One Reason That Stimulus Bill Won't Be Stimulating But Does Stink To High Heaven

Columnist Ron Hart:

If you wonder why it makes no sense to embark upon these infrastructure projects that Obama is proposing, look no further than New Mexico's Governor Bill Richardson.

Obama took on a little more ethical taint recently when Bill Richardson had to remove himself from consideration as Commerce Secretary because of an investigation into his awarding of state contracts to donors. Apparently, Richardson thought what he did was too corrupt for a Cabinet confirmation, but not corrupt enough to step down as governor of his state. And that is my point.

We are getting ready to spend money that we do not have to pay off political cronies and unions in these "shovel ready projects" that we used to know as "pork."

They say there are no "pork earmarks" in the bill, but the whole bill is pork.

Whole thing here.

Comments

[domoarrigato]

In NM corruption is taken as a badge of pride.

[Taktix?]

Obama took on a little more ethical taint recently...

Obama took Richardson's taint?

Looks to me like the Anointed One is trying to cut into URKOBOLD's turf...

[Seward]

I heard something on the radio this morning about I believe either an OMB or a CBO report which stated that the majority of these projects wouldn't even see any funding for something like four years. I think the larger economic argument against stimulus plans is that they take too long to take effect to do much, well, stimulating.

[Joe Hunley]

As Obama pushes his Stimulus Package as one of his Plans to improve the economy and "Change" the ever growing burden on the American Taxpayer, we learn that he may be looking to reverse the "Mexico City Policy". Surely--this brilliant speaker who dazzled the American public understands that giving to the Taxpayer, then taking from the Taxpayer, achieves nothing--but then--maybe he does not understand.

[joe]

You know what makes an ad homenim argument even dumber? When you can't even come up with anything to attack the target with, so you have to substitute someone he knows.

Dumber still is when you don't even have anything on that guy, so you have to resort to "where there's smoke there's fire" implications.

[jayjayhawker]

This is a bit off subject. But many of my professors are calling off classes today so that everyone can watch obama take office today. I am curious to know if my proffesors would be doing the same thing if McCain won? Maybe, I don't know.

[Seward]

joe,

The general point concerns how government spends money; and that point has nothing to do with whether an R or a D is behind the government official in charge. Indeed, let's peruse the books of the DoD, surely an agency which is quite bi-partisan. Of course, at least as late as 2002 that would have been difficult, because they basically have no clue where large segments of the "people's money" is going to. Has that situation changed appreciably?

[Naga Sadow]

Damn your luck, jayjay!!! I live in Mississippi. No classes canceled.

[Seward]

The recent wars in Iraq and Afghanistan we've been involved in are also a pretty good example of how money just gets lost, thrown down a hole, etc. when the government decides to undertake some massive spending measure.

[Warty]

ethical taint

I hear the URKOBOLD only uses free-range, fair-trade, no-cage taints.

[joe]

Seward, why are you talking about Democrats and Republicans?

[sage]

When you can't even come up with anything to attack the target with, so you have to substitute someone he knows appointed for a cabinet position after thourough vetting.

FTFY

[joe]

Uh...so?

[Gilbert Martin]

"They say there are no "pork earmarks" in the bill, but the whole bill is pork."

Yes and the whole thing is nothing but transfer payments as well.

Government never "creates" anything. All it does is redistribute.

And redistribution never "improves" an economy.

[adrian]

But gilbert there is a free lunch for us now that we can stimulate and then the multiplier takes effect and the only issue may be less growth in the future but if we grow fast now and slow later we will be ahead and of course the only thing we have to do is put most of the money into the right projects!

Keynesian Economics 101

[duderman]

Joe, you might need a little refresher on what an ad hominem attack is, because this article ain't one:

http://en.wikipedia.org/wiki/Ad_hominem

[joe]

When you do that, adrian, you're supposed to write something stupid. All you did what write the conventional wisdom among economists in a run on sentence.

[jayjayhawker]

Naga sadow,

I don't know where you attend school, but I doubt it is as liberal as KU. The worst part is that the proffesors didn't tell me until I got here....I would have slept if I had known.

[Taktix?]

The recent wars in Iraq and Afghanistan we've been involved in are also a pretty good example of how money just gets lost, thrown down a hole, etc. when the government decides to undertake some massive spending measure.

True, but DoD spending gets it's own, built-in protection from scrutiny. If one even questions how the money is spent, they are met with ridiculous accusations, like "you want the troops to get killed!"

No one wants to purposely endanger military personnel for budget reasons, but if you tell me 100% of DoD spending goes for legitamate purposes, I'd call you as cracked as these Obamaniacs...

[joe]

...and of course the only thing we have to do is put most of the money into the right projects

I get a chuckle out of people who think it's a sign of intellectual rigor and virtue to consider the facts surrounding an idea immaterial to rendering a judgement about it.

[Naga Sadow]

Slept in?!?! On this historic day? Time to march on Washington. March the modern way, throwing shoes and chanting slogans, not the traditional looting and pillaging march. Where the hell is KU?

[Jamie Kelly]

On this historic day, joe, can't we all just get along?
Now get your white liberal ass back to the TV so you can dump cum all over it.

[Naga Sadow]

Jamie Kelly's back? Dude! Where ya been?

[thoreau]

I'm a big skeptic of Obama, but I can't fault him over a guy who decided not to join the administration because of ethical issues. Something tells me that the conversation over that decision was a two-way discussion, not just Richardson magnanimously calling up Obama and falling on his sword for the good of the new President.

