Does Anyone feel like Bailing

[TheMercenary]

Originally Posted by classicman

[b][center]"Capitalism as we knew it is dead."

Good post classic.

[Clodfobble]

Well, 2012 is coming...

[classicman]

One mans perspective of things from the Seattle area . . .

"We opened the window behind me and threw eight hundred billion dollars out of it."

That was how an aide to a local congressman described to me the economic-stimulus act when it passed in the winter of 2009.

The aide didn't mean it would all be a waste. Or would fail to boost a cratering economy.

He meant that what was unusual about the American Recovery and Reinvestment Act, other than its staggering cost, was that it was a smorgasbord. A huge experiment in infusing borrowed cash into a gazillion pre-existing channels, from government social programs to grants for road construction to walking-around money in worker paychecks.

It was an emergency. Seattle Congressman Jim McDermott described it as "Congress flying blind."

So here we are a year and a half later. It seems obvious the experiment helped stop a free fall. You can see that in areas where the stimulus has ended. The housing market, for instance, propped up for months by stimulus tax credits, has dropped sharply since that program expired.

But you don't have to be an economist to see that Congress swung and missed on the issue of jobs.

All that spending hasn't gotten many back to work. Take the freshest data for Seattle and King County. In the first three months of 2010, the act is credited with paying for 2,712 jobs here. That's in a county with a labor force of 1.1 million and 90,000 more currently jobless.

A few thousand jobs in three months is better than nothing. But it's also not much. It shifts King County's unemployment rate by only two-tenths of a percentage point.

Why hasn't the stimulus stimulated us more? I poked around at the "track the money" website, recovery.gov. That answer is pretty simple: Most of the money isn't going to jobs.

A third of the $800 billion was for tax cuts. A huge mistake, in my view, as it largely gave payroll-tax refunds to people, like me, who already have jobs.

Another third went to shore up the states' health and education budgets. I'm OK with this part — thousands of schoolteachers, health-care workers and researchers at the University of Washington have kept their jobs, at least for now.

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The last third was sent out as grants to try to create actual jobs.

The best success there has been in road construction. But elsewhere, most stimulus jobs haven't gone to the jobless. Usually workers were spared from being laid off. That's a good thing, but even there the results were mixed.

Here's a typical example: A group of local cities got $4.9 million in stimulus for community crime prevention. It hasn't all been spent yet, but so far here's what they say they did with it:

"Bellevue sent two officers to 'Force Science Certification Course.' Des Moines purchased a transport van. Federal Way purchased 4 tasers and software. Kenmore purchased equipment for their Active Shooter and patrol/SECTOR program. Kent hired a Population Manager. Kirkland had officers working OT for courtroom security. SeaTac purchased 5 tasers. Seattle retained victims advocates and grant staff positions."

The cities were saved from laying off 24 staffers. But the punch line is that for this stimulus grant, covering 18 cities, the grand total of new jobs created was: One.

That stimulus cash is being used to buy stun guns and vans points to a larger problem. Which is that little of lasting value is being created by the most expensive piece of legislation in American history.

link

[classicman]

The cities were saved from laying off 24 staffers. But the punch line is that for this stimulus grant, covering 18 cities, the grand total of new jobs created was: One.

That stimulus cash is being used to buy stun guns and vans points to a larger problem. Which is that little of lasting value is being created by the most expensive piece of legislation in American history.

I wonder how prevalent this description of stimulus funding is. Since the jobs saved was added as a descriptor, it seems to have muddied the feedback - intentionally or otherwise.

[classicman]

It may be that the last people in America who believe that the $862 billion economic stimulus of February 2009 created millions of net new jobs are Vice President Joe Biden and the staff economists in the White House. Yesterday, President Obama's chief economist announced that the plan had "created or saved" between 2.5 million and 3.6 million jobs and raised GDP by 2.7% to 3.2% through June 30. Don't you feel better already?

Christina Romer went so far as to claim that the 3.5 million new jobs that she promised while the stimulus was being debated in Congress will arrive "two quarters earlier than anticipated." Yup, the official White House line is that the plan is working better than even they had hoped.

We almost feel sorry for Ms. Romer having to make this argument given that since February 2009 the U.S. economy has lost a net 2.35 million jobs. Using the White House "created or saved" measure means that even if there were only three million Americans left with jobs today, the White House could claim that every one was saved by the stimulus.

The White House also naturally insists that things would be much worse without the stimulus billions spent on the likes of Medicaid payments, high speed rail projects, unemployment benefits and windmills. Mr. Obama said recently in Racine, Wisconsin that the economy "would have been a lot worse" and the unemployment rate would have gone to "12 or 13, or 15 [percent]" if government hadn't spent all of that money.

