27 Responses to “Let’s Get Together and Do It Again”

1. ConstitutionNotRevolution Says:
   May 26th, 2010 at 11:18 am

   Unless I did the math wrong…

   If you take the CBO numbers at face value (cough cough) and accept even their most rosey projections, it comes to $318,928.57 per “job.”

   If the government had just “paid” corporations and small businesses the TARP money to directly pay for new hires ($30,000 salary +$10,000 in benefits), the private sector would have hired 22.35 million NEW employees. Hmm. There are only 15.3 million unemployed in the country.

   To hire 15.3 million employees at a $40,000 employment package, it would have taken “only” $612 billion. In fact, it would have been even significantly less because those people would not be taking from the system through unemployment benefits, welfare, etc.

   I am not advocating this but it does illustrate how grossly inefficient the ridiculous stimulus package was.

2. Shaun P. Says:
   May 26th, 2010 at 11:22 am

   Well I’ve been thinking ’bout
   All the stimulus we could have had and
   the Dems need lots to run on real bad
   So let’s get Congress to pass
   a stimulus bill again

   (With a thousand apologies to the first musical group I ever loved)

   Sadly, it will never happen - the deficit, dontchaknow, is BIG. And SCARY. And costs MONEY. Our CHILDREN’S money!

   Of course, the alternative is near-double-digit unemployment (or double-digit unemployment, depending on the metrics one uses), which I find BIGGER, SCARIER, and in the long-term, costing MORE MONEY, and plenty of other things, to us and our kids . . .

   Its a cloudless sky, bright sun, and 90+ degrees where I am, so the Beach Boys are very much appropriate for today. Thanks, Steve.

3. Hantu13 Says:
   May 26th, 2010 at 11:31 am

   CnR,

   Have you spent any time reading an economics book?

   The private sector is cutting because of reduced demand for services… By handing them money, why would they hire more people? Even now around 12% of our capacity is sitting idle… The point of the stimulus was to increase demand, not add to the cash balance in corporate bank accounts.

   If you chose not to accept the numbers from the economists at the CBO, Moody’s, Goldman Sachs, JP Morgan, UBS or the IMF- all of whom clearly credited the stimulus with helping sustain a recovery, I’m not sure what figures would convince you otherwise…

4. ConstitutionNotRevolution Says:
   May 26th, 2010 at 12:18 pm

   A) Apparently more time than you have spent with Hooked On Phonics. I never advocated the approach (I even stated that I did not) but merely used it as an example to illustrate how grossly inefficient the “stimulus” was.

   B) Read my OP again. I said, “…to directly pay for new hires…”. In other words, the most likely scenario would have been a $40000 tax credit for new hires. No hire, no credit and not a way to ” add to the cash balance in corporate bank accounts.” 1-800-ABCDEFG

   And in case you missed it, I never advocated the approach (I even stated that I did not) but merely used it as an example to illustrate how grossly inefficient the “stimulus” was.

   C) The CBO, God Bless it, has the disadvantage of being a slave to the numbers given it by the politicians (see healthcare bill). Moody’s is owned in part by Warren Buffett, and most of the rest either are part of the administration, give huge amounts of money to the administration, or has been bailed out by the administration. Not that you even provided information that those institutions even said that…

   You may as well cite an article by Paul Krugman and, btw, what recovery are you talking about?

   And again, I never advocated the approach (I even stated that I did not) but merely used it as an example to illustrate how grossly inefficient the “stimulus” was.

   Perhaps you should invest in an audio economics book and look up ROI…

5. David in Cal Says:
   May 26th, 2010 at 12:32 pm

   Hantu, today it’s a worldwide economy. The private sector can grow by making goods to be sold abroad. Higher taxes on businesses slow the economy. Also, the incredible deficits mean higher taxes are coming. The expectation of higher taxes slows the economy even more.

   BTW that estimate of jobs seems questionable. We have seen many examples showing how loose the government was about how they counted jobs created by the “Stimulus”. Worse, they didn’t count all the jobs lost due to present and prespective cost taxes needed to pay for the stimulus.

