By Austin Hill
Yes, you read correctly.
“Spread the jobs around.”
You’re probably familiar with Barack Obama’s well documented intentions to “spread the wealth around.” In a discussion about his vision for economic recovery back during the campaign of 208, he expressed that intention using those precise words (do a web search with the President’s name and the phrase, and see what pops up).
Today, the President struggles with the political consequences brought about by the stifled economy, which has been brought about his own “wealth spreading” ways. Yet within the Obama worldview, it makes sense that a President who has displayed no vision for wealth creation – he has only championed ways in which to re-distribute existing wealth – would likewise have no real vision for job creation, and would instead attempt to “spread around” the inadequate number of jobs that already exist.
Enter Dean Baker, an Economist at the liberal Center for Economic and Policy Research in Washington, D.C. As if perfectly timed with the President’s upcoming address on the economy, Mr. Baker has proposed what he calls a national “work sharing” program, calling it a “quick route to full employment.”
A quick visit to the “Center’s” website provides a brief description of Mr. Baker’s academic paper on “work sharing.” Describing the overall program, the website indicates that what is being proposed is a “system of work sharing that would give employers an incentive to maintain workers on their payroll at reduced hours as an alternative to laying them off. The system would be attached to the existing system of unemployment compensation, with short-time compensation as an alternative to unemployment compensation. This means that work sharing would require no new government bureaucracy…”
While recently being interviewed about his “work sharing” concept on the Fox Business Channel, Mr. Baker further elaborated, stating “"...we're talking about a situation where workers would work somewhat fewer hours, and make somewhat less money…” As an alternative to being laid-off altogether, Mr. Baker surmises that “alot of workers would take that in a second..."
Indeed, what Mr. Baker is proposing is best described as a “spread the jobs around” approach to employment. And no doubt it has some of the same appeal, mostly emotional appeal, that candidate Obama’s “spread the wealth around” ideas did three years ago. But just because it “looks good on paper” doesn’t mean that it’s good, functional, or even “fair” public policy. In reality, the “spread the jobs around” idea is flawed on multiple levels.
For one, the idea of making public policy of this sort erroneously presumes that businesses aren’t already “spreading around” the workload at times. Politicians, government bureaucrats, and many academicians don’t understand this, but actual business owners and managers have to make difficult decisions with their staffs every day.
If one worker is productive and another is not, an owner or manager has to make tough choices to maintain and bolster productivity. If budgets shrink, a business must make move so as to maintain productivity while at the same time trimming expenditures. This may involve “spreading around” the workload and employee compensation, re-assigning workers to different tasks, or in some unfortunate cases laying-off workers. But when layoffs must occur, a business will generally try to retain the most productive workers, while sacrificing the least productive.
An arbitrary government policy that would force businesses to “spread the jobs around” would likely undermine businesses quite severely. Rather than prioritizing productivity, as business owners and managers must, “spread the jobs around” establishes as its goal the reduction of the unemployment rate. So what if the most competent and productive workers get their hours and wages cut, as a means of providing hours and wages to less productive workers? When desperate incumbent politicians are running for re-election, spreading the jobs around becomes an attractive policy idea if it can help reduce the unemployment rate in the short run. Thus the needs and interests of the politicians are dramatically different from those of businesses.
Another problem with “spread the jobs around” is that it begins with the wrong question in mind. Asking “why is the unemployment rate so high?” is worthwhile. But a better question is “why are so many American businesses experiencing strong profits and all time high levels of productivity, and still not hiring new workers?” Those questions are related, but they are not the same. Politicians and liberal think-tank operators don’t want to ask the “why no hiring” question, because the answer traces back to some of their favorite policy creations.
The worst part of “spread the jobs around” is that it makes mediocrity acceptable. It says “America can no longer create wealth and opportunity for all, so we must force some of that opportunity out of the hands of certain individuals, and arbitrarily place it in the hands of certain others.”
“Spread the jobs around” implies that for some people to win, others must fail just a bit. This is consistent with the Obama worldview, but it is repugnant to a majority of Americans.
Email: Austin Hill
Comments are invited!
