American Elephants

Here’s Why the Unemployment Situation Won’t Improve Any Time Soon by The Elephant's Child

President Barack Obama has no idea how jobs are created.  There, I said it.  His advisors also  have no idea where jobs come from, or else he’s paying no attention. Let’s start with government jobs.  In his two+ years in office, Obama has added 200,000 new federal jobs. And the unconstitutional ObamaCare law requires the addition of another 1,054 IRS  auditors and staffers at a cost of something more than $359 million.

A new government job is paid for with new taxes (or borrowings) coming from you.  It’s back to the discredited Keynesian theory of money circulating through the economy creating a “multiplier effect”, but pay no attention.  It would be the same deal if the government hired someone to dig a hole and then fill it up, except they wouldn’t be creating all those regulations or other mischief. Government jobs don’t count except to the people who have them and who reportedly are paid at about twice the rate as their peers in the private economy.

Senator Coburn has recently released a report called “Help Wanted,” which looks at federal job-training programs and documents examples of waste, fraud and mismanagement in Obama’s programs.

Nine federal agencies are in charge of 47 employment and job-training programs.

The report concludes that with one exception none of the programs are effective at helping unemployed workers find new jobs.  All but three overlap with another program that provides similar services to similar populations.

The American Recovery and Reinvestment Act (Stimulus) allocated $90 billion for green job technology, including green-collar job training programs.  Vice President Joe Biden said that people who make $20 an hour before taking a training program can make $50 after training.  The problem: there have to be jobs. There were going to be all sorts of jobs for insulation installers, but check the yellow pages — experienced contractors already do that. A study from KIng Juan Carlos University in Spain found that for every new position that depends on energy price supports, at least 2.2 jobs in other industries will disappear due to increased energy costs.

Obama is enthusiastic about electric battery factories and subsidizes them, but news reports note a worldwide glut of battery factories, and little enthusiasm for electric cars. There are thousands of high paying potential jobs in the oil industry in areas that the federal government has barred from exploration.  There are hundreds of high paying jobs in the oil industry in the Gulf of Mexico shut down by first, the Obama moratorium, and once the moratorium was “lifted” by a government refusal to issue permits.  The federal government has been held in Contempt of Court by a federal judge in Louisiana for that action.

The EPA is denying permits to the coal industry which accounts for nearly 50 percent of our power generation.  The Sierra Club has budgeted $18 million and hired 100 activists to promote a worldwide anti-coal campaign.  Environmentalists are mobilizing hundreds of anti-coal groups worldwide who are putting out the false message that coal is dirty, dangerous and unaffordable. Activists are currently tackling the Washington State Legislature to attempt to close a coal plant. If the U.S. does not expand its coal capacity, there will be big hikes in energy prices as the utilities attempt to switch their production of electricity to natural gas.

Obama said during the campaign that he intended “to bankrupt the coal industry.” He’s working on it.

George Will remarked that the existence of abundant and reliable energy “horrifies people who relish scarcity…Today, there is a name for the political doctrine that rejoices in scarcity of everything except government.  The name is environmentalism.”

Obama’s “future jobs,” are for the most part years away.  Any construction job requires design of the project, approvals, estimates, bids, purchase of property, environmental impact statements, lengthy court cases by environmental organizations, before anyone is hired or excavating, grading, materials purchased.  If it’s done by government, it can take a very long time. Constructing things are temporary jobs.

Obama railed at the Chamber of Commerce because businessmen were sitting on funds that they could be spending to create jobs. Many, if not most of those small businessmen report their business income on an individual return.  Obama did not raise taxes on”the rich,”  the category that includes all these businesses, but he insisted on calling it a “tax cut for the rich.” and he was angry about it, and loudly proclaimed that he’d raise it in his next budget — which he has done.  He cannot get it through his head that the uncertainty created by his administration about taxes, regulation, mandates, health care rules, EPA rules, and regulation pouring out of the administration is the reason why businesses are sitting on their funds.  For example, the administration just decided that restaurants should include calorie information on all their menus.

Obama believes that innovation comes from the government.  It doesn’t. He believes that startups should be nurtured by the government.  They shouldn’t.  He believes that businesses need government subsidies. Rent-seeking doesn’t make successful companies. He believes that governments can do a good job of selecting which businesses should succeed. Sigh. Obama doesn’t know how jobs are created, but he sure knows how to destroy them.