   By supposedly creating” 1.7 million jobs, the Stimulus actually drove the unemployment rate UP from 8% to 10%. If it had really created all those jobs, the unemployment rate would have gone DOWN.

   BTW that same article says impact of the stimulus “will peak later this year before tailing off in 2011 and 2012.” So, at best, we paid over $318,928.57 per job to create jobs that will disappear in a year or two.

6. Hantu13 Says:
   May 26th, 2010 at 1:25 pm

   Dave,

   Yes, the private sector can sell things overseas, and in a regular recession, the Fed and Treasury can quietly act to weaken the dollar, and hope to use exports to drive some growth. However, this (as pointed out by every serious economist of any political stripe) has been no ordinary recession. There is a global deleveraging going on, and it is dangerously prone to a very nasty deflationary cycle.

   Also, both yours and CnR’s calculation of $ per job are so simplistic as to be meaningless. The point of the stimulus isn’t to just hand money to someone else, it’s to increase Vt, the velocity of money in the economy. This, as well as the value of anything directly created or invested in is what drives the increase of GDP by 1.7 - 4%. Considering that the economy was contracting by 4% or so prior, that is a massive move forward.

   The problem with giving tax cuts for hiring is that you may only influence employers on the fence about hiring- those who don’t see demand for their goods aren’t going to hire, no matter what, and those on the fence (because they see demand returning) will hire anyway if the economy improves. Finally, direct tax cuts are more likely to be saved than spent, and due to the paradox of thrift, this is not what you need during a deflationary cycle.

   This magical thinking about tax cuts has influenced Conservatives since the days of Reaganomics- and not even they believed the nonsense that gets thrown about now- ask Bruce Bartlett. Tax cuts were one thing when the top marginal tax rate was 70%, as it was under Reagan, but quite another nowadays-

   http://www.usatoday.com/money/perfi/taxes/2010-05-10-taxes_N.htm

   Unfortunately, they’re not magical.

   CnR, if you won’t accept the CBO or any private economist (Moody’s economist was McCain’s economical advisor in the campaign) or any academic, whose numbers will you accept?

   I suspect the answer is- none that don’t conform to your beliefs… The now classic sign of the intellectual collapse of the conservative movement. Buckley would be embarrassed.

   As for tax cuts, you both conveniently forget that the stimulus included almost $300B in direct tax cuts!

7. ConstitutionNotRevolution Says:
   May 26th, 2010 at 1:25 pm

   Here is a link to a chart depicting what the Obama Administration said would happen with unemployment rates if we passed the stimulus or did not pass the stimulus and compares both to the actual unemployment data.

   It only goes until May ‘09 but you can easily put the rate for May 2010 on there and see where we currently are.

   A success for who?

   http://michaelscomments.files.wordpress.com/2009/06/stimulus-vs-unemployment-may2.gif

   Steven and hantu are the equivalent to the sailors who were tasked with hanging the “Mission Accomplished” banner.

8. Hantu13 Says:
   May 26th, 2010 at 1:39 pm

   Are you saying that the economy and jobs situation hasn’t improved since the new Administration took over? Or that GDP is growing?

   Or are you just complaining because a policy you disagree with for ideological reasons turns out to be working..

   BTW, anyone actually use Hooked on Phonics? Seriously… wondering if it’s any good for my kid…

9. ConstitutionNotRevolution Says:
   May 26th, 2010 at 2:05 pm

   Hantu,

   You have a couple of very interesting habits. One is to use the “every single serious economist…” type statement as a proof surrogate. Sorry, it does not work.

   Second, you seem to be an expert in Wikihistory and Wikenomics.

   You completely ignore the negative effects of Keynesian stimulus. All $900 billion of the stimulus needs to be paid back…with interest. That is a per capita debt burden of $10,700. It is unsustainable and ultimately harms the country. Read something from a real economist, perhaps start with Ludwig von Mises’ Theory and History and skip the Wikenomics articles.

