Martin Luther King, Jr. gave a great oration with his “I Have a Dream” speech that moved millions of Americans to action. Howard Dean gave a puzzling oration with his “I Have a Scream” speech that moved millions of Americans to laughter and derision. Tim Bishop flops at oration with an “I Have a Scheme” remarks that will leave hundreds (he’d be hard pressed to reach millions), scratching their heads.

“After losing a district won by John McCain in 2008 and Carl Paladino in 2010, some thought House Republicans would take a step back. But, like a bad riverboat gambler waiting for his luck to change, they have doubled-down,” Bishop wrote to his supporters.

What the hell does that mean? I know that riverboat gamblers are a questionable group, but where does that put Tim Bishop?

• Tim Bishop voted for the massive stimulus bill that left a steaming pile of $3 billion in debt on his constituents doorstep (based on what percentage his district pays of total income taxes x the total stimulus bill), and in return we got what? As of today 28 May 2011, his district received $693 million in stimulus funds which resulted in 428 jobs (Recovery.gov website). According to my calculator that works out to $1,627,113 per job. Who got the bulk of the funding? The school districts, to protect teachers’ union jobs so they can come out and thank Congressman Bishop by voting him back into office.
• Tim Bishop ran for reelection almost exclusively on tarring his opponent for being an entrepreneur who started a company with offices around the world that did back office work for U.S. businesses. Bishop said outsourcing was bad, very bad. Bishop then voted to bail out GM and Chrysler and then Chrysler takes our tax dollars and builds a $570 million engine factory in Mexico. Can you say hypocrite? Personally, I believe we live in a global economy and work should flow to where it can be done most efficiently. The Wall Street Journal reports on a study by Dartmouth that shows that for every one job outsourced overseas, two jobs are created here in the U.S. So not only is he a hypocrite for running for reelection on an anti-outsourcing platform and then uses taxpayer dollars to outsource high paying union manufucturing jobs, he is ignorant of economics to boot. Lose, lose, lose. So, who’s the riverboat gambler doubling down?

Mr. Bishop continues:

“The Republicans insist the problem with their budget isn’t the substance, it’s the messaging. And just today, they put forward a ‘jobs plan’ which is nothing more than a warmed-over massive tax cut for millionaires which will blow an enormous hole in the deficit that their economic policies created.”

Let’s see, Mr. Bishop has been in office since 2002. In 2006, Nancy Pelosi took the Speaker’s gavel and at that time our national debt was $8 trillion going all the way back to George Washington. By the time she turned the gavel over to Mr. Boehner, the national debt stood at $13 trillion. Can Mr. Bishop, who voted with Nancy Pelosi 97% of the time by the way, please explain how anything the Republicans could propose could “blow an enormous hole in the deficit that their economic policies created”? Where was Mr. Bishop when all this alleged chicanery was going on? Scrubbing down the paddle wheels?

Not leaving well enough alone he wraps up with:

He added: “I have no doubt that in 2012, my opponent will look to make the same tired arguments against me. With your help, I will continue to fight for policies that are going to create jobs and boost our economy.”

The same tired arguments? Create jobs? What jobs? Any idiot could create a job with $1.6 million. Boost our economy? It’s two years since the recession officially ended and still the economy is lousy. Bishop spends too much, the unemployment rate in his district remains at 8%; and he and his fellow Democrats have no plan. The Ryan plan was passed by the House but lost in the Senate 57-40. That vote was followed by one on the Obama Budget II with went down in flames 97-0. Not a single Democrat senator wanted to attach their name to the president’s budget. At the same time, the Senate democrats have not put forth a budget of their own with Harry Reid even saying:

“There’s no need to have a Democratic budget, in my opinion,” Reid told the Los Angeles Times last week. “It would be foolish for us to do a budget at this stage.”

Foolish? The country’s fiscal house is engulfed in flames and Harry says it would be foolish to look for a fire hose.

Tim Bishop’s scheme is to keep a low profile and hope nobody notices what an awful job he is doing, try to make colorful references to characters out of dime store novels, and call actually having a plan a tired argument. Mr. Bishop, I’ll tell you what we are tired of, and it is not about plans to get us out of this mess.

That’s my opinion; I’d like to know yours. Please comment below.

The New York Times had some, what was to me, shocking news today.  The article said that there was now consensus that the Obama stimulus plan was working.  Is this the same kind of consensus that man-made global warming was settled science, despite the glaring evidence that carbon dioxide emissions continue to grow while the globe stopped warming ten years ago?  This is also close on the heels of breaking stories of extraordinary misinformation if not outright deceit on how the $787 billion is being spent.