High-Speed Pork? Thanks but No Thanks! by The Elephant's Child

Florida’s Governor Rick Scott has joined three other Republican Governors in rejecting Obama administration funds for building high-speed rail lines.  He said he informed U.S. Transportation Secretary Ray LaHood of his decision today.  The state had been awarded almost $2.4 billion in federal money for an 84 mile passenger line between Tampa and Orlando. This was the first new project in the $53 billion that President Obama included in his fiscal 2012 budget this week.

Florida already pays $34.6 million a year to subsidize the Tri-Rail commuter line that links West Palm Beach and Miami, because passenger revenue covers only $10.4 million of the $64 million annual operating cost.

Scott joins Governor John Kasich of Ohio and Governor Scott Walker of Wisconsin, and New Jersey’s Chris Christie who refused $3 billion for a commuter-rail tunnel under the Hudson River.  Typically,  the $3 billion saddled New Jersey with $5 billion in potential extra costs.

Secretary LaHood said that he was “extremely disappointed” and that there was “overwhelming demand for high-speed rail in other states that are enthusiastic to receive Florida’s funding.”

Robert Samuelson wrote in Real Clear Politics

Vice President Joe Biden, an avowed friend of good government, is giving it a bad name. With great fanfare, he went to Philadelphia the other day to announce that the Obama administration proposes spending $53 billion over six years to construct a “national high-speed rail system.” Translation: the administration would pay states $53 billion to build rail networks that would then lose money — not a little, but lots — and, thereby, aggravate the budget squeezes of the states or federal government, depending on which covered the deficits. …

Longtime critic Randal O’Toole of the Cato Institute recently planned a trip from Washington to New York.  Noting that fares on Amtrak’s high-speed Accela start at $139 one-way, he decided to take a private bus service.  The roundtrip fare: $21.50/  Nor does Amtrak do much to relieve congestion, cut ;oil use, reduce pollution or eliminate greenhouse gases.  Its traffic volumes are simply too small to matter.

Randal O’Toole, scholar of rail transportation, weighs in himself:

President Obama’s high-speed-rail proposal will, over the course of six years, pour $53 million of taxpayer money into a megaproject that produces little value for the vast majority of Americans. It uses the classic pork-barrel strategy of starting a program small and then expanding it after Congress, prodded by special-interest groups, is fully committed.

Former Congressman Ernest Istook chaired the Transportation Subcommittee of the Appropriations Committee:

President Obama’s proposed $53-billion more for “high-speed rail” (on top of a previous $10-billion) is a testimony to the power of adjectives.

If it were labeled “plain old rail travel” it would lack the pizazz but would be far more accurate.  Understating costs, overstating benefits, and lots of supersonic rhetoric are the selling points for high-speed rail.

The “high speed” adjective invokes thoughts of bullet trains speeding at 150 mph, 200 mph or more.  The reality of Obama’s plan is—at best—the 85 mph that is the average speed of America’s fastest train, the Amtrak-run Accela.

When Obama claims his trains would reach 100 mph and more, he’s talking about peak speed reached only for short stretches, not the average.

Always compliant media reports emphasized the disappointment of Transportation Secretary LaHood, and whatever negative comments they could find from those who mourned the lack of temporary jobs, which would not appear for several years.  Projects have to be designed, engineered, land must be acquired, environmental objections overcome — often in court, it could be years before a single tie is laid.

For me, this is sad.  I am a rail buff.  I grew up right beside the Union Pacific, and all kinds of rail traffic passed by our house each day. Everything from speeders to the B-Car to snowplows and the longest cattle train ever to travel by rail.  I’ve ridden in sleepers, dined in a white tablecloth dining car, ridden the steam train to Durango, and had a work train parked on our siding.  I have a model railroad.  I’ve been to model railroaders’ conventions. I love trains.  Our city is planning to tear up half the town to install light rail that nobody will ride. Trains go from fixed station to fixed station.  Cars go where you need to go.  You can’t go home again.