   While you are at it, read That Which is Seen, and That Which is Not Seen by Frederic Bastiat. In a sense, you are describing the economics world you can see while remaining completely oblivious to an unseen world.

   We can see a road being built for $10 million dollars. We can also see the jobs created from it. To a Wikonomist, it looks great. However, when we are trained to see what the Wikonomist does not, we see that the $10 million was taken from the taxpayer. This money would otherwise have been spent on things the taxpayers needed more than a new road. You do not see their purchases or the jobs that would have been created if the taxpayers were able to keep the $10 million.

   You stand and admire a road while I admire my new dishwasher, automobile, etc, that has a lasting impact on the economy and does not result in a ridiculous amount of debt that will need to be paid someday.

   As far as what economists I would listen to, I have named some in this post and there are countless more. You have named NOT ONE and even claimed that I would not accept “any academic” or “private economist.”

   I challenge you to point out where I said that.

   And, yes, Buckley would be embarrassed of me. I take consolation, however, in the fact that he would be embarrassed in the things written by 99.8% of the population. Not many can stand with him.

10. ConstitutionNotRevolution Says:
    May 26th, 2010 at 2:15 pm

    I am saying that the jobs numbers have not improved and have worsened. It is an easy look-up. Check the unemployment rate in January 2009 and compare to now. Also, look at the link I provided that shows what the same economists you feel I should accept as the gospel said would happen if we did or did not pass the stimulus.

    The others have improved. However, that is no proof that the stimulus worked (see “That Which is Seen… from my previous post). As far as we know, we could have done nothing and come out much better.

    As far as HoP. One of my masters is in education. Yes, it does work, especially in conjunction with some whole language instruction. (Unfortunately, most believe in all one or the other.)

11. ConstitutionNotRevolution Says:
    May 26th, 2010 at 2:42 pm

    BTW, here is an economist I’ll accept.

    ‘We are spending more money than we have ever spent before, and it does not work. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises. I say after eight years of this administration, we have just as much unemployment as when we started and an enormous debt, to boot.”

    ~ FDR’s Treasury secretary, architect of the New Deal, and close friend, Henry Morganthau, 1939

12. David in Cal Says:
    May 26th, 2010 at 2:58 pm

    The problem with giving tax cuts for hiring is that you may only influence employers on the fence about hiring

    Hantu, I fully agree with you on this point. A tax cut for hiring is a temporary benefit to an employer. The employer realizes that he has to plan for the long-term. A one-time shot doesn’t help much. Stimulus money fails for the same reason. It’s a one-time shot.

    As you pointed out, in theory stimulus is supposed to have a multiplier effect. Actually, the same is true of tax cuts for hiring. Unfortunately, in both cases, the hypothetical multiplier hasn’t actually worked.

    What does work is permanent tax rate cuts, as was so dramatically demonstrated during the administrations of JFK, Reagan, and Bush. By the same token, permanent tax rate increases harm the economy.

    The promise of permanent tax rate increases also harms the economy, because businesses look long-term. Obama and the Dems haven’t exactly promised permanent future tax rate increases, but they created massive deficits which pretty much guarantee this outcome. That’s why the unemployment rate went sharply up, despite the supposed millions of jobs they created.

13. David in Cal Says:
    May 26th, 2010 at 3:21 pm

    Yesterday’s NY Post reports on a practice that makes one doubt the count of jobs supposedly created by the stimulus:

    Last week, one of the millions of workers hired by Census 2010 to parade around the country counting Americans blew the whistle on some statistical tricks.

    The worker, Naomi Cohn, told The Post that she was hired and fired a number of times by Census. Each time she was hired back, it seems, Census was able to report the creation of a new job to the Labor Department. . . .

    Each month Census gives Labor a figure on the number of workers it has hired. That figure goes into the closely followed monthly employment report Labor provides. For the past two months the hiring by Census has made up a good portion of the new jobs.

    Labor doesn’t check the Census hiring figure or whether the jobs are actually new or recycled. It considers a new job to have been created if someone is hired to work at least one hour a month.

