Friday, November 27, 2009

Stimulus? They Got Nothin'

On Thursday, Obama will be hosting a “jobs” summit at the White House. This morning, they gave us a peek of what they are planning. Apparently stupid pills were on the Thanksgiving menu.

The plan consists of four parts and has a price tag of $200 billion.

1. Extending Unemployment Benefits

2. Tax Credits for New Hires

3. Aid for States and Cities

4. Incentives for Environmental Upgrades
Clearly, this won’t work. In fact, it would take an idiot to think it would. Cue Joe Biden.

Extending unemployment benefits? This is a reflex action for Democrats (like raising the minimum wage), and they can’t help themselves. But that's no excuse. This will depress employment, not increase it. The longer the benefits run, the longer people can wait to find work, the longer they can hold out for “better” jobs rather than taking what is available, and the more people will simply use the system as a vacation. So why would this be part of the plan? I’d like to think Team Obama views this as a bribe for lazy people. But I’m afraid they’re not that sophisticated. They actually seem to think this will “spur demand” by ensuring that unemployed people can still afford to buy consumer goods. Morons.

A tax credits for new hires? When has that ever worked? Last week I talked about a payroll tax cut. That spurs employment because it becomes cheaper for companies to add more employees. This is apparently what Team Obama hopes to achieve with this tax credit. But, unlike the payroll tax cut, the employer doesn’t get the benefit of this tax cut until the end of the tax year. That does little to stimulate job growth in the near term. And, since this is a one-time tax cut, there is no incentive to hire anyone in the long term -- or at all. Yes, they are cheaper to hire now, but they become too expensive again the moment the tax ends the following year. This was the same problem Clinton ran into with his 100,000 new cops program. The cops were cheap to hire, but too expensive to keep, so few were hired in the first place. Combine these problems and you have little incentive to hire in the near term or the long term. Perfect.

Aid for states and cities? Filling budget holes just like the last stimulus did which did nothing to create new jobs? No, not this time. This time, Team Obama is thinking of creating make-work jobs like Roosevelt did with the WPA in the 1930s. Talk about throwing good money after bad.

Finally, we come to the only one of the four parts that could possibly result in a stimulus effect! Woo hoo! And most of it will be felt in China or Germany, where environmental hardware is made. Vielen Dank Arschloch! Of course, I could be mistaken because this item really tells us nothing, and appears to be nothing more than the usual “green jobs” hocus pocus. Indeed, the idea of creating “green jobs” through some magic subsidy has become the alchemy of the modern Democratic party. And just as ancient alchemists failed to ever turn lead into gold, the Democrats will find no jobs through their subsidies.

What really amazes me about this plan is that Team Obama is genuinely worried about the economy (because it's killing their agenda and their re-election hopes), yet they don’t seem to be able to come up with any answers. It’s not like the answers are hidden or untried. They are, in fact, quite obvious. So why won’t they do what works? Are they blinded by ideology or stupidity?

I’m actually thinking it’s stupidity.

If it were ideology, they wouldn’t be listening to Mark Zandi, the chief economist at Moody’s Economy and a former advisor to John McCain, on how to solve this problem (apparently all the experts Obama assembled have let him down, so he's turned to a McCainiac -- talk about the blind leading the retarded!). So they don’t seem to be stuck on ideology. But if this is the best they could come up with. . . wow. . . just, wow.


LawHawkSF said...

Andrew: As the aphorism says, "the definition of madness is repeating the same act over and over and expecting a different result." The Obama plan is only slightly different in form, but identical in substance to every other time the gummint has tried to ease an economic downturn. The bigger the downturn, the bigger the "solution," the longer the crisis. You nailed it. Reagan figured it out. Obama won't. Say hello to the New Great Depression.

Writer X said...

Another clunker. It figures. And another summit to put lipstick on a pig.

Andrew, where does the $200B come from? Is it carved out from the Stimulus or is it yet more debt thrust upon future generations?

AndrewPrice said...

Writer X, Yeah, this is just going to be another attempt to grab political cover. But I don't think anyone is buying it anymore -- they want results, which he can't get with this plan.

