What do you think is wrong with this political strategy? [See Details].

Many parts of the Stimulus bill were for job creation. The Conservatives didn’t like it, because it cost a lot of money. They would bash a new jobs bill for the same reason.

I think it’s a great idea, but . . . They would have to prove it would actually create jobs. The highest level of unemployment is for men between 18–54 who do not have high schools educations. They would not be able to create a smart grid.

Absolutely nothing wrong with that strategy. And great analysis on the importance of having advance solutions concerning the threat of EMP. Add to the number of jobs that solution will create are the jobs that will be generated if more railroads are built throughout the country, to make more fuel efficient long distance travel. Vaguely, I know Obama proposed something on this and there was even a big railroad construction plan in this certain state that was blocked by you know who, its Republican governor. In politics, its never about what’s right or wrong, it’s about what would keep you in power. Great common sense and politics do not mix well in this country.

Your strategy has merit. I only have two concerns:

1. That any new job would be mandated to a family man or woman. The reasons are obvious.

2. Mandate the jobs to legal Americans, not people living in America, illegaly.

Before I say anything inflammatory, Let me make sure I understand the proposal correctly. What your proposing to to take the plan that FDR initiated in the thirties and do it again. The infrastructure build. The plan that Obama did his first year in office. The infrastructure build. And since neither one of those worked at all, what we should do is try it again. Is that really the plan you have in mind?

So let’s forget about history and look at what I think you want. We already tried a $trillion stimulus and it didn’t work so I’m assuming you want it much larger, say $2 trillion (correct me if I’m low balling your number). We already have a $1.7 trillion deficit so that jacks it up to $3.7 trillion. Standard and Poors has already told us they will downgrade our credit rating if we don’t do something about the debt. So currently we pay almost half a trillion on just the interest on the debt we already have So with the added debt and a credit downgrade, we would likely double that. So $3.7 becomes $4.2 trillion. and we’re only talking about the deficit. Money we have to borrow. and only the first years worth. China already doesn’t want any more of our debt, nor does anyone else.

Debt is already at 100% of GDP and this plan would double that within a couple of years. It does absolutely nothing to reduce the cost of energy nor does it do anything to create long term jobs (ie once completed the people have to find another job).

So basically we taking a program that has never worked historically, compounding debt we already can’t afford to create some small number of jobs that are very transient in nature. Hair-brained comes to mind.

@Jaxk I think @ETpro said it’s public/private effort utilizing businesses who may have cash to do it.

@mazingerz88

Contracting private enterprise with public funding is how all infrastructure projects work. It doesn’t change my point at all.

@ETpro – The way one Republican pointed it out to me, is that the Republican jobs strategy that they rode into office on, was “get government out of the way so that the private sector can create all the jobs it wants.” That hasn’t worked very well either, imho, because to make jobs, you need demand.

@john65pennington – Hiring legal citizens already is mandated: hiring illegals to work for you is illegal. Or did you mean to make hiring them “even more illegal?” Either way, it’s not another mandate that’s needed – it’s enforcement of the existing mandate.

@laureth

I’m a little confused. The democrats took control of both houses of congress in 2006. When the economy deteriorated in 2007 it was the republicans fault because Bush was in office. Then the democrats took the whitehouse in 2008 as well as complete unrestricted control of both houses (filibuster proof) and the economy continued to decline. Still it was the republicans fault because they didn’t agree with the democrats (as if it mattered). in 2010, the republicans took control of one house of congress and the democrats retained control of the senate and the white house and the economy continues to decline. Now we seem to be saying the republicans are the fault because they took control. OF WHAT? They still can’t get anything past the senate nor the whitehouse. They are completely impotent to pass anything. Is there any point where democrats will actually take at least some of the blame for the deteriorating economy? If complete control of congress and the Whitehouse won’t do it, what exactly do you all need? The republicans have not had the ability to pass anything since 2006. How can you say thier strategy hasn’t worked when it hasn’t been tried?

