Thursday, August 19, 2010

Buffaloing Readers on Stimulus Impact

When I see a letter written by a union representative, I expect muddled thinking on economic issues. Steven Buffalo of Operating Engineers Local 139 does not disappoint. Read it here.

To paraphrase his point of view, hundreds of members of his union are working this summer on road projects, thanks to the stimulus. These jobs are proof that the stimulus has created jobs and those who suggest otherwise are lying or believing a lie. In his industry they "measure how much work is getting done by counting hours worked" (a rather disturbing means of measuring work IMHO) and his members hours have been in decline in recent years. According to Buffalo, building construction and underground utility work is down 64 and 26% respectively, but road building has increased by 4%. He thanks Reps Cory Mason and Bob Turner and Senator John Lehman for the road work.

I won't quibble with Buffalo's stats. For the sake of this discussion, let us assume they are correct. What Buffalo misses of course is that the money for road projects comes from taxing current or future profitable activities. Do a bit too much of that and you get less entrepreneurial activity. This might help explain the 64% decrease in building construction. And it might help explain the high and getting higher unemployment numbers conveniently overlooked by Buffalo. But his members have jobs and perhaps that is the extent of his concerns. For those of us concerned about the general welfare, we need to judge the stimulus by a different measure, namely, the employment numbers. And by that measure, the stimulus is a failure. And that is no lie Mr. Buffalo.


Anonymous said...

. . . and we are pumping millions of dollars into "educational institutions" to retrain people when when their jobs are eliminated. Instructors and admins making millions to retrain people with twenty years experience in a manufacturing job and making 60K, to be nurses aids making 17.5K, and good luck getting THOSE jobs. Yep, that's the (expensive, taxpayer-funded) solution.

Sean Cranley said...

After 30 years of CONpolicies and 8 years of the shrubster caused this economic disaster the stimulus could be considered a success if it it had merely prevented the loss of more jobs. However it DID actually create jobs and is helping to repair our neglected and crumbling infratructure, unlike TARP, Bush's Big Boy Bankster Bailout.

Denis Navratil said...

Sean, if the stimulus should be considered a success, should we double or triple down? If it is creating and saving jobs, hell, why not have a stimulus 50 times as large, or 100 times, whatever it takes to get full employment and prosperity for all?

Two questions for you Sean.
1) Can governments ever spend too much in the aggregate on social programs?

2) If yes, what are the signs and or consequences of doing so?

Anonymous said...

Although I don't read anything from Seany, I have no doubt this was a zinger and you are kind and patient to respond. I am so glad that he signs his name - he wears his stupidity like a badge of honor.

Nemo said...

sean, hiring a bunch of census workers and counting them twice (or more) is not the answer.

Let's see what Intel chief executive Paul Otellini (a guy that knows a thing or two about creating jobs) has to say:

"I can tell you definitively that it costs $1 billion more per factory for me to build, equip, and operate a semiconductor manufacturing facility in the United States," Otellini said.

The rub: Ninety percent of that additional cost of a $4 billion factory is not labor but the cost to comply with taxes and regulations that other nations don't impose. (Cypress Semiconductor CEO T.J. Rodgers elaborated on this in an interview with CNET, saying the problem is not higher U.S. wages but anti-business laws: "The killer factor in California for a manufacturer to create, say, a thousand blue-collar jobs is a hostile government that doesn't want you there and demonstrates it in thousands of ways.")

More here

9 Weeks 6 Days until the revolution. Governor Walker, Senator Johnson, I like the way that sounds.

Denis Navratil said...

Nice comments Nemo as usual but I was hoping Sean would answer my questions. Won't hold my breath.

Sean Cranley said...

Denis, 1) Yes of course the government can spend too much, why did Reagan and Bush do that? The stimulus bill however is actually more an investment in our crumbling infrastructure thant a traditional "social program" as you call it and attempt to use public spending in the absence of private spending to create jobs and demand in the short term to get us out of this disasterous economic mass caused in large part by so called conservative policies

2)The result of too much government spending is either higher taxes, onerous debt or both. Government borrowing can lead to high interest rates which dampen investment and result in less wealth and fewer jobs. Etc. etc etc.