In terms of spending, as we all know, all money spent by Congress must be accounted for. . . . except when it isn't. ;-)

In truth, I don't think they've worried about that part yet. It certainly won't come from the existing stimulus, because there is no money left available under the stimulus -- despite the claim it's all been spent.

So they'll either need to divert it from somewhere (and I don't think there is anywhere left to do that) or they'll need to raise the debt ceiling again. I'm betting they'll just raise the debt ceiling.

AndrewPrice said...

Lawhawk, The definition of madness and the behavior of liberals is remarkably similar because they put their faith in their leaders rather than their ideas -- this guy will do it right. . . this time.

Good luck.

StanH said...

Keynesian business model, spend, spend, spend. The problem every leftist academic economist makes for every dollar they spend that’s one less dollar a business has to create a job. The original stimulus was nothing but a government/union savings program, I expect them to double down on stimulus (stupid).

I know how you hate conspiracies Andrew, but look into the “Cloward-Piven Strategy.” Two Columbia University professors (real keepers of the free market system) wrote an article in 1966 on how to overwhelm the American system to force a collapse, and after the collapse, change the USA for the better…yuck!

AndrewPrice said...

Stan, Their "strategy" was to get everyone who is eligible for welfare to sign up for it, thereby bankrupting the state and local systems that couldn't afford it and forcing the feds to take over the payment of welfare -- thereby creating a national guaranteed income.

That really has nothing to do with ruining the economy.

And even if it did, the idea that you could ruin the economy by bankrupting the government and that people would then turn to the government is simply ridiculous. First, people do not embrace the creature that destroyed their livelihoods. Secondly, even if they did, the government couldn't do anything at that point because it's totally broke.

Not to mention, while the Blogosphere loves to be terrified of the great and mighty, all-knowing Obama with the secret plan, when has he ever shown any competence in any area? The guy is simply a failure and his team stinks. There is no evil plan at work. He's just Jimmy Carter all over again.

StanH said...

Take it from the source, Columbia professors (Cloward-Piven), or the likes of J. M. Keynes, logic and sense have nothing to do with either. These are the kind of eggheads that Barry would admire, fellow travelers, if you will. I hate to simply apply their incompetence to pure stupidity. Their economic moves have an ignorant, but deliberative purpose, my question, to what ends? Barry, has “zero” functional business experience, the man couldn’t run a business at a profit, because in his feeble brain profit is bad, once again this is something that he has learned in perpetual school, studying at the feet of his Marxist mentors. We are in a parallel universe where up is down, and left is right, so to discount any silly strategy, business model, etc. is choosing not to read the liberal lesson book. What we may see as stupid, they see as reasonable and wise.

AndrewPrice said...

Stan, That's exactly what is going on. They believe in the ideas of a command economy and Keynsian thinking. There's no plan to destroy the country. They think what they are doing will create jobs, cause economic growth, and show the people that their philosophy works. The joke is that it doesn't work.

Said differently, they honestly think this will work because their economic theory tells them it will. The idea that they know this will cause chaos so that they hope to step in just doesn't make sense. You can't be the force to cause the chaos if you want to benefit from it.

LawHawkSF said...

Andrew: I'm not entirely sure that they are not out to destroy the country, though they may not think so or say so. But the change in form that they are trying to implement rises to the level of a change in substance. When the government controls everything, determines the course of your life without your knowledge or consent, controls what you think and what you say, determines how much you are allowed to earn and how much you must pay for the privilege, and controls the economy to the point that everybody is essentially working for the government, is that not, at least from a philosophical viewpoint, "destruction of America?"

If a man murders his neighbor because the neighbor plays loud music late at night, he may think he's doing what's best for the community, but it's still murder no matter what he thinks it is or says it is.

At his inauguration, Obama said he would fundamentally change America. Dr. Obama intends to kill the patient to save him. Sounds like destruction to me.

I would more charitable toward the prevaricator-in-chief if he had merely brought wooly-headed Keynesians into his dreamworld administration. But nobody is going to convince me that he didn't know that he was bringing in Marxist/communist ideologues whose goal has always been to destroy the capitalist system and rule by fiat rather than by law.