@Jaxk The democrats took control of congress in 2008 only in name. They have blue dog democrats which are not exactly as “progressive” as others. I always say those blue dogs should turn Republican to avoid confusion. But people should understand the democratic party is not as purely forged as the republican party, only to keep in mind why having “unrestricted control of both houses and the executive” is not always as simply saying this party or that had total or majority control.

Plus is there really utterly “complete unrestricted control” of anything in Capitol Hill even if it’s filibuster proof? Again, more so in mere perception. Both parties still weigh consequences of wielding such power hence they make sure they get some votes from the other party. They do “hedge their bets”. In 2008–2010 the economy continued to decline but was halted by Bush’s initial stimulus as continued by Obama. They both deserve credit in my view.

As for what’s next, the strategy of the Republicans have never been viewed as something that even deserves a chance, even when they are in the driver’s seat or not, simply because at least half of the country believes they do not have a good driving record when it comes to the economy and that half will give democrats the control…until they themselves end up imitating republicans’ shortcomings and misgivings, aka “failure to fix the problem”.

@Jaxk Regarding @ETpro public/private efforts. I think it’s not merely public funding contracting private companies but private companies using its own cash to invest in business addressing smart grid issues.

@mazingerz88

I don’t see anything there that would show how you would accomplish such a feat. How would you get private enterprise to invest in this. Let’s take a quick look at essential pieces.

Everything Obama has said and done since he first started his campaign indicates raising the price of energy. Whether it be through Cap N Trade, or a carbon tax, or what ever, the price of energy (in his own words) would necessarily double. Also all of his policies are designed to reduce energy consumption. That may be something you want or even everybody wants but actual result of lowering consumption plays a part in the business plan.

So if anyone is going to invest money they need a way to get it back. If you invest a million bucks, you would hope that investment would bring back a least as much as the investment Hopefully a little more. Generally this is done by increasing volume or lowering costs. An increase in volume allows you to sell a bit more and put that extra back towards repayment of the investment. If the costs are lower, you take the added margin and put it back to repay your investment. In this scenario both are moving the opposite direction, lower volume and higher costs.

The end result is you are asking private enterprise to invest money to so that can lose money faster. I just can’t see a way to get them to do that. It certainly wouldn’t get any of my money.

@mazingerz88

I should also not that both Democrats and Republicans have thier problems with unity. The democrats have thier Blue Dogs while the Republicans have their Rinos. If you look at the major issues, both parties voted in lock step. A few bills the Democrats were able to pull away a few rino and/or lost a few Blue Dogs but generally it was both parties in lock step. The difference between them was more media hype than reality.

As for Democrats ending up not fixing the problem, it would appear we’re already there. With Obama barely eeking out 50% on overall approval but losing 60% on the economy . It’s pretty clear the “failure to fix the problem” has already been recognised.

@Jaxk – Think of it this way. The Republicans were driving the car at high speed toward the cliff. Just as it was toppling, a Democratic president was elected and tried stepping out in front of the car to block the way, but it was going too fast. It went over. Velocity happens.

Or, if you prefer to think of it this way, the economy needs a large infusion of cash to bring things back up to par. Together, Bush and Obama did separate things to accomplish this, but it wasn’t enough. And now that there’s gridlock, that “more” that is needed is being held back because of people who think that “we’ve already pushed out too much cash and it didn’t work.” If you can keep breaking the economy while asking why it ain’t fixed yet, you might have something like we’ve got now.

The things that break/fix the economy often take time.

@Jaxk Ok. Thanks for the insightful retort on why private/public funding for smart grid investing may not work or will not work.

With regards to your other statements, I think it’s clear to those Americans in the know that fixing the problem will take years and it’s all “politics and panic” that Obama is being whiplashed to get us there. If Obama’s approval rating is the downright proof that the problem has not been fixed at this point, then yes but he never said it would be. Just like any politician, he said it’s going to be difficult, which I personally interpret as, we are screwed. Thing is I still would like to be screwed by democrats rather than republicans. For reasons not of logic but predominantly emotional I guess, I just detest republican guts even though they do have a point sometimes.