I think we'd agree that federal government spent WAY too much between 2000 and 2008. Economists disagree on whether stimulus is a good idea or not. I don't really know. If Obama hadn't done the stimulus and the economy failed to improve or got worse I'm sure the righties would screaming bloody murder about the too. What're ya goonna do?

Personnally I'd restore the tax rates to the pre-Reagan, pre-massive federal debt levels and re-redistribute some of that massive wealth grabbed by the top couple percent of Americans over the last 30 years and restore some balance instead of that supplyside nonsense.

Sean Cranley said...

Nemo, Maybe Mr. Intell should pick somewhere other state than California for his factory.

But clearly we should be more like China where the factory gets built where ever the fascist party bosses say it will once the proper palms are greased, of course.

We should also adopt their labor and environmental standards. I have a friend who travels there on business regularly and he can't breathe in Beijing, hell he can't see half the time. And they dump whatever they want where ever they want. Environment and health be damned, let Ohio's Cuyahoga River blaze forth in glory once more!

Actually considering the 11 dead in the gulf, all the oil there and elsewhere, the 29 dead miners, millions of tons of coal ash and mountian top clogging river valleys among other things we seem to be working fast in that direction. From 9/11 to eggs, to the financial meltdown and beyond, your deregulatory dogma is a demonstrated failure along with false religion of free markets and free trade that are selling us down the river.

Do you know that half of what we call our international trade is what once were American companies in foreign countries selling thier products to their American based branch? That's not trade that's outsourceing jobs and production. How much longer will we remember how to make things if we allow this foolishness to continue unabated?

As for your "revolution" I don't make tea leave predictions, such is the realm of fools and gamblers who delude themselves that they can predict the future. But considering that you're on the side of the plutocrats and oligarchs like the billionaire Koch (pronounced cock) Bros who are financing the teabaggers. Considering that you side with those who seek to re-establish inherited aristocratic rule by wealth. I'd say counter-revolution is a much better term for your money god worshiping yearnings to put another millionaire demigod from your pantheon into the millionaire's club in the Senate to represent We (the millionaire) People.

Nemo said...

sean, "millionaire demigod"? I thought you would have liked Wisconsin's very own back-bencher, Herb Kohl.

As for predictions, did you see the lead on the left leaning Politico site today? Heh.

Denis Navratil said...

Sean writes: Yes of course the government can spend too much, why did Reagan and Bush do that?

So if Reagan and Bush spend too much, it is bad. Yet when Obama spends as much and a hell of a lot more, it is stimulus and therefor good? Why isn't the spending of Reagan and Bush considered stimulus and therefor good? Why isn't Obama's spending considered excessive and therefor bad?

Answer: Because Sean you are an intellectually dishonest partisan hack.

Sean Cranley said...

Tisk tisk, sticks and stones Mr. Pot?

Denis asked: “So if Reagan and Bush spend too much, it is bad. Yet when Obama spends as much and a hell of a lot more, it is stimulus and therefor good? Why isn't the spending of Reagan and Bush considered stimulus and therefor good? Why isn't Obama's spending considered excessive and therefor bad?”

Answer: The Republican S$^% sandwich handed to us all. Obama’s deficits were written in long before he took office. The current deficits are the result of the Republican Wars, the Republican Tax Cuts for the Rich and the of Course the Great Republican Recession and resultant Republican reduced tax revenues. You can read about it in the link below or in the excerpts I’ve provided. Bon Apetite.

A. Kettle - Partyson Hack

Whoever won the presidency in 2008 was going to face a grim fiscal situation, a fact already well known as the presidential campaign got underway. The Congressional Budget Office (CBO) presented a sobering outlook in its 2008 summer update,[1] and during the autumn, the news got relentlessly worse. Fannie Mae and Freddie Mac, the two government-sponsored enterprises (GSEs) that became embroiled in the housing meltdown, failed in early September; two big financial firms — AIG and Lehman Brothers — collapsed soon thereafter; and others teetered. In December 2008, the National Bureau of Economic Research confirmed that the nation was in recession. By the time CBO issued its new projections on January 7, 2009 — two weeks before Inauguration Day — it had already put the 2009 deficit at well over $1 trillion.[2]

The government put Fannie Mae and Freddie Mac into conservatorship in September 2008.[4] In October of that year, the Bush Administration and Congress enacted a rescue package to stabilize the financial system by creating the Troubled Assets Relief Program (TARP). Together, TARP and the GSEs accounted for $245 billion (including extra debt-service costs) of fiscal 2009’s record deficit.