Send feedback to: WatchDog
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Showing posts with label Stimulus. Show all posts
Showing posts with label Stimulus. Show all posts
Sunday, August 28, 2011
Sunday, June 26, 2011
Wisdom For The Fed Chairman With “No Idea”
By Austin Hill For the record, I don’t assume that the Federal Reserve chairman can ever know exactly what’s happening with the economy. And for the record, I never assume that anybody else can either.
Yet it was extraordinary to hear Federal Reserve Chairman Ben Bernanke acknowledge last week that he has “no idea” why our economy is so “fragile.” This is the man who has overseen the lending of more than $3 trillion American taxpayer dollars to foreign banks; the rapid-fire acquisition of the former giant Merrill Lynch by the gargantuan Bank of America; the multi-billion dollar taxpayer bailout of Wall Street; and the $800 billion “economic stimulus bill” from the Congress and the Obama Administration.
And now, this man with immense power over the entire world’s wealth and yet who has never been elected to any public office, has to admit that he has “no idea” why things aren’t going the way they were “supposed to.” As Trisha, a caller to one of my daily talk shows noted to me last Thursday, “We pay these people in Washington waaay too much money for them to simply ‘not know….’”
I appreciate the outrage of my fellow taxpayers over a government that has spent us into oblivion and now concludes that it has “no idea.” But I also think that this moment in time can be a “teachable moment” – if the agents of our government will be taught.
First, think about the “Obama stimulus spending.” I wonder if Mr. Bernanke has any idea how this money was actually allocated. Among the roster of expenditures was one hundred and twenty million of our tax dollars for the hiring of part time workers at senior citizen’s community centers. $87 billion for Medicaid “family planning services” (contraception). And $650 million to “assist” Americans in buying digital TV converter devices. And then there was one of my favorites from the Obama stimulus plan, the $335 million allotted for the “Booty Call” sexually transmitted diseases education program.
Free condoms and converter boxes do not spell “wealth creation.” And we can all imagine what gets stimulated when you participate in the “Booty Call” program - - but it is certainly not the economy.
The lesson here – for Mr. Bernanke, and everybody else– is that politicians and government bureaucrats DO NOT use our money as wisely as private individuals and organizations. Nobody with their wits about them would believe for a moment that doling-out “free” stuff from the government would expand the economic pie. Yet “stimulus funds” – money allocated by the Congress and President Obama specifically for the purposes of “stimulating” the economy – were spent on things like birth control and TV gadgetry, while the promised “shovel ready” infrastructure projects remain a mystery.
When private individuals and groups are left to handle their own money – and allowed to feel the pain if they fail to manage it properly - then they usually manage it in a wise way. But when politicians and bureaucrats spend our money, they’re spending somebody else’s money – and when it’s somebody else’s money, it too easy to spend it in foolish and self-serving ways.
And here’s another lesson: Even the smartest of government “leaders” often cannot handle our money better than we can individually. I still remember the Obama-Biden campaign’s “mixer” for young professionals that I attended back in September of 2008. I was a “fly on the wall” at the Phoenix, AZ hotel suite, as lots of MBA’s and JD’s and VP’s mingled around, buzzing about candidate Obama’s intellect and all the “super smart” people he would bring with him to Washington to fix the economy. By then it was apparent that Phoenix , the second-most rapidly rising real estate market in the U.S. was in nosedive mode. But Obama had a “mortgage bailout plan” that was going to fix everything – or so the party-goers told me.
Today people with late payments and bad credit scores get loan modifications, while those with current payments and good credit can’t get a return telephone call from their bank. The “super smart” people who went to Washington intent on “helping those who are hurting” have transformed the financial system into a structure that coddles the reckless, while punishing the productive.
And I wonder if Mr. Bernanke – or anybody else in the Obama Administration – has ever thought of this: In order for an economic system to function, every participant in the system has to be treated like they are fully human. From the poorest entry-level worker, to the wealthiest executive and business owner, we all must be treated like the free, grown-up, fully dignified human beings that we are meant to be. This means we must be “free” to succeed, “free” to fail, and incentivized to do the right thing.
Yet in the Obama economy, the poor are told “you can’t accomplish it on your own.” The rich are told “you’ve accomplished too much.” Business owners are told what they can and cannot do with their operating capital.
All these “lessons” really amount to matters of human character, and no amount of central bank tinkering can render them unimportant. These lessons are available to all of us, right now. Even to the man with “no idea.”
