Jobs Wars - Part III: Revenge of the StimulusFollow

Back in January 2009, the overwhelmingly popular President-elect was starting to peddle what ultimately ended up as an $800+ billion fiscal stimulus package, without which, in the words of the President-elect's own economic team, "the economy would lose another 3 million to 4 million jobs and unemployment would hit 8.8 percent." Shortly after being sworn-in as President, the bill passed.

Since then, unemployment has increased as high as 10%, is currently hovering right around 9%, and Obama has candidly admitted that all of those "shovel ready" projects that were supposed to save the economy weren't as "shovel ready" as the White House had hoped.

Now, the President is planning to propose another fiscal stimulus package at the jobs speech on Thursday, except that he'll be careful not to call it a "stimulus" plan lest people associate this new proposal with the old one:


And yet, based on recent polling, that likely won't even be an issue:


How is it possible for anybody to look at the previous stimulus package passed under Obama (or the one passed under Dubya, for that matter), and come to the conclusion that yet another one would be a swell idea?

Well, at least you're still repeating the same rhetoric!



Wait! So when people call for ending the "Bush tax cuts", they really mean that we should eliminate the stimulus checks handed out back in 2001 and 2003? One of these things is not like the other, so how about you stop pretending they're the same just because you've erroneously labeled them both "tax cuts"?



That's still not a ringing endorsement.



Dunno. Has there? I'd think that would be the responsibility of the folks who are trying to convince the public to give them more money for this stuff.




Funny how the second use of the phrase "candidly admitted" looks an awful lot like "made up an excuse".



Yeah. Are these the same economists who got it so horribly wrong in the first place? Doesn't this leave us with just two possibilities for that group:

1. The economy wouldn't have been worse, but they advised the wrong course of action and made it worse.

2. The economy would have been worse anyway, and they completely missed just how bad things were.

Either way, I see a whole lot of incompetence going on with that group of economists. On the flip side you have that alleged minority of economists who believe that we did accurately understand the scope of the problem and who were also correct that spending too much stimulus money would have a negative effect.

Who to believe? One group was either 100% correct or 100% incorrect. Or the other group was just 100% incorrect. Maybe we should go with the guys who might just have been right all along? Just a thought!

Forgive me if I'm skeptical of giving another try to the economists who badly misjudged the scope of the economic recession and designed a stimulus plan that was ineffective (for whatever reasons) to combat it as promised. One could say that at least they now have the benefit of hindsight, but that doesn't appear to have changed the proposed solution. If your only tool is a hammer, every problem looks like a nail.

Also, "it could have been worse!!" is a close logical cousin to "it's obvious!!"

Edited, Sep 6th 2011 4:18pm by Demea

Be as skeptical as you'd like. I was just pointing out the admission of fault since you pointed out the other one. I'm not looking to convince you of anything since I haven't been following Obama's upcoming plan aside from a vauge understanding that it's based around infrastructure spending and middle-class tax cuts.


*Shrug* 36 to 6, economists feel "it's obvious", I guess. Given that no one here is about to start publishing economic studies on the effects of the stimulus, I can accept the opinion of economists the WSJ thought worthy to survey or the opinions of random schlubs on a gaming website. Both are "just" opinions, but for lack of a better option I know which ones I'll weigh heavier.

I'm no Liberal, but the ace up his sleeve is that our infrastructure really is f'ucked. This isn't debatable as a scare tactic or green job rhetoric or "based upon flawed economic theories". Our infrastructure IS collapsing.

Sooner or later, someone is going to have to do something ( expensive) about it. I'm all about "burn me once..", but then again, just because your mechanic failed to fix your leaky sink doesn't mean you should deny him the chance to fix your car.

Fake personalities don't "know" people, much less specific types.

Apparently, there was a survey of 36 economists, which appears to not include a single person involved in any actual decision making regarding the passage of the Recovery act, but now they are the sole 36 economists responsible for determining whether said Recovery Act saved us from a worse fate.

It's Joph desperately moving the goal posts around.

Ten out of nine times when I make a decision, I decide it was a good decision. You can poll me on that.

Ok. But that doesn't tell us if it was worth the cost. Just eyeballing the company I work for (and making some very very broad estimates and averages), revenues are around 12B/year, with net income around 3.5B/year. So if we were to pay to operate the company, with no accounting for profits, but just looking at operating expenses, we'd be looking at about 8.5B/year to operate. There are about 16,000 employees, so that works out to about $530,000 per year per employee. Which works out to about $45k/month per employee.

Remember, this is a company filled with highly skilled (and relatively highly paid) people. I imagine that a company like McDonald's probably hires many times more people for the same operating costs, for example. I suspect that most private employers would beat out the cost per employee of the government infrastructure method.


So, if your objective is to hire more people (ie: create jobs), it's better to leave that money in the hands of private business and encourage them to hire people (or at least not discourage them from doing so like the current administration is doing). I guess my point is the same point I have with all government spending and employment. It's worth doing *if* the thing we're spending money on serves some necessary function which justifies the cost. But we should not make the mistake of spending money on those things with the goal of creating jobs. The argument for infrastructure spending should be based on the relative need of that infrastructure, just as the argument for food stamp spending should be based on the need for people to eat. We should *never* try to make economic arguments in favor of them. They are a cost for those services, and we should never lose sight of that fact.

Edited, Sep 6th 2011 5:19pm by gbaji

That's not it at all. You're treating the respondents to that survey as though they are representative of all economists when considering whether the recession would have been worse if we hadn't passed the Recovery Act, but then not treating them as representative of all economists when accepting the assumption that "economists" misjudged the severity of the problem when estimating the resulting effects of that Recovery Act.



From where I sit, it seems far more likely that economists misjudged the effect of the Recovery Act than that they misjudged the severity of the economic crisis. Doesn't it occur to you that it's terrifically convenient that pretty much zero economists (I'm not aware of any) predicted these "much worse" economic results until after the Recovery Act was passed and it didn't produce the results that were promised? That sounds a hell of a lot like an excuse for failure to me.


Which is more likely? That the economy really was so much worse than we expected and every single economist missed it? Or that the Recovery Act made things worse (which was predicted by "some" economists), and those who supported and/or agreed with it had to invent a reason why things got worse after it was passed?

I'm in this camp. Our infrastructure really is in a sorry state and we really do need to do something about it. And I'm more than willing to pick up a shovel myself and go do the work (especially since my current contract runs out at the end of the year).

Sure. The jobs argument comes from that these are projects we would need anyway, and having them done now, when private industry doesn't need the labor, such that it would not need to be done later, when private industry is hungry for labor to create infrastructure. This would smooth out the demand curve making it cheaper for business later with little cost to them now, baring interest on the public works project funding.

Although, there is some problem with these jobs tending not to really be "shovel ready" but that is another problem.

A lot of you seem to have shifted the conversation to public spending in general. Yes, we need to build roads and repave highways.

That still doesn't begin to explain how anybody could consider fiscal stimulus spending as a viable solution to rampant national unemployment, which was the question posed.