    One hour! A month! So, if a worker is terminated after only one hour and another is hired in her place, then a second new job can apparently be reported to Labor.

    http://www.nypost.com/p/news/business/two_more_census_workers_blow_the_OqY80N3DBTvL17VmxKKR0O

14. Hantu13 Says:
    May 26th, 2010 at 3:26 pm

    LoL!

    Should have expected a Rothbard fan… The problem, of course, should be obvious to anyone with an open mind-

    Of course, it’d be better if private citizens and industry were spending. The magic question is- what happens when they don’t?

    One answer is (Mises/Rothbard’s view)- Tough luck. It’s a needed de-leveraging, and let the chips (and asset prices) fall where they may, our system will rebuild afterwards. As for the legions of unemployed and now homeless- a better result than more government activity.

    A more modern, practical view is that a simultaneous global unwinding can lead to a deflationary trap that is completely unnecessarily, and the government can mitigate this by implementing counter-cyclical fiscal policy- save when things are good, spend when things are bad. If intelligently designed, this can also create a mild safety net (unemployment benefits and health insurance) so ppl don’t lose everything because of an externality.

    I don’t intend it as a proof surrogate, just pointing out that among the experts in a very complex field, there is broad agreement on some very basic things that you just don’t accept. And one of the two mainstream parties in this country shares your far from mainstream views…

    You see to view smaller government as a valuable end in and of itself. I, and I believe, most progressives, don’t view big or small government as an end, but as means to an end.

15. David in Cal Says:
    May 26th, 2010 at 6:16 pm

    What’s the actual result of Stimulus on non-government jobs? Here’s a chart showing change in Private Sector jobs by month since Jan., 2009. The non-government job losses from Jan 2009 through March 2010 add up to about 3,500,000. Meanwhile an increase of almost one million would have been needed to keep up with population growth.

    The actual results show the that stimulus failed.

16. David in Cal Says:
    May 26th, 2010 at 6:17 pm

    Sorry, the link above is incorrect. The correct link is http://www.rttnews.com/ArticleView.aspx?Id=1256944

17. ConstitutionNotRevolution Says:
    May 27th, 2010 at 8:02 am

    Hantu,

    Thanks for allowing the veil to slip a little more.

    The truth of the issue is this. Progressives have no interest in the “science” of economics other than how it can be manipulated to achieve its SOCIETAL goals, control over the individual through bigger (and eventually totalitarian) government. The “economists” that you would cite (if you ever did), would be of that ilk, like Krugman. You then claim that they are the “mainstream” without ever providing data that backs the assertion and fall into a proof surrogate and groupthink fallacy.

    My freshman college students could point that out to you.

    You then fill the air with euphemisms like “Progressive”, “modern”, “mainstream”, and “practical.” Unfortunately, there is no substance (or actual evidence) behind it.

    The real agenda of the Progressives was outed in the last century (so they began calling themselves “liberals”) and is beginning to be again.

    You then deny involvement in a proof surrogate, only to fall into the same proof surrogate later in the same sentence. If you would like, I could recommend a good critical thinking textbook that explains to you, in simple language, what a proof surrogate is.

    THIS is evidence: Economists: The stimulus didn’t help

    “In latest quarterly survey by the National Association for Business Economics, the index that measures employment showed job growth for the first time in two years — but a majority of respondents felt the fiscal stimulus had no impact.”

    “About 73% of those surveyed said employment at their company is neither higher nor lower as a result of the $787 billion Recovery Act,…”

    http://money.cnn.com/2010/04/26/news/economy/NABE_survey/

18. David in Cal Says:
    May 27th, 2010 at 11:19 am

    Based on the posts here, ConstitutionNotRevolution and Hantu13 both know more about economics than Pelosi, Reid or Obama. Those three clowns think the government can spend unlimited amounts of money without economic consequences.

19. David in Cal Says:
    May 27th, 2010 at 11:21 am

    AP reports: Economic rebound slowed last quarter

    http://apnews.myway.com/article/20100527/D9FV6P5O0.html

20. ConstitutionNotRevolution Says:
    May 27th, 2010 at 12:45 pm

    Oops. Another myth busted.