This is called a counterfactual: a what would have happened scenario that can't be refuted. What we do know is what White House economists at the time said would happen if the stimulus didn't pass. They said the unemployment rate would peak at 9% without the stimulus (there's your counterfactual) and that with the stimulus the rate would stay at 8% or below. (See the nearby chart.) In other words, today there are 700,000 fewer jobs than Ms. Romer predicted we would have if we had done nothing at all. If this is a job creation success, what does failure look like?

All of these White House jobs estimates are based on the increasingly discredited Keynesian spending "multiplier," which according to White House economist Larry Summers means that every $1 of government spending will yield roughly $1.50 in higher GDP. Ms. Romer thus plugs her spending data into the Keynesian computer models and, presto, out come 2.5 million to 3.6 million jobs, even if the real economy has lost jobs. To adapt Groucho Marx: Who are you going to believe, the White House computer models, or your own eyes?

Or, as Milton Friedman used to say, "there's no such thing as a free lunch." The money government spends does create some jobs—the folks working on road projects, say—but that money has to come from somewhere, which means taxing or borrowing it from areas of the private economy that are nearly always more productive. This doesn't mean that government spending is always a bad idea, but it does mean that government spending as economic stimulus is fanciful.

Harvard economist Robert Barro first blew apart Keynesian assumptions with his famous 1974 essay, "Are Government Bonds Net Wealth?" He and Charles J. Redlick, also of Harvard, recently updated this demolition in a new study for the Mercatus Center examining 50 years of defense spending in various countries. They find a multiplier effect of between 0.4 and 0.7. This means that government spending shrinks the private economy, because it "crowds out other components of GDP, particularly investment."

This would certainly explain better than Ms. Romer's computer models why a nearly $1 trillion stimulus has been followed by a mediocre economic recovery, a 9.5% unemployment rate, and almost no net new private job creation.

Link
Just another partisan opinion piece ... move a long nothing to see here.

[TheMercenary]

Bernanke Says Extending Bush's Tax Cuts Would Maintain Economic Stimulus

http://www.bloomberg.com/news/2010-0...o-economy.html

[xoxoxoBruce]

Oh yeah, and wait for the trickle down.

[TheMercenary]

I don't think we will get anything more than a tinkle down from this crowd of scumbags.

[classicman]

http://stimuluswatch.org/2.0/

Take a look at how things are going ... Some seem to be doing well others, not so much.

You can sort it however you like. I sorted by $$$ and the millions upon millions that were spent creating few, if any, jobs is really troubling. I'm chalking this up to bureaucracy, but seriously - DAYUM.


ETA - weird - the sort by "jobs" doesn't seem to be working...
ETA II Fuggit - none of the sorts really work. They shoulda hired UT to make the stupid thing operate properly.

[classicman]

[classicman]

This months installment about the last stimulus

"I'm disappointed that we've only created or retained 55 jobs after receiving $111 million," said Wendy Greuel, the city's controller. "With our local unemployment rate over 12 percent we need to do a better job cutting red tape and putting Angelenos back to work."

Disappointed? ARE you freakin kidding me? Shoot yourself fercrissakes.

According to the audit, the Los Angeles Department of Public Works
spent $70 million in stimulus funds -- in return, it created seven private sector jobs and saved seven workers from layoffs. Taxpayer cost per job: $1.5 million.

The Los Angeles Department of Transportation created even fewer jobs per dollar, spending $40 million but netting just nine jobs. Taxpayer cost per job: $4.4 million.

This is beyond pathetic.

Greuel blamed the dismal numbers on several factors:

1. Bureaucratic red tape: Four highway projects did not even go out to bid until seven months after they were authorized.

2. Projects that were supposed to be competitively bid in the private sector went instead went to city workers.

3. Stimulus money was not properly tracked within departments

4. Both departments could not report the jobs
created and retained in a timely fashion..

"I would say maybe in a grade, a B- in creating the jobs,"

A "B-" Hmmm - maybe thats the problem we need someone to oversee the oversee-ers... I would thinnk thats more like a D- maybe that was a typo.
From Faux

[TheMercenary]

I'm glad you posted this, I mean really, who in their right mind thinks that 55 jobs at a cost of our tax payer monies is really a good deal. I would love to watch Pelosi defend that one.

[classicman]

I was actually trying to figure out what a good number is for job creation. There is the salary of course, but there is a lot more than that including the benefits.
Does anyone know?

[monster]

Originally Posted by classicman

I was actually trying to figure out what a good number is for job creation.

1-800-JOB-CRTN?

[classicman]

Tried calling - that reaches Steve Lowry - some sales rep in Alabama...
I gave him your email