E-mail: Austin Hill
Comments are invited!
Send feedback to: WatchDog
.
Yet it was extraordinary to hear Federal Reserve Chairman Ben Bernanke acknowledge last week that he has “no idea” why our economy is so “fragile.” This is the man who has overseen the lending of more than $3 trillion American taxpayer dollars to foreign banks; the rapid-fire acquisition of the former giant Merrill Lynch by the gargantuan Bank of America; the multi-billion dollar taxpayer bailout of Wall Street; and the $800 billion “economic stimulus bill” from the Congress and the Obama Administration.
And now, this man with immense power over the entire world’s wealth and yet who has never been elected to any public office, has to admit that he has “no idea” why things aren’t going the way they were “supposed to.” As Trisha, a caller to one of my daily talk shows noted to me last Thursday, “We pay these people in Washington waaay too much money for them to simply ‘not know….’”
I appreciate the outrage of my fellow taxpayers over a government that has spent us into oblivion and now concludes that it has “no idea.” But I also think that this moment in time can be a “teachable moment” – if the agents of our government will be taught.
First, think about the “Obama stimulus spending.” I wonder if Mr. Bernanke has any idea how this money was actually allocated. Among the roster of expenditures was one hundred and twenty million of our tax dollars for the hiring of part time workers at senior citizen’s community centers. $87 billion for Medicaid “family planning services” (contraception). And $650 million to “assist” Americans in buying digital TV converter devices. And then there was one of my favorites from the Obama stimulus plan, the $335 million allotted for the “Booty Call” sexually transmitted diseases education program.
Free condoms and converter boxes do not spell “wealth creation.” And we can all imagine what gets stimulated when you participate in the “Booty Call” program - - but it is certainly not the economy.
The lesson here – for Mr. Bernanke, and everybody else– is that politicians and government bureaucrats DO NOT use our money as wisely as private individuals and organizations. Nobody with their wits about them would believe for a moment that doling-out “free” stuff from the government would expand the economic pie. Yet “stimulus funds” – money allocated by the Congress and President Obama specifically for the purposes of “stimulating” the economy – were spent on things like birth control and TV gadgetry, while the promised “shovel ready” infrastructure projects remain a mystery.
When private individuals and groups are left to handle their own money – and allowed to feel the pain if they fail to manage it properly - then they usually manage it in a wise way. But when politicians and bureaucrats spend our money, they’re spending somebody else’s money – and when it’s somebody else’s money, it too easy to spend it in foolish and self-serving ways.
And here’s another lesson: Even the smartest of government “leaders” often cannot handle our money better than we can individually. I still remember the Obama-Biden campaign’s “mixer” for young professionals that I attended back in September of 2008. I was a “fly on the wall” at the Phoenix, AZ hotel suite, as lots of MBA’s and JD’s and VP’s mingled around, buzzing about candidate Obama’s intellect and all the “super smart” people he would bring with him to Washington to fix the economy. By then it was apparent that Phoenix , the second-most rapidly rising real estate market in the U.S. was in nosedive mode. But Obama had a “mortgage bailout plan” that was going to fix everything – or so the party-goers told me.
Today people with late payments and bad credit scores get loan modifications, while those with current payments and good credit can’t get a return telephone call from their bank. The “super smart” people who went to Washington intent on “helping those who are hurting” have transformed the financial system into a structure that coddles the reckless, while punishing the productive.
And I wonder if Mr. Bernanke – or anybody else in the Obama Administration – has ever thought of this: In order for an economic system to function, every participant in the system has to be treated like they are fully human. From the poorest entry-level worker, to the wealthiest executive and business owner, we all must be treated like the free, grown-up, fully dignified human beings that we are meant to be. This means we must be “free” to succeed, “free” to fail, and incentivized to do the right thing.
Yet in the Obama economy, the poor are told “you can’t accomplish it on your own.” The rich are told “you’ve accomplished too much.” Business owners are told what they can and cannot do with their operating capital.
All these “lessons” really amount to matters of human character, and no amount of central bank tinkering can render them unimportant. These lessons are available to all of us, right now. Even to the man with “no idea.”
E-mail: Austin Hill
Comments are invited!
Send feedback to: WatchDog
.