[Gilbert Martin]

"But gilbert there is a free lunch for us now that we can stimulate and then the multiplier takes effect and the only issue may be less growth in the future but if we grow fast now and slow later we will be ahead and of course the only thing we have to do is put most of the money into the right projects!

Keynesian Economics 101"

Ah yes, the "multiplier effect" - something that no one on earth has ever been capable of proving exists at all - just like man-made global warming.

LOL

[Jamie Kelly]

Jamie Kelly's back? Dude! Where ya been?

Alcohol rehab. Seriously.

[adrian]

joe, conventional wisdom is what got us here. You think it's right, i think it's stupid. We'll see who's right.

[adrian]

I get a chuckle out of people who think it's a sign of intellectual rigor and virtue to consider the facts surrounding an idea immaterial to rendering a judgement about it.

OK what are the facts about fiscal policy?

[Seward]

joe,

Because I like to be bi-partisan and inclusive.

I get a chuckle out of people who think it's a sign of intellectual rigor and virtue to consider the facts surrounding an idea immaterial to rendering a judgement about it.

Well, the facts surrounding government spending as a means to stimulate an economy are fairly well known. It is ineffective because it either crowds out private spending or because it takes so much time to be spent. As I noted above either the OMB or the CBO has stated that the majority of the funding will not be spent for at least four years.

Taktix,

Sure, each major party has its moronic economic hobbyhorses they love to spending money on.

[Naga Sadow]

Well glad you made it out . . . or escaped . . . or . . . just fill out the appropriate warm fuzzy comment in your mind. Kinda feel like a dick for asking now since I'm a bartender.

[Seward]

thoreau,

Faulting him for Richardson is not what I take away from the clipped portion of the article. I take as more of a criticism via microcosm of how government spending works.

[Taktix?]

Sure, each major party has its moronic economic hobbyhorses they love to spending money on.

Agreed. I'm just saying that defense spending is an untouchable...

[Naga Sadow]

Correct Taktix. We need everyone in the world thinking we're out of our fucking minds. Keeps em in line.

[Seward]

Taktix,

Well, if we didn't fight so many wars it might be touchable.

[Isaac Bartram]

Seward

As near as I can tell the value of a stimulus package lies mainly in its ability to take peoples' minds of the economy while it repairs itself.

Naturally, if the intervention is too extreme or maldirected, as in the case of H Hoover and, possibly, the present crisis, it will short circuit the economy and lead to a deeper prolonged recession rather than a self-correcting one.

Better the kind of cosmetic approach of Clinton who signed a modest highway bill and an extension of unemployment benefits.

His largely token tax increase to satisfy the left-labor wing was not big enough to create any significant drag, in much the same way as increases in the minimum wage to just below the generally prevailing wage effect only those at the margins.

[R C Dean]

Hart's point is a little confused, but the Richardson kerfuffle raises at least the following two issues:

(1) Narrowly, WTF happened that he got the nom in the first place? Was this just a total breakdown in the vetting process (incompetence), or were the Obama people looking at him so inured to ethical problems that it didn't seem like a big deal?

(2) More broadly, if you think pay-for-play is a bad thing, then the playing field just got enormously bigger with all these stimulus bills. Repeat after me: Money and power will always find each other. And, holy crap, have the stakes ever been raised in that game, with us taxpayers holding the bag.

[Seward]

Isaac Bartram,

Something I learned about the Clinton tax increase was that it had a long delay for many people, and that way it allowed them to shift their money, etc. to areas where the tax wouldn't bite them. Indeed, it only led to a short-term, roughly year and a half long boost in revenues as best as I can tell.

[Vermont Gun Owner]

Naga sadow,

I don't know where you attend school, but I doubt it is as liberal as KU. The worst part is that the proffesors didn't tell me until I got here....I would have slept if I had known.

UVM classes are all on, and I'd be surprised to find anyone that calls UVM anything but very liberal.

[Chuck]

jayjayhawker--

Just FYI, I did not cancel classes this morning. The beauty and utility of the simplex algorithm is far greater than the value of watching some guy put his hand on a book and repeat time-worn phrases that he does not intend to abide by. And then deliver some speech that will be replayed ad nauseum on the news and intarwebs.

[Isaac Bartram]

Seward

Well, I heard that Hillary arranged to have her deferred income and severance from The Rose Law Firm credit to 1992 so that she would be taxed at the old rate.

[Isaac Bartram]

That wasn't meant as a cheap shot at HRC, by the way.

My point is that with so many weasel clauses in it, the tax increase cannot have been too effective at raising revenue.

[jayjayhawker]

Chuck,

bless (in a nonreligious) your academic heart. if I had to choose between watching the speech and having class.....I will take the lecture any day of the week

[R C Dean]

My point is that with so many weasel clauses in it, the tax increase cannot have been too effective at raising revenue.

It doesn't take the big money long to figure out how to get out from under any tax increase. That's why you can't raise but so much taxing the truly wealthy, and have to resort to regressive taxes (very broadly, inculdes issuing debt and inflationary monetary policy) and/or taxes on the merely well-off or genuinely middle class.

[Isaac Bartram]

R C Dean

Exactly.

Which leads me to believe that liberals are motivated by resentment of the rich rather than concern for the poor when they get control of tax policy.

Or, they're just stupid.

...and have to resort to regressive taxes...

For proof of this go only as far as the "social security surplus". Money which serves no useful puprpose in making Social Security viable in the future but serves only to provide money to spend today to buy votes. The only tax which could be more regressive is a poll tax.

On the other hand, the raising of the highest marginal rate a token amount, like Clinton did, won't raise much revenue but will buy a hell of a lot of votes from the "soak the rich" crowd.