I’ll just state something which is more of a fantasy here, desperate too. But first, I would say it’s all about capitalism. Just like you said, no company would invest money if they can’t get their capital back. What would it take for US companies to bring all their manufacturing back here in the US so Americans can do the job? Is this even workable or merely fantasy? Fantasy because there is no way in the world those jobs could be repatriated since such is the nature of the capitalism beast and it will not be tamed, except by less taxation? Trickle down effect? Once job demands in China is filled, left-overs then for American workers?

Because short of going back in time and destroying those bills created allowing US companies to move business out in such magnitude, there is no solution in the world that would save America whether its republicans or democrats leading us off that cliff.
@jaxk What would be a hopeful scenario? I value and respect your posts when you analyze things rather fairly and using cold hard facts to come up with something “bipartisan” in nature.

@mazingerz88

I respect that you admit that at least some of your opinion is emotional. Obviously we all have those feelings but not all of us admit them.

I’m not sure you’ll like my answer but let me give it a shot. There are a number of things that cause companies to move business over seas, primarily taxes, wages, and regulation (not necessarily in that order). We need to bear in mind that moving a company or an operation overseas, is not cheap. It is in fact very expensive. So the decision to move an operation overseas will need some compelling arguments. But when looking at global competition, if you can’t be cost competitive you will need to do something or go out of business.

Wages are most commonly quoted as the reason for a move, followed by taxes. both can be compelling but they have to offset the start up cost and the import duties. they also have to be sufficient to offset the degradation in customer service, quality control issues, and let’s not forget language problems. The tax problem is large but if your manufacturing overseas, you still have to pay US taxes on the profits you make here. Yeah, maybe some manipulation can be done but basically you still pay them. So it may affect the location for you corporate headquarters but there are more important issues for the operation. I would probably put corporate taxes as the least significant aspect of this decision. Keep in mind however that the more profitable the company is, the more impact this will have. Kind of a double edged sword.

Wages, it’s hard to beat this one. It’s hard to calculate the cost of wages since they are very dependent on the type of business. If it is a service business, the payroll expense can be more the lion’s share of all your expenses. That’s one reason you see a lot of customer service going to India or some such place. Salaries are the primary driving force for costs. In a manufacturing or more product oriented business, salaries are a smaller piece of the pie. Typical payroll costs might be 35% of your expense budget . So if you average salary drops from $50K to $10K, you’ve dropped 80% of of your payroll cost. But only 28% of your total costs. Still pretty significant.

Now we get to regulation. This one staggers my imagination. There was a pretty comprehensive study done in California on the cost of regulation. I don’t expect anyone will read the study (it’s quite long and boring) but it gives us some idea of how much regulation costs us. To be clear the cost of regulation in a service industry will be much lower than the cost in a manufacturing industry but the total is surprising. In California, the total cost of regulation $492 Billion per year. More than 5 times the states general fund and ⅓ of the total budget and averaged $134,000 per small business. The cost of regulation actually doubles the cost of everything you buy. Most people don’t see or want to believe how dramatically regulation affects our costs (every time someone says we need more regulation I shudder). But if you look at a manufacturing plant everything they use electricity, phones raw materials, etc. are all more expensive as a result of regulation. Then add on the cost of the regulation for that specific plant and the total is staggering. Whereas wages can account for significant saving in the expense category, regulation affects the cost in all categories, expense, cost of goods, everything. This is where I think we lose the most. We can’t get rid of all of it, that would be foolish. But if we could get even a minor reduction, it would benefit us all in lower costs for products and better competition world wide. Many countries have virtually no regulation and it is difficult to compete with them from here. I have many examples of completely useless and costly regulation. Let’s at least get rid of them. Sort of give ourselves a chance. And I know this is a pipe dream but if we could at least consider the cost before enacting new regulations it could really help.

Anyway, as usual I’ve drawn this out much further than I expected. But in order of importance I would say regulation is the biggest driver for moving business overseas, followed by wages, then taxes. The order could change depending on the industry. That’s my opinion, I could be wrong.

Sometimes, there’s a cost for deregulation, as well. This Great Recession is in large part due to the deregulation of banks, who then sought to profit from being able to take wild risks that they wouldn’t have been able to before. Arguably, keeping the regulation was a cost worth paying.