AndrewPrice said...

Lawhawk, By the same token, they would say that you are trying to destroy the country.

So what good does that analysis do?

The fact is that there is no secret plan to destroy the economy. They do not want to drive people out of work. They do not want GDP to shrink. None of that helps them in any way. They want to show everyone that their way is better. They are mistaken, not evil. And to spin that into evil plans is just paranoia writ large.

And as for being ideological, most of his advisors are center-left or center-right. Sure, there are outliers, just like there were under Bush or Reagan or Clinton -- did that make those Presidents into secret communists or anarchists or racists?

Seriously, this is the same kind of crap that the left did when they decided that Bush was plotting a military take over the United States.

StanH said...

Invigorating! The theory is not new, the rise of the “National Socialist” in post WWI Germany, 30% unemployment (black male in USA 09 35%), a charismatic leader promising a chicken in every pot, excuse the mixed metaphor, but a very familiar tale. I agree Barry is to dumb, but his handlers are not, Soros, etc. Many of the people he has surrounded himself with, as we now know admire Mao, Castro, Chavez. In my mind this means they hate America, blind ideologs that believe anything but America. So to be prepared is not paranoia, but to be informed. He has stated that deficits are not a problem, no program is to big, healthcare, Cap & Trade, Stimulus, Omnibus, now a possible second stimulus(stupid jobs summit), and just like “Bush” talk of amnesty have picked up again, to be taken up in earnest in 2010, not good. Perhaps not a conspiracy, to many moving pieces, so lets call it a nudge in a certain direction, you choose.

LawHawkSF said...

Andrew: I think you missed my point. Forgetting the outliers, those in the most influential positions in the Obama administration wish to change America to a point that it is no longer recognizable as America. Of course they don't want to destroy America. They just want to create one that is so different from anything we've believed in for 200+ years that they might as well proclaim destruction throughout the land.

I agree. There is no secret plan (and no conspiracy) to destroy America. There is merely an open, public plan to accomplish exactly that by converting America into a Euro-socialist weak sister.

They don't want to shrink the economy intentionally, but that is exactly what they would accomplish if successful. If I grant them full faith in their good intentions, I must still remember what the road to hell is paved with.

And frankly, I don't remember any avowed Nazis or White Supremacists in the Reagan or Bush administrations. But there have been several avowed communists and racists in significant positions in the Obama administration. Those aren't outliers. They're just liars. Any racists or fascists in the Bush/Reagan administrations would have to be ferreted out and inferred from their private activities. Obama's radicals are up-front, public and self-declared. In other words, they aren't "secret" anything. They are convicted out of their own mouths.

So let's be clear. I don't allege any conspiracy. I don't claim that Obama is secretly plotting to take over America and run it as his personal fiefdom. Address that argument to the conspiracy theorists. I am simply saying that by his actions, declared intentions, and the company he keeps at high levels of the government, his plan, were it to succeed, would effectively destroy America in any recognizable form. I also believe that he will not succeed.

Of course the left would say people like me are trying to destroy the country. That's what they're trained to do. In fact, that's what I was trained to do in the 60s, and I don't give a damn what the left thinks. I stand by an historical and constitutional America, and if that can be translated into destroying America, so be it.

AndrewPrice said...


I absolutely believe in being prepared -- that's always good advice, but you need to know your enemy and it doesn't help to spin them into something they aren't. Information is power, but the wrong information just leads to the wrong decisions. If we talk ourselves into believing they are something they aren't, then we will never make the right decisions needed to stop them.

And if we start fighting plans that aren't real, then we waste our time, waste our capital, and waste the respect of the voters.

Obama is a fool and his team is incompetent. That's absolutely clear. His handlers are no better, or he wouldn't be repeating these same mistakes over and over again. There is nothing to be gained from looking weak and stupid and having your agenda fall apart time and time again in Congress.

He has some supporters who are rotten socialist bastards, that's true. But, in all honesty, it's hard to say that Obama is acting like anything that would have been called a socialist in the 1930s-1970s. He continued a socialist-like bailout begun by Bush, sure. But beyond that, there's been no nationalizations. He's raising some taxes, but they are still lower than the rates were under Reagan. He hasn't put a peacenik in charge of the military, nor has he gutted it's capabilities, nor has he surrendered our decision-making to the UN.