Smoke and Mirrors

Early on in the article we have this gem:

“The legislation, a variety of economists say, is helping an economy in free fall a year ago to grow again and shed fewer jobs than it otherwise would. Mr. Obama’s promise to “save or create” about 3.5 million jobs by the end of 2010 is roughly on track, though far more jobs are being saved than created, especially among states and cities using their money to avoid cutting teachers, police officers and other workers.”

There is no mechanism that exists to measure a job saved. None.  So how do they do it?  It goes something like this:

“Here, Mr. Stimulus Funds applicant, I have this check for you for $642,000.  No can you tell me, if I give this to you, how many jobs would you create or save?”

“Create? Er, none.”

“Hmmm,” the bureaucrat mutters, staring down at the check in his hand, “what about jobs you would save?  You know, if I don’t give you this nice, rather large check, how many of your people would you be forced to lay off?”

“Oh, I get it,” the potential recipient says with a wink and a smile, “probably all of them!”

The bureaucrat scribbles down a number, and hands over the check, walking away shaking his head.

That’s about how it’s done.  The government surveys the people getting the money and asks them what would have happened if they didn’t get the stimulus.  And what would you expect them to say?  Keep the check?

Revenue Starved States

What a concept, “Revenue Starved States.”  The article complains that not enough money was provided to “Revenue Starved States.” Does he mean states like California and New York?  I believe the correct term is states where spending is out of control.  It means states where taxes are so high that people are moving out in droves, and among them the “wealthy” people they love to tax to the eyeballs, meaning a dramatically shrinking revenue base.  After all, if one of the wealthiest people in the state, who is part of the group that pays 70% of the taxes, moves out of the state or (out of the country when it gets bad enough), that means a lot of people are going to see their taxes raised to make up for it.  So the statists seem to think a stimulus package that keeps these bloated bureaucracies fat, dumb and happy is the way to go, until when exactly?

The Multiplier Fallacy

The other great fraud being foisted on us is the multiplier effect, where for each dollar of stimulus money spent more than a dollar of economic activity results:

That sort of impact is what makes federal aid to state governments rank high in economists’ reckoning of the stimulus value of various proposals. Every dollar of additional infrastructure spending means $1.57 in economic activity, according to Moody’s, and general aid to states carries a $1.41 “bang” for each federal buck.

Even more effective are increases for food stamps ($1.74) and unemployment checks ($1.61), because recipients quickly spend their benefits on goods and services.

Okay, then how is this for a solution.  Let’s spend $10 trillion on infrastructure, food stamps and unemployment checks, since they will result in $15 trillion or so in economic activity, because of the multiplier, right?  For that matter, let’s have the government spend $100 trillion and we’ll really be rocking.

Where’s the So Called Consensus

From what I read in the article, there was only one economist that could be called a conservative, Martin Feldstein, that they were willing or able to quote, and this was his take on the stimulus.

While some conservatives remain as skeptical as ever that big increases in government spending give the economy a jolt that is worth the cost, Martin Feldstein, a conservative Harvard economist who served in the Reagan administration, said the problem with the package was that some of its tax cuts and spending programs were of a variety that did little to spur the economy.

“There should have been more direct federal spending that would have added to aggregate demand,” he said. “Temporary tax cuts and one-time transfers to seniors were largely saved and didn’t stimulate spending.”

That’s it?  That’s the consensus?  It seems to me that he is pointing out what was wrong with the package rather than what was right.  He was in the Reagan administration and he knows what works: permanent cuts in marginal tax rates. Those dreaded tax cuts for the “rich.”  The thing is that when the people above the subsistence level get to keep more of what they earn, yes it does belong to them and not to the government, they tend to invest it, which means the provide capital to businesses that grow and create jobs.  Yes, capitalism.  What the stimulus does is take money away from these people, or borrows it and steals it from future generations, and gives that money, as in the example above, to highway projects, food stamps and unemployment checks.  The first of these may create jobs until the road project is completed, but the latter two only increase the dependency of those recipients on the government.  So how exactly does the stimulus plan that puts money into a highway project and unemployment benefits, help a banker who got laid off?  How does it help the unemployed executive from United Technologies?  It doesn’t.  It’s like a drug fix.  You may feel good for a while, but then it wears off and you need another fix.