@filmfann Of course they would. They would block its passage in the House, and if it miraculously got past the house, they would filibuster in the Senate. But the hypocrisy of doing that then claiming to run on getting America back to work would be palpable.

@marinelife Upgrading the aging grid we have now to a smart grid will require ditch diggers and manual laborers right along with engineers and computer scientists. It would put a very large number of people to work, people of all skill levels. And with those people holding jobs, they would be off the job market making it easier for the remaining unemployed to find a job outside the grid project.

@mazingerz88 Thanks for the thoughts on it. It seems to me the pushing for it would be a win/win. Either it gets passed and puts lots of people to work, delivering an infrastructure upgrade that will bear economic fruit for many decades to come, or Republicans have to go on record as opposing a major effort to put people back to work on something we clearly need to do.

@Jaxk I wouldn’t expect you to admit that either the WPA or the stimulus worked. The facts prove conclusively both did, but those are facts, and right-wing ideology is only interested in facts that agree with right-wing confirmation bias.

Let’s NOT forget about history, because that is what shows that right-wing oppositin to doing big things is wrong headed. History shows that a public/private initiative built the transcontinental railroad, making it possible to cross the country in days whereas the trip had required the better part of a year and not all who set out made it alive. It made commerce between the coasts and all points in between a reality. It not only put a ton of people to work, it has paid off in massive economic growth due to the increased movement of goods and people it allowed.

The WPA build Doubleday Field in Cooperstown, New York; LaGuardia Airport, New York; Camp David, Maryland; Dealey Plaza in Dallas Texas; The Mathematical Tables Project; All these and many more have been contributing to our lives and economy now for 70 years. Hoover Dam was started in 1931 and completed in 1936. Before FDR took office, the unemployment rate and GDP were heading straight down. by Infrastructure projects took the unemployment rate from 25% in 1933 to under 15% by 1937.. By 1941, before Pearl Harbor, the GDP had climbed back to where it was projected to be had there been no depression. If that’s not working, give me Democratic failures to the great Republican success of Herbert Hoover.

And this stimulus. Way too much of it, over half, was in tax breaks to business. In a demand side crisis, that’s useless. But the part that was spent on infrastructure certainly did work. In Bush’s last year, we lost 2.6 million jobs. We lost 720,000 in his last month. We’ve added private sector jobs now for the past 15 months running, totaling over 2 million jobs added. Again, if that’s not working, I’ll take Democratic failure to the stunning Republican success of squandering 2 million jobs.

@laureth

I don’t really disagree that the demise of Glass-Steagal hurt us. It didn’t cause the recession nor the derivatives trading. But it did allow banks to leverage huge assets for greater gain (and subsequent loss). Unfortunately no one is talking about putting that back. Instead we’ve decided to create a consumer credit agency and implement all sorts of costly measures against the banks (to punish them I presume). All of which tends to cost us money without addressing the problem. Typical regulation.

We were so upset with Enron that we passed Sarbanes-Oxley. Now there no question that Enron and Worldcom, were huge events. But let’s also not forget that thier deception was Illegal already. People went to jail. One even committed suicide to stay out of prison. Nonetheless Sarbanes Oxley was our solution (I guess to make it even more illegal). The first year cost of implementing this bill was almost $4 million PER COMPANY. The total negative effect of this legislation has been estimated to be $1.4 Trillion the first year of implementation. Ongoing costs are estimated between $2 and $5 million annually per company (Sarbanes-Oxley only pertains to publicly traded companies).

Anyway to try and keep this reasonably short, not all legislation is bad. Which is why I say to eliminate it all would be foolish. But legislation can be both costly and ineffective or it can be costly and counter productive. The trick is to get rid of the bad and costly. There should be no shame in eliminating bad regulation. Unfortunately we use any hint of eliminating some of it as a rallying cry.

@john65pennington I would have no problem with either mandate. I’d see this being a public/private initiative much like the Transcontinental Railroad and the Interstate Highway Systems projets were. The Federal element would assure right-of-way acquisitin where needed and overall management of project integration. Private contractors would do much of the work. But your suggested mandates could be part of the requirement to bid on the work.