    Not exactly relevant to this specific conversation but an unsubstantiated point made on this blog numerous times by Steven and his progressive minions.

    GWU studied spending on regulation and found that spending increased by 31% of inflation adjusted dollars under the Bush Administration.

    http://www.gwu.edu/~regstudies/Reg%20Budget%202010-05-18.pdf

    Of course, to a progressive, no amount is ever enough…

21. MG Says:
    May 27th, 2010 at 3:10 pm

    Harvard Business School is shocked — SHOCKED — to discover that when the government grows, the private sector shrinks:

    http://corner.nationalreview.com/post/?q=NDI2ZjliNDExMDM3MjI4ZGE5ZDBhZjUwYTY3YWU2MjU=

22. David in Cal Says:
    May 27th, 2010 at 6:52 pm

    That HBS study really is surprising. They weren’t looking at
    local government spending paid for by local taxes. They were looking at federal spending (earmarks) which brings extra money into a district. It is striking that the extra earmark money seems to harm local businesses rather than help them.

    I suspect the reason is that the earmark money is badly spent. I think it mostly goes to friends of the Congressman or Senator or to those who made big campaign donations. So, the earmark money isn’t distributed in the way best calculated to help the entire district.

23. Hantu13 Says:
    May 27th, 2010 at 7:08 pm

    The level of epistemic closure in the conservative movement has truly reached magnificent proportions…

    You have essentially decided that if the objective evidence no longer conforms with your world views, you disbelieve the evidence, and that the only reliable voices are your own propagandists.

    I sympathize, because the abject failure of the conservative movement over the past decade must truly be intellectually humiliating and disheartening. The ridiculous alignment of free market ideaologues with social christian conservatives, expeditionary foreign policy and the racially resentful seems so silly in retrospect. The tea party will give it a last hurrah, and the whole edifice will eventually fall apart….

    One hopes that Burke will displace Beck and Limbaugh soon…

24. David in Cal Says:
    May 27th, 2010 at 8:30 pm

    Hantu13, your political predictions look quite plausible. The Democratic Party seems relatively unified around the concept of continually increasing the scope and power of government. In a way that’s almost automatic in any democracy. Those who do not believe in the power of government generally don’t go into government. As a result, the most capable conservatives aren’t running for political office.

    I think bigger and bigger government will lead to a worse quality of life, worse medical care, reduced civil liberties, and more corruption. Who you know will be more important than what you know.

    I fear that a weakened United States will encourage the
    growth of aggressive tyrannies abroad. We’re already seeing that in Russia, Iran, and North Korea.

    In short, I think the liberals’ likely political victory will result in a policy defeat for all.

25. ConstitutionNotRevolution Says:
    May 27th, 2010 at 8:36 pm

    Hantu stated: “The level of epistemic closure in the conservative movement has truly reached magnificent proportions… ”

    Compared to what? The Progressive movement? Too funny. I love it when a progressive takes a kernel from an article written by a conservative or libertarian and runs with it like they had some brilliant revelation. Yes, I’ve heard of Julian Sanchez..

    It’s almost as much fun as when they start quoting founding fathers as if they actually have an ounce of respect for their principles that made this country so great.

    Hantu stated: “You have essentially decided that if the objective evidence no longer conforms with your world views, you disbelieve the evidence, and that the only reliable voices are your own propagandists.”

    What “objective evidence” have you brought to the table? You have supplied ONLY your opinions without supplying a shred of evidence that your claims are even true. Sorry, fallacies and proof surrogates like, “Everyone knows…” are not evidence. You then turn around and use the Alinskyite tactics of calling economists that blow your claims out of the water “propagandists.”

    I guess, CNN, who ran the “Economists: The stimulus didn’t help” headline is run by a bunch of right wing propagandists? Sorry, the only one closing his mind to evidence seems to be you.

