Labor economics

Congressman Tim Bishop, the Stimulus, and Job Creation

by Bill O'Connell on October 4, 2010

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httpvh://www.youtube.com/watch?v=ekUOENBQJ7U&hd=1

With unemployment stubbornly high, Congressman TIm Bishop is running for reelection solely on the issue of  his opponent RandyAltschuler having created jobs overseas.  We explore the stimulus that Congressman Bishop voted for, how it is working, and how effective it is in creating jobs.

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Desperate Times, Desperate Measures

by Bill O'Connell on July 5, 2010

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The clock is running out on the Democrats.  This week’s dismal jobs report, hailed by this Pollyanna administration as more good news because somebody somewhere hired someone, means the number of job reports before Election Day to is down to three.  So the Democrats are calling for the Hail Mary pass.  Propose extending unemployment benefits and when the Republicans balk unleash a fusillade of class warfare:  cruel, heartless, racist, homophobic, sexist… did I leave anything out?

To extend jobless benefits requires government money.  The government is out of money and is borrowing like mad.  But extending jobless benefits only makes the slightest bit of sense if there are prospects for jobs in the immediate future.  But this government’s policies, despite their delusional happy talk, is the reason we are stuck in a jobless recovery.  This government is intent on adding program after program that someone will have to pay for.  Until the smoke clears and small businesses can tally up the cost, they are not going to hire anyone unless they absolutely have to hire to fulfill whatever book of business they currently have.  But even Democrats who have a prayer of staying in office do not want to spend more money lest that turn into the tipping point to send them packing.

So look for the shrill pitches by Nancy “Unemployment Checks are the Fastest Way to Create Jobs” Pelosi to try to tar fiscally responsible Republicans as heartless.  The way to solve the problem is by allowing the economy to grow and by growing create jobs.  Otherwise we are just kicking the can down the road.  Extend unemployment benefits today while continuing job killing policies, will only mean the same scenario repeating a few months down the road.  People are tired of drawing unemployment checks, they want to draw a salary and that means jobs.  Let’s hope the next three months will be swift and the government house cleaning equally so.  They don’t get it and there is little hope,  given Nancy Pelosi’s bizarre understanding of economics, that they will.  Throw the bums out and let’s get back on the road to recovery.

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Obama Calls His Economic Team Incompetent

by Bill O'Connell on July 1, 2010

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Well the cat’s finally out of the bag and it’s been loosed by none other than President Obama himself.  Once again out on the stump where he is most comfortable and away from the Oval Office where decision making is required, the president is now taking a new tack, or it is an old one?  He is now saying how much worse things could have been if not for his stimulus program.  This is the standard progressive/statist line that we didn’t do enough… if only we spent more money our program would have worked.

But here’s the problem.  To get the $787 billion stimulus package passed the president said that if we did nothing, unemployment would rise to 9%, but if we passed his stimulus package it would go no higher than 8%.  Where is the unemployment rate?  It is at 9.7%.  So if things could have been worse if they did nothing, his economic team is totally clueless because they were the ones who put forth the 8% vs. 9% argument.  Now Obama is trying to tell us that if we did nothing, the unemployment rate could have been in the double digits.  Who says so?  Is this his own projection or is his economic team back at the Ouija board?  Is anyone from the economic team being fired?

Here is an alternate theory.  If the stimulus plan was not implemented and the president cut taxes by $787 billion instead and promised not to introduce any new government programs for two years, that the unemployment rate would be much lower.  How can I make such an outrageous claim?  Let’s look to history.  In 1920-1921 there was a steep recession where the unemployment rate hit 11.7%.  Back then, government didn’t saddle businesses with regulations and businesses were free to cut wages and make other adjustments without government meddling.  Within one year the unemployment rate fell to 6.7% and the following year it was down to 2.4%  Contrast that to the Great Depression where we had massive government intervention and massive government spending and the unemployment rate never fell below 14.7%.