@Jaxk Sorry, I forgot to answer your questino about the size of investment. I haven’t the resopurces to accurately guess, but by using the puclic/private initiative format, I think it could be undertaken for considerably less. The private sector is currently sitting on considerable cash—upwards of $2 trillion. Energy companies, electric power utilities, controls and computer manufacturers all might be willing to invest some of their capital in this if they knew the Federal government would assure them needed right-of-way and regulatory clearance. Alternative energy companies would invest, because once individual homes and businesses acan generate their own needs as sell ecccess capacity back to the grid when theyu are off peak hours, their markets would get a very substantial boost.

@laureth You’re so right. Suply side solutions are not useful in resolving a demand side problem. We need to get the middle class back to work and seeing their incomes on a growth curve once more. Adjusted for inflation, middle-class earnings have been declining over the past decade. The bottom quintile has taken the worst hit. When the bulk of Americans can’t afford to buy goods and services, no amount of tax cuts for the rich and the corporations is going to to generate jobs. That’s not a suggestion that corporate executives are evil—just that they aren’t stupid. They aren;t going to hire a legion of new workers and buy trainloads of raw materials to fill up warehouses with stuff they can’t sell once it’s made.

@Jaxk The On-shore/off-shore issue is a very intereting one, and I’d like to get into that in a separate thread with that topic. I’m guessing that a careful study would find that corporate income taxes are pretty low in the list of motivating fators. While we have the second highest corporate income tax rate among developed nations, our tax code is no so riddled with loopholes that less than 1 corporation in 3 pays ANY corporate income tax today. That’s another reason why corporate tax cuts no longer do much to stimulate job growth. I have some ideas on how to chanbge that too, but I’ll save them for a question with that as a focus.

I think that the private sector would be quite open to investing in a smart grid. It would offer them opportunities to cut costs, particularly in maintenence and line-loss per mile,; to cut costs in adding generating facilities to meet peak load demands (the smart-grid’s load balancing abilities spread that demand over a far wider area. Again, technical stuff outside thescope of this question, but suffice to say that we have to massively repair or replace the aging grid and this way of doing it would hod the promise of profits for wide sectors of the energy industry.

@ETpro

You keep saying the facts prove they worked when you know we stayed in depression for decade under FDR, that’s not working. The you say the Stimulus worked and we’re still stagnated with 9% unemployment 2 years after spending $trillion to fix it. That’s not working.

Now if you want to stay away from the economics and say the Infrastructure improvements were good things, that would be a discussion. The Dams and roads were really quite nice. But the economic recovery was sadly lacking.

Let’s look at some of your facts. You say by 1941 GDP finally broke above the 1929 level and that proves it worked. Does it bother you at all that was 12 years later. that we will finally be out of this recession by 2019. Is that a sign of success to you. And you’re bragging about it. I suppose I shouldn’t be surprised since your bragging about unemployment of 15% as well. But all of this pales in comparison to your statement that 2 million jobs have been added. Did you even read the link you posted? From your article “More worrisome is that he used cherry picking to help make his point.” The real point is unemployment. I said last year that if gas prices went over $4/gal we’d be looking at a double dip recession. We are, because we’ve done nothing to fix the problem.

@ETpro

A couple of points. You tell @laureth that the supply side economics won’t work. That Companies won’t spend money unless there is a growing demand. Then tell me that companies will invest in you ‘Smart Grid’ to save costs. The same exact argument I made with my freezer example that you ridiculed. Your not only expecting them to invest but to do so when Obama has specifically said he will be raising costs and discouraging usage.You say supply side won’t work and then push a huge supply side project.

And then you say the tax code is riddled with so many loopholes less than 1 in 3 corpoarations pay tax. Yet you primary argument as to who would invest in your project are the guys with the biggest loophole, the biggest tax incentive. The Green Energy industry, that’s where a lot of the loopholes come into play.