    Hantu stated: “I sympathize, because the abject failure of the conservative movement over the past decade must truly be intellectually humiliating and disheartening. The ridiculous alignment of free market ideaologues with social christian conservatives, expeditionary foreign policy and the racially resentful seems so silly in retrospect. The tea party will give it a last hurrah, and the whole edifice will eventually fall apart….”

    Yeah, anyone who considers himself a conservative or a classical liberal must be a government hating, bible beating, war mongering, racist.

    Of course, it was the free marketers that expanded the wealth of this country to unthought of proportions, the social christian conservatives who were behind the abolitionist movement and ran the underground railroad, and the war mongerers who fought back communism (for now).

    Meanwhile, it was the progressives that segregated the military (Wilson), jailed people for free speech (Wilson again), created the Negro Project to kill African-American babies (Sanger), called people of color, Jews, and Catholics “human weeds” (Sanger again), had orgasms over eugenics (the entire movement), advocated review boards to determine who was worthy to live (GBShaw), asked scientists to create a “humane gas” to kill the “unworthy” a decade before the Nazis (Shaw again), loved the Nazis and Mussolini until it became unpopular to do so (the entire American Progressive movement), taught Goebbels the value and tactics of propaganda (Wilson), gave us the “4 Minute Men” (Wilson again)…

    The list goes on and on.

    Hantu stated as he watched Olbermann and Maddow: “One hopes that Burke will displace Beck and Limbaugh soon…”

26. Hantu13 Says:
    May 27th, 2010 at 10:09 pm

    David,

    I’m not sure why you think that Democrats are intent on increasing the size of government- certainly since Carter, conservatives have continuously increased the size of government far more than democratic presidents! Remember, the increase in deficit that Obama faces today has little to do with his policies, but due to the recession and inherited tax cuts.

    You make a very good point that conservatives fundamentally don’t believe in government, which is why they have tended to be poor at actually governing.

    The blind belief you attribute to liberals about the joys of large government has a parallel in the market and corporate worship of the conservative movement. You seem to have forgotten that all sorts of market failures occur pretty regularly- not because the market is inherently flawed, but because we don’t always have perfect information, distortions, externalities, monopolies, etc. In other words, because we are human.

    Also, that while corporations are very effective at maximizing shareholder profit, it’s silly to expect them to act in any way contrary to that goal. Which means- smart money will take advantage of dumb money on the street, power companies will pollute freely and pharma and agribusiness will be less than forthcoming about the risks of their products. Not because they’re evil, but because they’re not really designed or intended to do anything other than drive return… Why on earth would we let them regulate themselves? Even Greenspan, an acolyte of Rand, admitted that his worldview was wrong! What happened to the mistrust of institutionalized power?

    The Democratic party of the past 20 years has learned a lot from the years in the wilderness… The Republicans are intellectually incoherent- I’ve heard elected Republicans castigate Obama for wanting to use executive power to exert his will over the country, and at the same time try to give him the authority to arrest, detain and torture american citizens at will! Does this make any sense?

    As for civil liberties, it was your party’s administration and congress who committed the greatest crimes against traditional american liberties! Who launched an unnecessary war that tied up our military while allowing Afghanistan to go to pieces? Do you not that think that this did more to embolden our enemies than anything Obama has done?

    What is the Republican answer to any of this? More tax cuts for the wealthy ?Invading Iran? Arresting latinos?

    Moving to Galt’s gulch?

    Anyway, don’t take this is a celebration of the democratic party… There’s no shortage of corruption, parochialism and small mindedness there. But, compared to the current iteration of the party of Lincoln, they all look like Washingtons, Churchills and Lincolns…

27. ConstitutionNotRevolution Says:
    June 8th, 2010 at 2:03 pm

    The Left flunks ECON 101? Shocker…..

    http://online.wsj.com/article/SB10001424052748703561604575282190930932412.html?mod=WSJ_Opinion_LEADTop

    I wouldn’t even be surprised if we found out that Keynes, Obama, Pelosi, Krugman, etc were among the adults surveyed…

    And of course Goldman.

Leave a Reply