The Genius of Government

You would think that with all the examples of government planning lying on the waste heap of history, the statists will finally catch on that they can’t successfully pick the winners and losers in an economy.  Government has to get out of the way and let the market work.

Government must be drastically cut down to size.  Think of the popular TV show “The Biggest Loser.” Picture the governments of the United States, California, New York, New Jersey, Rhode Island, Michigan, Nevada, for starters, as contestants.  Let’s see who can lose the most weight.  Ready? Go.

The Trick

You may have heard the Obama Administration touting the number of jobs they have saved or created through the stimulus and other economic policies.  I am reminded of the old comedy routine:

Comic: (Stands alone on the stage snapping his fingers, then whistling while he clasps his hands and wiggles his fingers)

Straight man: (Walks on stage as if to pass the comic, sees him and stops) “What are you doing?”

Comic: “Keeping away the elephants.”

Straight man: “There isn’t an elephant within miles of here.”

Comic: “See, it’s working.”

There isn’t an economist around who knows how to count a job saved.  There appears to be an informal survey among those who receive stimulus money to report how many jobs were saved by them receiving the funds.  Do you think they may be encouraged to tell the government what it wants to hear?  Here is my take on Obama’s performance.

Obama:  “If we don’t approve this stimulus package immediatelywe’ll be in deep tapioca.”

Citizen: “What are you doing?”

Obama: “Saving jobs.”

Citizen: “It’s impossible to measure a job saved.”

Obama: “See, it’s working.”

The Treat(?)

Third quarter economic growth came in at 3.5%.  That’s the good news and Obama is quick to credit the stimulus package that has hardly been spent.  But if you look more closely at the numbers a large portion of the growth comes from:

• A sharp slowdown in inventory reduction.  In other words, businesses don’t have much inventory left.
• “Cash for Clunkers” program which is over and whose stimulative effect will not continue
• The crushing effect of the debt that Obama is blissfully piling on has not been felt yet

Is it a real treat to a double dip to come?

BOO!!!

Stock Market Leads the Way

As I write this the stock market is up nearly 200 points, and it has risen in each of the last three months.  Commodity prices are rising based on encouraging manufacturing data from abroad.  Personal incomes rose 0.5% in April.  Chrysler could exit bankruptcy as soon as Monday.  Citigroup and GM are removed from the Dow Jones Industrial Average, replaced by powerhouse Cisco and Travelers.  Ford motor’s shares rose 4.9% on news that it plans to expand production in the third quarter to try to gain market share from its rivals, and without government money.

The Stimulus Flop

Less than 10% of the $780 billion stimulus package has been spent.  President Obama told us we desperately needed or we may be mired in this recession/depression for years .  The free marketers said that this economy is strong enough to recover on its own, which the statists sneered at.  Government created this mess by their meddling in the housing market and how they mishandled interest rates and the money supply but we were told that “only government” can get us out of it.  More recently President Obama, who has been trying to spend every dime Congress will let him get his hands on has said we are out of money. Here’s a thought:  repeal the rest of the stimulus and get out of the way of the strongest economy on earth.

Things to Ponder

• Obama opposed bankruptcy for GM and Chrysler.  Free marketers said it should be allowed to happen.  That’s how the free market works.  After pouring billions of taxpayer dollars into these two, where are we?  Both are in bankruptcy.
• Bankruptcy for GM and Chrysler would be an extraordinarily long and drawn out process costing millions of jobs and killing the auto industry in the U.S.  Where are we?  Chrysler may emerge from bankruptcy as early as Monday, Ford is ramping up for the third quarter.
• Without the stimulus package, we were told the unemployment rate could hit 9% by 2Q2010, whereas with the stimulus it will peak at 8% at the 3Q2009.  Where are we?  It is now at 8.6% and we are in 2Q2009.  The stimulus passed, little has been spent and the administration has been wrong again.  The free marketers say that unemployment will likely rise quickly and if left alone, the recovery will happen more quickly.  If the government meddles and tinkers, we will likely see what happened in the 1930s where this drags on for years.
• President Obama says we’re out of money.  So stop spending.  Repeal the stimulus that is accomplishing nothing because the bulk of the spending isn’t due to happen for another year or more.
• Watching the Information Technology job boards, I see a big rise in the job postings for sales people.  When companies are confident that the economy is turning, they step on the gas for sales to beat the competition.  The operational folks will soon follow.

If the Obama administration is not careful and doesn’t reverse course before he bankrupts us, we may be faced with accelerating inflation and sky high interest rates.  Shall we get nostalgic for the days of Jimmy Carter?