@Jaxk If I went to a doctor because I was feeling ill, and that doctor spent 3 years treating me, and in the process made my troubling symptom (unemployment) FAR FAR worse, taking it from 4% in 1929 to 25% in 1933, I would not think that doctor was actually secretly helping me. I really would not care what spin his cheerleaders came up with. I’d fire Dr. Herbert Hoover and get me a new doctor. When Doctor Roosevelt was able to take my symptom (unemployment) from 25% in 1933 to 14.5% in 4 years, I would think I was getting better. It wouldn’t matter to me what Dr. Hoover’s cheerleaders said about the definition of depression. I’d think I was getting better.,

And when Dr. Hoover’s cheerleaders bellowed and threatened till my good doctor FDR tried their prescription of cutting spending one more time, and my symptom suddenly got worse (unemployment shooting back up to in1938), I would flipping KNOW that Doctor Hoover’s cheerleaders were not on my side. They might be cheering for somebody somewhere that was thrilled with my bad news, but they would not be friends of mine.

We’ve got the exact same thing going on today, and the cheerleaders want to go back to Bush’s 2.6 million jobs lost in a year, because they have this definition that says that gaining 2 million jobs in the last 15 months isn’t good enough, and we need to lose another 2.6 million quick. That’s really a hard package to sell, and I give the GOP credit that they are able to bamboozle so many Americans into supporting it.

@ETpro

Good one. I’ve got you down to comparing FDR with Hoover. And I’ve got to admit in a head to head competition, FDR beats Hoover. Of course I’m not sure comparing two bad records to see which is worse is really telling us much.

I’ll even admit that comparing FDR to a lingering illness is a good comparison. But I think that if it took 12 years to cure my sickness last time, I might ask if he has something that might work a little faster this time.

I know you guys are desperate for good news but let me see if I can remember how this went. When the Stimulus was first passed, they decided to use ‘Jobs Saved or Created’. If memory serves they were using number in the 2 million range at that time as well. Then when it became clear that no one was believing this made up measurement, (hell not even the whitehouse staff believed it) they switched to jobs created. That was a good move because the census was hiring like crazy and they could show good numbers. Then the census began to lay off. So in their infinite wisdom they decided to go to private sector jobs. That way they could ignore the losses that they previously claimed as gains. And of course they shift the measurement window at each stage to use the best possible numbers. So if I have this right we had 2 million ‘Jobs Saved or Created’, then 2 million ‘Jobs Created’, then 2 million ‘Private Sector Jobs Created’. And here’s the kicker, all through these measurements unemployment has lingered in the 9% range.

So you look back at Bush and see an unemployment of 5% and say that’s terrible because he didn’t create enough jobs. Then you look at Obama and see a 9% unemployment rate but say that’s good because he created more jobs. Here’s a simple rule (and you may want to write this down), 5% unemployment is better than 9%.

@Jaxk Yeah yeah. If only you would have been there in 1929, you’d have pushed the Create Jobs button on the president’s desk and BOOM! full employment overnight. No need to talk about history when fantasy works so much better.

Government spending never creates jobs. Only the massive austerity program of WWII got us back to full employment. The government stopped spending anything, and BOOM, magically everyone went to work. Only that isn’t what happened in the real world From 1941 to 1942, government spending went up 450%. We all agree that ended unemployment, the last lingering downside of the Great Depression.

But in the down = up world of right wing ideology, that means that spending doesn’t work.

In the lie = truth world of right-wing ideology, it is impossible for the government to create jobs, so we should turn government over to right wingers because they know how to create jobs.

Yes, yes, how tragic we couldn’t have had 16 years more of Herbert Hoover back then. Or 8 more years of George W. Bush after his moronic policies hit the fan in the Great Recession.

In order to make down = up., you want to take a single statistic from a single moment in Bush’s 8-year presidency, and say that’s all we need to look at. Unemployment was 5% at one point. So Bush was a god of full employment. But we folks in the reality-based community look at trends. Bush created fewer jobs with his economic policy than any president since Hoover. And he set in motion an economic tsunami that would have taken us into a second Great Depression if it had not been for his one sensible act, the TARP, and Obama following that up with the stimulus.

But in the looking-glass world of right-wing politics, everything is reversed. Bush was a genius of economic management, and gaining 2 million jobs now is much worse than loosing 2.6 million in his last year.

With logic like that, there is no point carrying on this discussion.