Just two policies dating from the Bush Administration — tax cuts and the wars in Iraq and Afghanistan — accounted for over $500 billion of the deficit in 2009 and will account for almost $7 trillion in deficits in 2009 through 2019, including the associated debt-service costs. [6] (The prescription drug benefit enacted in 2003 accounts for further substantial increases in deficits and debt, which we are unable to quantify due to data limitations.) These impacts easily dwarf the stimulus and financial rescues. Furthermore, unlike those temporary costs, these inherited policies (especially the tax cuts and the drug benefit) do not fade away as the economy recovers (see Figure 1).

President Obama’s 2011 budget proposes to reduce anticipated deficits over the next ten years, chiefly by letting the Bush tax cuts for high-income taxpayers expire on schedule, closing certain tax loopholes and reforming the international tax system, keeping estate taxes at their 2009 parameters, enacting health care reform, and freezing (in aggregate) most appropriations for non-security domestic programs. The President also supports another round of temporary recovery measures that would boost the deficit in 2010 through 2012, a proposal that is appropriate in size and well targeted.[8] Center on Budget and Policy Priorities’ analyses have found that in aggregate, the President’s proposals would reduce deficits over the 2011-2020 period by an estimated $1.3 trillion.[9]

The health reform legislation begins that process. It takes important initial steps to restructure the health care payment and delivery systems and to move away from paying providers for more visits or procedures and toward rewarding effective, high-value health care. But restraining health care cost growth will not itself be sufficient to address the long-term fiscal problem. Other actions also will be needed, including steps to raise additional revenue and make changes in other programs.

Sean Cranley said...

Well Nemo my response is that;

A) I'm neither a big fan nor a big detractor of Mr. Kohl's, but I'm not a fan of rich guys buying elections and a seat at the table no matter which party they've allied themselves with. And I'm definitely opposed to the fact that the Senate is now almost exclusively the province of millionaires who represent a pawltry 4% of We The People.

B) People who vote based soley on the current economic conditions without a thought to the bigger picture and who is actually responsible for those conditions are almost as deeply moronic as those who vote based on 30 second TV commercials. We'll see how many morons we've generated here in the land of the thought free and the home of the knave.

As for me, I'm a liberal and that of course, according to that unimpeachable font of truth and insight, El Snortbo, makes me one of the Hate America First Crowd. And being that I do not have memory of a gnat nor the grasp of an ameoba, I'm VOTING REPUBLICAN. In fact I'm going Teabag all the way!

If America is to fall then who better to bring that to fruition than the most extreme Republicans we can get? Who else will:

Sean Cranley said...

Lead us into expensive foreign misadventures for fun and profit spending blood and treasure and making us hated and mistrusted by more and more of the rest world, even our allies?

Lead us into free trade where we trade away our jobs, our livelihoods, our know-how and even our sovereignty to benefit the few of us who make their fortunes as CEOs and major shareholders in nationless corporations.

Lead us into free-market fundamentalism, where the wise and all knowing hand of the market place (and those who manipulate it and make the rules) undermine the public interest and the middle class for their narrow selfish interest.

Lead us into deregulatory shangra-la where our money isn’t safe from predators, let alone our workers, environment, food, economy or our consumers.

Lead us into the redistribution of wealth where more and more of the resources generated by our people and our land are concentrated into the hands of fewer and fewer mega-rich who wield their money as political weapon against We The People to control our government and reap even more for themselves.

Lead us into ignorance where public education is destroyed to create a large underclass of insecure, low cost workers and where science that threatens interests of the economic powers that be is twisted and undermined in the short-term interest of the few.

Lead us into fundamentalist religiousity, backward thinking and vile xenophobia

Lead us into hatred, fear division and manipulation by the GOPunditry and their incessant GOPropaganda lies.

Yes that pinnacle of virtue, El Snortbo has most truthfully proclaimed that as a Liberal, I hate everything about America. And that’s why I’m voting Republican, to take our country back(wards)!