American Elephants

Bernie Marcus is a Worried Man. by The Elephant's Child

Bernie Marcus is the founder of Home Depot. Ours is just a few blocks away, and we spend a lot of time there. Mr. Marcus speaks as a businessman who did build a huge chain, and as a man with a family, and a country he cares about. He’s worried about the current direction of the country, and wants to tell you about his ideas.

Yoo Hoo, Mr.Obama! Government Spending Doesn’t Create Jobs! by The Elephant's Child

Here’s Economist Dan Mitchell to explain why government spending doesn’t create jobs. Mr. Mitchell is a good explainer.  Do you suppose we cold get President Obama to listen?  Nah.  Didn’t think so. But you can be well informed.

“Green?” I Say It’s Spinach, and I Say the Hell With It! * by The Elephant's Child

James Hansen appeared before a U.S. Senate committee in June of 1988 to tell the collected senators that the sky was falling that the earth was warming (It was a hot day in Washington D.C.) and it was probably due to all the carbon dioxide arising from our profligate use of foreign oil, or driving cars, or something like that.

His star rose, and he became a climate adviser to the U.S. President, Al Gore and Lehman Brothers. The UN founded the IPCC, Al Gore wrote a book and did a slide show, and the world got over-excited about the natural exhalations of the human race — carbon dioxide — one of the basic building blocks of all life.

Chapter 5 of IPCC AR4 (Humans Responsible for Climate Change) in the fine print, noted that it was based on the opinions of 5 independent scientists and their computer models. Governments got over-excited and decided that the problem of the earth overheating meant that they had to do something, so they appropriated all sorts of taxpayer money to give to anyone who wrote a good grant proposal to study the situation and tell the bewildered politicians what to do about this catastrophe.

Suddenly scientists in all sorts of different disciplines discovered a passionate interest in the science of global warming.  It paid well, advanced careers and increased the prestige of the universities where they were employed.  Some scientists got over-excited with all the prestige and attention, and skipped a few important steps here and there.  The planet started cooling a little, which upset several plans.  Politicians, however, remained committed to environmental caring.

Plentiful government money has been flowing to anything labeled “green”, like “green” houses, “green” appliances, “green” wind farms, “green” lightbulbs, “green” solar arrays, “green” fuels and “green”cars.  That all this greenness didn’t seem to work, was beside the point. The planet was being saved, and politicians couldn’t be blamed for not trying.

Then you had ClimateGate, and GlacierGate, AmazonGate, the Arctic wasn’t melting, the polar bears were just fine.  They even found some extinct species that turned out to be not extinct after all.  Scientists were discredited, IPCC reports were discredited, and temperature records were discredited, and the earth continued to cool.

The people got a little fed up with all the hype, and lost interest.  Governments, however, do not make mistakes.  Therefore if all these green things don’t work (which they don’t) what they need is the investment of lots more money.

So we arrive at current government efforts to change American driving habits by bribing people to buy an electric lemon of a car ($41,000 + tax, license and registration) that will go for 40 miles (maybe) on a charge, take 7 hours to recharge, when for the same money you could get a small Mercedes.  Not much of a bargain.

So the Feds have added a $7,500 bribe — of your money — and Left Coast states like California, Hawaii, Oregon and Washington have tacked on another $5,000.  Now Tennessee — red state — has tacked on a $2,500 tax rebate to buyers of the first 1,000 electric vehicles sold.  (This seems to be a nod to their auto company, Nissan — which received $1.4 billion of your money from a Department of Energy loan program —to retool a factory to build its new Nissan Leaf as an all-electric competitor to the Volt).

This is a dramatically shortened, somewhat snarky but not entirely inaccurate, account of how we got here.  It really makes you understand public anger over public spending.  They have spent us into the poorhouse, and it was all wasted. Squandered on projects unsupported by evidence.  The public should be very, very angry.

*Caption from a long-ago, but famous New Yorker cartoon.

The White House Understands Your Anxiety! They Will Cut The Budget By an Infintesimal Amount, to Make Obama Look Good. by The Elephant's Child

Public anxiety about government spending is becoming noticeable. Or at least, the White House  has finally noticed.  They are directing governmental agencies to develop plans for trimming a whole 5 percent from their budgets by identifying programs which “do not advance their missions or President Obama’s agenda.”