Sunday, May 30, 2010
Has Obama "Stimulated" The Economy Yet?
By Austin Hill
President Obama has a need to further stimulate the economy.
But does the economy really need more Obama-styled stimulation?
Speaking in Paris, France this past week, Christina Romer, head of the White House Council of Economic Advisers noted that "It would be wrong to tighten fiscal policy immediately, as that would nip the nascent economic recovery in the bud.” During a week when President Obama was busy raising campaign cash for Senator Barbara Boxer in San Francisco, taking photos with the Duke University basketball team at the White House, lunching with Bill Clinton, and – yes – holding his first press conference in ten months to talk about the gulf oil spill, Ms. Romer traveled to Europe as the President’s representative to the annual meeting of the Organization for Economic Cooperation and Development, a 31-nation watchdog that includes the world's richest economies.
While there, Ms. Romer astutely observed that “unemployment is still painfully high,” and that "nothing would be more damaging than a protracted recession that brought about permanent high unemployment.” She further noted that the President was planning “further targeted fiscal actions” to stimulate the U.S. economy, after the President’s current economic stimulus plan “winds down” next year.
Ms. Romer’s remarks, innocuous and non-substantive as they were, nonetheless were consistent with the Obama Administration’s overall public posture on the economy. Yet her comments also serve as an additional reminder of two extremely important truths – truths that at times seem all but forgotten, in the midst of the ongoing economic hardship.
For one, President Obama’s “need” to stimulate the economy, and the genuine needs of the economy itself, are not the same thing. Elected politicians like the U.S. President generally always have an immediate need to appear as though they’re doing something constructive, and to make people feel good about the economy (or at least as good as they possibly can) right here, and right now.
In the past sixteen months, Mr. Obama’s immediate, short-term political need has produced a lot of public policy that positions the President to appear as though he’s rescuing people – rescuing them from the economic downturn, from “greedy bankers” and “rich executives,” from the threat of home foreclosure, from credit card debt, and so forth. And part of the political calculus involved with this kind of policy is the assumption that as long as the President gives away enough “things” to the American electorate, and appears as though he’s doing enough to “protect” them, the electorate will continue to vote for him and his party, regardless of what the economy does. This is a big gamble, to be sure, but we don’t know yet if the President’s approach will produce either political or economic success (he could up with both, neither, or one without the other).
Yet, another important truth in the midst of the murkiness is that far too much of this type of economic policy is built upon the “false assumption of government goodness.” The “false assumption of government goodness” stipulates that greed, scandal, and injustice only happen in the private sector economy at the hands of “rich people,” while those in the public sector – elected politicians and bureaucrats alike – always “do the right thing,” always manage economic resources to their best possible ends, and always act selflessly in the interests of the common good.
Thus, it is presumed, everything that President Obama seeks to do with our nation’s economic resources is for the good of everybody, done out of the benevolence of his heart. A government take-over of General Motors and Chrysler? That was done only for the sake of “saving American jobs,” right? Except that the President violated U.S. bankruptcy laws with the ways in which his Administration forced Chrysler’s secured creditors to accept pennies on the dollar as a bankruptcy “settlement” (among the secured creditors were a retirement fund for school teachers and police officers in the “red state” of Indiana), and our tax dollars are continuing to subsidize both companies even when they’re not selling adequate numbers of cars to make ends meet.
But yes, Obama “saved American jobs.” In particular he “saved” jobs occupied by members of the United Auto Workers Union, a major political supporter of President Obama and the Democratic Party. Indeed the assumption of “government goodness” is clearly false with the “government motors” scenario.
And nationalized healthcare was all about Obama blessing us with goodness, right? Well, Obamacare is so good that over half the states in our union are suing the federal government to prevent the implementation of the President’s “plan,” and nearly 70% of the American electorate now wants it repealed.
It probably doesn’t even cross Christina Romer’s mind (or Barack Obama’s, for that matter) that the constant extension of federal unemployment benefits (that have now been “extended” in some states for over two years), the likes of which she was advocating in Paris last week, might actually be giving people a dis-incentive to get back to work. But that leads us back to “truth number one,” which I’ll state here in a slightly different way: good politics does not always amount to good economic policy.
May America elect to “stop the stimulus” – before it kills us all.
Email: Austin Hill
Comments are invited!