Bringing Jobs Back to America

Another brilliant example of your government killing the economy comes from the company Bucyrus Erie.  They were bidding on a job in India to provide heavy equipment to help them mine coal for a power plant the Indians were building.  Bucyrus Erie went to the Export/Import bank, a government agency, to try to get a loan guarantee to finance the deal.  Because a coal plant would increase the carbon footprint of India, the Ex/Im bank turned down the request.  This didn’t stop the plant being built, it just meant that the heavy equipment was going to be provided by China or Russia instead of the USA.  There would be no effect on the carbon footprint, a big effect on jobs in the US.  At the same time, President Obama is on the stump talking about how hard he is working to bring jobs back to the US.  Really?  They must have read his speech over at the Ex/Im bank, because they are reconsidering Bucyrus Erie’s request.

More government is killing our economy.  Our economy is very tough and it is extremely hard to bring down, but the current administration is trying its best to do so.

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Economic Malpractice

by Bill O'Connell on December 5, 2009

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Let’s say you were having a problem with your knee.  So you go to the doctor and tell him your problem. The doctor examines you and says he has to act quickly.  He says you need an operation and if you have it, you will experience some mild pain for a brief time, but if you don’t  the pain will get worse.  How bad you ask?  On the pain scale, designed by Andrea Mankoski, you are currently at a 6, described as, “Can’t be ignored for any length of time, but you can still go to work and participate in social activities.”  He says without the operation you will probably reach a 9, “Unable to speak.  Crying out or moaning uncontrollably — near delirium.”  With the operation you will probably peak at 8, “Physical activity severely limited; you can read and converse with effort; nausea and dizziness set in as factors of pain,” but then things will progressively improve.  The pressure he is putting on you to decide is intense, so you give him the go ahead.

The good doctor performs the operation and as he predicted the pain does get worse, but it doesn’t stop.  You are beyond delirium, you are reaching level 10, “Unconscious.  Pain makes you pass out.”  Your medical proxy, demands the doctor tell her what went wrong.  The doctor shrugs and says it was worse than anybody thought, but then says the surgery is working better than expected. ”What the hell did you do in that surgery, you screw-up?” your proxy demands.   The doctor, just smiles, and turns on his heel ands walks away, leaving your proxy standing there sputtering, desperately trying to find the words to express her disbelief and outrage.  When she finally regains her composure, standing there all alone, she reaches for her cell phone to call a malpractice attorney.

Economic Stimulus Surgery

Dr. Obama told us, upon taking office, that we desperately needed a stimulus package or the unemployment rate would continue to rise.  He said without a stimulus package, the unemployment rate would rise to 9%, if we did NOTHING!  His able assistants, Harry “the Healer” Reid, and “Nurse” Nancy Pelosi, slammed through the $787 billion package.  We were saved!  Unemployment would not rise above 8% before starting to fall.  But there isn’t a happy ending to this fairy tale.  The unemployment rate rose past 8%; it rose past 9%; it rose past 10%.  So when Dr. Biden steps to the microphone and says the stimulus is working better than expected, why isn’t someone putting a straight-jacket on him and carting him off?  Why isn’t someone pointing out that the stimulus may have actually made the problem worse?  Team Obama said themselves that it would have been better to do nothing. The unemployment rate would have peaked at 9%.  Why are they getting  pass?

Non-stimulating Stimulus

Look more closely at the stimulus, which we now have had time to do.  Extending unemployment benefits does not create jobs.  Giving teachers a raise, does not create jobs.  Spending 80% of the stimulus funds so far in the Department of Labor, the Department of Health and Human Services, and the Department of Education doesn’t speak to job creation.  It speaks to a sop to their union backers and the creation of their impossible to measure metric “jobs saved.”  Only $4 billion so far has gone to the Department of Transportation and their “shovel ready” projects.  Even these, while a help to construction workers, doesn’t do a thing for laid off bank tellers, software engineers, or FedEx employees.

The Obama administration is spending us into oblivion,  while pouring gasoline on to the unemployment fire with their ill conceived and basically botched stimulus plans.  What is needed are tax cuts that will allow the market to direct the resources where they will do the most good and get the economy moving again.  Instead Obama is taxing and spending our way to economic disaster. What we need is a sharp curtailment in government spending and to shrink the size of the federal beast. Is there a good economic malpractice trial lawyer out there?

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