Playing Chess With the American Economy. by The Elephant's Child

As the budget battle begins, I suggested that President Obama is engaged in a deeply cynical game to trap Republicans into making deep cuts in the budget, which he will veto — after portraying Republicans as the mean, nasty people liberals have always known them to be.  Obama is betting that Republicans will cut things that can be portrayed as hurting people who are already struggling to make ends meet, As I said:

Obama is betting that Republican reforms will scare people.  He has often demonstrated his lack of respect for either the knowledge or education levels of the American people.  He is betting that people will be unable to follow the arguments in the budget battle, be  bewildered by the big numbers, and easy to influence with his speeches about how Republican reforms will harm them and damage the nation.  Swaying public opinion is right up his alley.

Is Obama right?  Are the American people too poorly informed to understand the dire situation of our national debt, the impending disaster of a government that cannot stop overspending? Obama has tried to show how serious he is about cutting back — he has cut back on home heating oil assistance to the poor, and community block grants. Chris Matthews was outraged, and Obama is supporting tax cuts for the rich. Criticism from the right and criticism from the left, see how centrist Obama is?

Obama held a press conference on Monday, a shockingly dishonest one.  Read it yourself with a sharp pencil to point out the complete nonsense.  Here’s how he started out:

Just like every family in America, the federal government has to do two things at once.  It has to live within its means while still investing in the future.  If you’re a family trying to cut back, you might skip going out to dinner, you might put off a vacation.  But you wouldn’t want to sacrifice saving for your kids’ college education or making key repairs in your house. So you cut back on what you can’t afford to focus on what you can’t do without.

A family struggling to get by is sacrificing a lot more than Obama suggests.  The savings are gone and the repairs will have to wait.  In a way, it was a deeply revealing statement. He simply does not grasp either the situation of real people or the reality of government spending. His budget adds $8.7 trillion in spending over the next decade. The hard-working deficit commission recommended reducing the deficit by $4 trillion. The president wasn’t interested.

Nothing has changed. It’s still all Bush’s fault.  That Obama managed to triple the debt in just 2 years has nothing to do with Obama. America is going to be transformed by Obama’s visionary green energy policy which will make us energy independent, offer millions of jobs working in the new green energy industries, and free us from the worry of global warming and the need to purchase foreign oil. Is he so sheltered that he does not know about the experience of other countries?  Does he simply dismiss the work of scientists and engineers who have proved that his policies won’t work?  Is he simply unaware of dissenting voices? Is he simply a man who knows that there is a herd of unicorns out there, and they’re probably just around the next hill?

Rasmussen today reports that “Most voters don’t think President Obama’s proposed $3.7 trillion federal budget includes enough spending cuts, and despite House Republican plans to cut substantially more, a plurality of voters don’t think the GOP goes far enough either.”  55% of likely voters say that the president’s budget proposal cuts too little.  26% say it is about right, and 10% think it cuts too much.  51% of Republicans say the changes proposed by GOP legislators cut too little, a view shared by 41% of voters not affiliated with either party.

Most voters continue to feel that cutting taxes and reducing government spending are best for the economy.  Only 60% of American recognize that 1954 was the last year that overall government spending declined from one year to the next.

I don’t know that ordinary people have a lot of understanding when you start dealing with billions and trillions.  Most of us don’t cope with that many zeroes in our checkbooks. We know what it means, but we just have trouble grasping a trillion.  Americans are blessed with a fair amount of common sense, and they learn a lot by dealing with their own family budgets.  They may make mistakes, but they are uncommonly sensible.

Republicans will come up with real budget cuts.  They have to— the situation is dire. Obama will veto, attempting to get the Republicans to shut the government down. Obama already signaled his plans in the press conference.  “It is important to make sure that we don’t try to make a series of symbolic cuts this year that could endanger the recovery.”  “If the steps we take…prompt thousands of layoffs in state or local government.” …”of being too loose in terms of talking about a government shutdown…People don’t get their Social Security checks.  They don’t get their veterans payments.”

As it appears so far, the public wants a more financially healthy country.  But when governors tell union members that they have to start paying a small percentage of the cost of their health insurance( far less than people pay in the private sector), you have a lot of angry union members.  Will Americans accept a little pain now or insist on waiting for catastrophe? And do they know that catastrophe awaits?

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