberal blogger for the online magazine Slate called it a “liberal conspiracy to expand the welfare rolls.”

Was this change triggered by the need for extra assistance during a recession? Hardly. The reform law included a contingency fund for quick distribution to states with high unemployment. That fund could have been increased, to be distributed under the old formula. Besides, the bill included an expansion of unemployment benefits.

It is difficult to interpret the decision to change the funding formula and eliminate the Clinton-era welfare reform measure as anything other than a deliberate attempt to increase the number of people dependent on government welfare payments.

The bill also contains a half dozen new entitlements or expansions of existing programs. The cost is variously estimated (people are still scanning the 1,400-page bill that no member of Congress could possibly have read for more surprises) at between $220 billion and $250 billion a year in ongoing additional welfare spending.

If these radical increases in the welfare state had been proposed through ordinary congressional procedures – subcommittee hearings, witnesses from all sides, committee hearings, proposed amendments, a modicum of publicity – it is unlikely they would have stood a chance of passing. But the bill was assembled in secret and passed in haste encouraged by presidential inducement of panic, without even a pretense of due deliberation. So much for transparency.

windfall wrote: Let me make this real simple for you.      If you are a political party, you are in business to win elections. To do that, you need voters. If you are the party of say the long distance runners, you want to create more long distance runners, either by importing them or by influencing voters already here to become long distance runners. If you are the party of the rich, you want to create more rich voters. You do this by removing impediments to work, saving, investment and production. You lower tax rates and reduce the burden of government. If you are the party of the poor, you want to create more poor voters. You do this by increasing impediments to work, saving, investment and production. You raise tax rates and increase the burden of government. If this still doesn’t create enough poor voters to solidify your powerbase, you import more poor people and put them on a path to citizenship or just register them to vote anyway. And if this still doesn’t create enough poor voters, you finally just pay people outright to stay dependent on government, which ensures that they never get ahead. The path to financial independence has an early fork in the road. One way leads to dependence, one to independence. In order to qualify for government handouts, you need to present and document yourself as a victim. In order to get ahead, you need to accept the axiom that “if it’s going to be, it’s up to me”. These two positions, states of mind really, are diametrically opposed. It is virtually impossible to hold both concepts of oneself simultaneously. This is why you can choose to get by or you can choose to get ahead but you can’t choose both. Of course, you can always go back and revisit that choice. And that is why the welfare reform of the 1990s worked in terms of weaning people off the welfare rolls and onto a different, more responsible, more productive and, ultimately, more independent path. In repealing welfare reform as well as encouraging illegal immigration, motor voter laws and the right to vote without providing even basic identification, and by constantly pushing for higher taxes, more government intrusion and intervention into business as well are more borrowing and spending, Democrats are simply doing everything in their power to make it easier to get by and harder to get ahead. They’re hoping that when millions of voters and potential voters reach or revisit that fork in the road, they will choose dependency. What’s so difficult to understand about that? After all, they are the party of the poor. They need to create as many poor people (and as few rich) as possible. 2/18/2009 7:46:57 AM Recommend(52) Report Abuse

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