Send feedback to: WatchDog
President Obama has a need to further stimulate the economy.
But does the economy really need more Obama-styled stimulation?
Speaking in Paris, France this past week, Christina Romer, head of the White House Council of Economic Advisers noted that "It would be wrong to tighten fiscal policy immediately, as that would nip the nascent economic recovery in the bud.” During a week when President Obama was busy raising campaign cash for Senator Barbara Boxer in San Francisco, taking photos with the Duke University basketball team at the White House, lunching with Bill Clinton, and – yes – holding his first press conference in ten months to talk about the gulf oil spill, Ms. Romer traveled to Europe as the President’s representative to the annual meeting of the Organization for Economic Cooperation and Development, a 31-nation watchdog that includes the world's richest economies.
While there, Ms. Romer astutely observed that “unemployment is still painfully high,” and that "nothing would be more damaging than a protracted recession that brought about permanent high unemployment.” She further noted that the President was planning “further targeted fiscal actions” to stimulate the U.S. economy, after the President’s current economic stimulus plan “winds down” next year.
Ms. Romer’s remarks, innocuous and non-substantive as they were, nonetheless were consistent with the Obama Administration’s overall public posture on the economy. Yet her comments also serve as an additional reminder of two extremely important truths – truths that at times seem all but forgotten, in the midst of the ongoing economic hardship.
For one, President Obama’s “need” to stimulate the economy, and the genuine needs of the economy itself, are not the same thing. Elected politicians like the U.S. President generally always have an immediate need to appear as though they’re doing something constructive, and to make people feel good about the economy (or at least as good as they possibly can) right here, and right now.
In the past sixteen months, Mr. Obama’s immediate, short-term political need has produced a lot of public policy that positions the President to appear as though he’s rescuing people – rescuing them from the economic downturn, from “greedy bankers” and “rich executives,” from the threat of home foreclosure, from credit card debt, and so forth. And part of the political calculus involved with this kind of policy is the assumption that as long as the President gives away enough “things” to the American electorate, and appears as though he’s doing enough to “protect” them, the electorate will continue to vote for him and his party, regardless of what the economy does. This is a big gamble, to be sure, but we don’t know yet if the President’s approach will produce either political or economic success (he could up with both, neither, or one without the other).
Yet, another important truth in the midst of the murkiness is that far too much of this type of economic policy is built upon the “false assumption of government goodness.” The “false assumption of government goodness” stipulates that greed, scandal, and injustice only happen in the private sector economy at the hands of “rich people,” while those in the public sector – elected politicians and bureaucrats alike – always “do the right thing,” always manage economic resources to their best possible ends, and always act selflessly in the interests of the common good.
Thus, it is presumed, everything that President Obama seeks to do with our nation’s economic resources is for the good of everybody, done out of the benevolence of his heart. A government take-over of General Motors and Chrysler? That was done only for the sake of “saving American jobs,” right? Except that the President violated U.S. bankruptcy laws with the ways in which his Administration forced Chrysler’s secured creditors to accept pennies on the dollar as a bankruptcy “settlement” (among the secured creditors were a retirement fund for school teachers and police officers in the “red state” of Indiana), and our tax dollars are continuing to subsidize both companies even when they’re not selling adequate numbers of cars to make ends meet.
But yes, Obama “saved American jobs.” In particular he “saved” jobs occupied by members of the United Auto Workers Union, a major political supporter of President Obama and the Democratic Party. Indeed the assumption of “government goodness” is clearly false with the “government motors” scenario.
And nationalized healthcare was all about Obama blessing us with goodness, right? Well, Obamacare is so good that over half the states in our union are suing the federal government to prevent the implementation of the President’s “plan,” and nearly 70% of the American electorate now wants it repealed.
It probably doesn’t even cross Christina Romer’s mind (or Barack Obama’s, for that matter) that the constant extension of federal unemployment benefits (that have now been “extended” in some states for over two years), the likes of which she was advocating in Paris last week, might actually be giving people a dis-incentive to get back to work. But that leads us back to “truth number one,” which I’ll state here in a slightly different way: good politics does not always amount to good economic policy.
May America elect to “stop the stimulus” – before it kills us all.
Email: Austin Hill
Comments are invited!
Send feedback to: WatchDog
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