Peter Orzag and Rahm Emanuel are sending a memo to federal agencies, asking them to find spending cuts.  The memo says, gracefully, according to the Washington Post:

“The American people deserve a government that spends every taxpayer dollar with as much care as taxpayers spend their own dollars — where money is spent not out of inertia, but only when it contributes to achieving a clear national priority,” Emanuel and Orszag write in the memo, according to an early draft.

Oh my. Read that one again.  This is the government that spent $862 billion in a stimulus bill that did not stimulate, on Keynesian multipliers that didn’t multiply, on shovel-ready projects that weren’t shovel ready, and on projects that resulted in new jobs only by the mysteries of double and triple counting of imaginary people.  “Spends taxpayer dollars with as much care,” oh my.

To encourage cooperation, Obama also will ask Congress for new authority to let agencies keep half the savings they identify, administration officials said. The agencies could then put the cash toward higher priorities rather than surrendering it all for deficit reduction, as is typical.

Economist Veronique de Rugy puts it in terms that we can all understand:

Basically, it’s as if I tell my bank “I am massively in the red, I know, and from now on I will be reasonable. See, my plan is to cut $5.00 out of the $100 I spend per week. $2.50 will go to reducing my $300,000 deficit and $2.50 I will spend on more stuff. I need a little incentive after all my efforts.”

This is absurd, a joke.  Congress is attempting to pass a “jobs bill” or stimulus 3.0.  It won’t create any jobs either.  Then they want to ram through a cap-and-trade bill, and just before the election they want to send out another check for the seniors who always vote, and seem to be well represented at the Tea Party rallies — at least if the grey hair in the crowds is accurate.  Of course you can never tell with those violent tea-party activists. “Clear national priority indeed!”

This is a feel-good pretend effort to sway the masses, whom they think are too dumb to grasp the complicated details of budget trimming. The very painful exercise that millions of families are having to go through at the kitchen table as a result of President Obama’s agenda.

Tell Your Congressman: Government Spending Does Not Create Jobs! by The Elephant's Child
June 7, 2010, 10:39 pm
Filed under: Capitalism, Economy, Energy, Statism | Tags: , ,

The June Bureau of Labor Statistics employment report announced that net employment increased by 431,000 in May reducing the unemployment rate from 9.9 percent to 9.7 percent.  But not so fast.  411,000 of those new jobs are temporary government jobs associated with hiring for the census.  The private sector jobs only totaled 41,000.

These temporary jobs offset job losses in state governments (-15,000) and local governments (-7,000).  Educational hiring has not been affected.

But: Government spending does not create jobs or prosperity. Every time the government “creates” a job — the salary, the benefits, the office space, the parking spot, and the sign on the door — are funds that come right out of your pocket.  Democrats in Congress cannot seem to get this simple fact through their heads.  The increased government spending that many in Congress propose, will not reduce unemployment because it will do nothing to encourage businesses to invest or hire.

Layoffs have increased during this recession, but that is not the cause of the nearly 10 percent unemployment rate.  The main factor that has driven unemployment so high has been the sharp drop in creation of new jobs.

The biggest drag on the economy is sheer uncertainty.  Employers are unsure of how ObamaCare will affect them, how much it will cost, what steps they have to take.  The taxes and fees from ObamaCare take place immediately, but the benefits don’t occur until much later.  New and increased taxes are coming; how bad it will be is up in the air.  Energy costs will increase.  And regulations!  Congress is making up new regulations as are all the bureaus and departments of government, many of them buried in 2,000 page bills.  Unpleasant surprises waiting to hit the unwary.  This is not a situation that makes a  potential employer rush out to hire new people.

The BP Deepwater Horizon oil rig disaster is creating a nightmare in the Gulf states, and warnings in the press suggest that it could spread up the Atlantic coast.  As the oil reaches the beaches, jobs in shrimping, fishing, tourism, restaurants and all the industries that support those jobs are at risk.  President Obama ordered the rest of the rigs in the gulf shut down — unnecessarily, we are told — which may cost up to 10,000 jobs.

The Democrats latest $143 billion “jobs” bill (Stimulus 3.0) will add at least $84 billion to the deficit.  An extension of jobless benefits, bailout funds for state governments and their unions, lots of earmarks, and $43 billion of tax increases.  The spending is partially funded through an increase in the “Oil Spill Liability Trust Fund” tax.  There are provisions in the bill that will drive jobs and corporate headquarters overseas.  And no real analysis of the economic impact of the bill.

There is almost no one in the administration that has any experience in the private sector.  I don’t know what private-sector experience members of Congress have had, but I do know of a lot whose resumes consist almost entirely of “public service.”

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