Don't confuse ideology with conspiracy. His ideology states up front that they want to expand the power of the government. But that's a far cry from concluding that they "want" to destroy the country in the off chance that somehow he can become a dictator.

Moreover, the analogy to Nazi Germany just isn't applicable.

In Weimar Germany, you had a country that had been disassembled by an external force (the WWI allies), and wanted revenge. Democracy was imposed on the people, even though they had been used to dictatorships for hundreds of years. The government had no power, a crushing debt, a desperate economy, hyper inflation, hyper unemployment. Moreover, there were ideological gangs fighting a war in the streets (armed communists and armed fascists taking each other out with knives and guns as the authorities watched helplessly). Finally, Hilter was put in charge by the military, which had never had a culture of staying out of politics.

None of that exists here.

AndrewPrice said...

Lawhawk, I think you and I are saying the same things. I agree that Obama wants to convert the country into something more like a euro-style soft socialist state. I see no conspiracies to do anything more than that.

As for remaking America. I agree with you. But, I would point out that this is also a matter of perspective. Liberals (not the commie left) would argue that the America they know is a country that:

1. provides welfare to the poor,
2. provides medical care to the poor and the aged,
3. provides income support for people who cannot work (disabilities),
4. provides income support for retirees (and manages their retirements),
5. provides income support to the unemployed,
6. regulates consumer products, food safety, acceptable banking practices, environmental issues, traffic behavior, work place safety, etc.
7. prevents discrimination based on various traits or behaviors,
8. etc.

And that's the America that they know, and they are merely proposing to increase/improve those protections, whereas you and I are proposing a radical re-making of America into a lassie-faire state that it never really had.

LawHawkSF said...

Andrew: Well said. I think the two great minds have come to an agreement again, he said modestly (as if we don't do that fairly regularly). Now what are we going to do about those damned Illuminati?

AndrewPrice said...

Lawhawk, LOL! Agreed. Let go get some virtual beers!

StanH said...

All the pieces are in place for the promised utopia, we are at war with ‘60s radicalism, whether we like it or not. That doesn’t mean that it makes any sense, in fact logic is counter to the ‘60s counter culturist, free love etc. So perhaps what we see as chaos is the intended perception as we move inch by inch into socialism ‘60s style.

I used the Weimar Republic for convenience, there are many examples throughout history, however, using crisis to coalesce power, Caesar – Rome, French Revolution against Louis, etc. The point is as Rahm has said, “never let a crisis go to waste.” You can bet if one doesn’t exist, one will be created, “global warming.”

As far as surrendering our sovereignty to the UN, Barry’s going to Copenhagen we’ll see, and peaceniks in charge of the military, you sure about that, four SEALs going on trial for assault.

A pure dictator is not going to happen in the USA, Americans wouldn’t tolerate it. But we did come close during the American Civil War. Abe Lincoln. He suspended Constitutional rights. but for the right reasons, love of country. Let “war powers” go to someone that hates the country, the results could be quite different indeed.

Do I believe we’ve in the midst of a grand conspiracy, no! But governments do what governments do, and like any living organism wants to survive and grow, …in this case like cancer.

AndrewPrice said...

Stan, I would agree with that. I don't see any conspiracy, but this administration cannot be trusted and left unwatched (in fact, I would say the same about any administration).

I think that their goals are bad for the country. I think they want to expand government influence and control.

And I agree that they would happily exploit a crisis to further those goals. And I agree that global warming is the made-up crisis of our time.

But in the end, the danger is not of a sudden fall into socialism or dictatorship, the danger is the continued slow encroachment of government into more and more areas. That's been going on for decades. Obama is just trying to jump a little further ahead than most administrations.

(Good comments by the way.)

StanH said...

That’s fun : )

Anonymous said...

Sounds like more of the same. I guess all the unemployed are getting is hope for change.

AndrewPrice said...

Anon, That's probably all you're going to get.

Post a Comment