Keep Dreaming, Mr. Vice President
According to The Hill, in a conference call yesterday with the nation’s governors, Vice President Joe Biden said that “In my wildest dreams, I never thought it would work this well.” The “it” would be the administration’s $787 billion so-called “stimulus” package.
At the same time, USA Today reported:
Nearly $10 billion in stimulus aid to repair the nation’s tattered highways has largely bypassed dozens of metropolitan areas where roads are in the worst shape, a USA TODAY analysis shows… The problem is a byproduct of a stimulus package designed to spend as fast as possible to revive the economy. Many roads are in such bad shape that repairs would take too long and cost too much to qualify for funds, says John Barton, head of engineering for Texas’ Department of Transportation. The result is that counties with the worst roads won’t get much more repair money than counties with better roads. The 74 counties with half of the nation’s bad roads will split $1.9 billion, records show; counties with no major roads in bad shape will split about $1.5 billion.
A few weeks ago I was driving on I-70 somewhere around Washington, PA 
and got stuck in a traffic jam over what appeared to be a small bridge maintenance job. A sign, also funded by taxpayers, proudly declared that the maintenance was made possible by the “stimulus” legislation. What irritated me more than the traffic jam was the fact that the stretch of I-70 I was on is a notoriously white-knuckle ride. The pavement is old and the two lanes are squished between cement dividers, leaving little room for error. A reasonable person might conclude that fixing I-70 would be a priority. But reasonable and Congress go together like wolves and sheep. To me it was further evidence of the inefficient, politicized nature of federal infrastructure spending. (It also brought to mind former pork-barrel congressman Bud Shuster’s lightly traveled I-99 in central PA.)
In a different article USA Today also reported:
The $787 billion economic recovery package also is stimulating growth in the federal government as agencies hire thousands of workers and spend millions of dollars to oversee and implement the package, according to government records and spokesmen… That’s helped fuel the continued growth of the federal government, which increased by more than 25,000 employees, or 1.3%, since December 2008, according to the latest quarterly report. During that time, the ranks of the nation’s unemployed increased by nearly 4 million, Labor Department statistics show.
Apparently for VP Biden, “stimulus” success means inefficient infrastructure spending and more federal employees.
Bob McDonnell: The Modern Republican
This is from the Reagan administration’s deregulatory 1981 energy plan: “All Americans are involved in making energy policy. When individual choices are made with a maximum of personal understanding and a minimum of government restraints, the result is the most appropriate energy policy.”
Many modern Republicans claim devotion to Ronald Reagan’s ideas, but they often seem to forget about the “minimum of government” thing. The following points are from Republican Virginia gubernatorial candidate Bob McDonnell’s “More Energy, More Jobs” plan:
- “McDonnell was the chief sponsor of legislation creating the Virginia Hydrogen Energy Plan.”
- “McDonnell also supported grant programs for solar photovoltaic manufacturing, tax exemptions for solar energy and recycling property, and tax credits for solar energy equipment.”
- “In order to protect Virginia’s citizens from the skyrocketing wholesale prices of electricity seen in other states, McDonnell brought together all the necessary stake holders to re-regulate electricity in Virginia.”
- “Currently, Virginia is the second largest importer of electricity behind California. This is unacceptable.”
- “Bob McDonnell will establish Virginia as a Green Jobs Zone to incentivize companies to create quality green jobs. Qualified businesses would be eligible to receive an income tax credit equal to $500 per position created per year for the first five years.”
- “The Virginia Alternative Fuels Revolving Fund was established to assist local governments that convert to alternative fuel systems . . . Bob McDonnell will expand the purpose of this fund to include infrastructure such as refueling stations, provide seed money and aggressively pursue additional grants.”
- “Bob McDonnell will make Southwest and Southside Virginia the nation’s hub for traditional and alternative energy research and development…To assist with the attraction, building and operation of major energy facilities in Southside and Southwest Virginia, we will also support the establishment of the Center for Energy.”
- “To help Virginia universities gain access to federal stimulus money, as Governor, Bob McDonnell will establish the Virginia Universities Clean Energy Development and Economic Stimulus Foundation.”
- “As Governor, Bob McDonnell will leverage stimulus funding to incentivize individuals and businesses to conduct energy audits and encourage public private partnerships between small businesses and government.”
It’s true that McDonnell’s plan has some free market elements, and also that Ronald Reagan supported some wasteful energy boondoggles. However, the degree to which the modern Republican wants to micromanage and manipulate the energy industry is remarkable. McDonnell is almost setting out a Soviet five-year plan for a substantial part of the Virginia economy. For goodness sakes, he wants to treat Virginia like a separate country and try to fix the supposed problem that it is “importing” too much energy from other states!
It’s not just energy. Look at the top-down central planning ideas that McDonnell has for “creating jobs”:
Filed under: Energy and Environment; General; Government and Politics
Yoga Instructors: Enemies of the State(s)
The NY Times reports today on various state government efforts to regulate yoga classes by forcing instructors to obtain a government license.
I’m not going to get into why government licensing is a pernicious racket here. Rather, I just want to make a point about the nature of the mini–Washington DCs currently in charge of laundering Uncle Sam’s so-called economic “stimulus” money.
From the NYT article:
In March, Michigan gave schools on the list one week to be certified by the state or cease operations. Virginia’s cumbersome licensing rules include a $2,500 sign-up fee — a big hit for modest studios that are often little more than one-room storefronts.
Lisa Rapp, who owns My Yoga Spirit in Norfolk, Va., said she had canceled her future classes and was preparing to close her seven-year-old business this summer. “This caused us to shut down the studio all together,” Ms. Rapp said. “It’s too bad, because this community really needs yoga.”
A nice little story to keep in mind the next time you hear some politician or government apologist claim that the states’ current inability to spend as they did before the recession is somehow endangering an economic recovery.
Save Free Enterprise–Starting Now
As Dan Mitchell noted below, the U.S. Chamber of Commerce has launched a “Campaign for Free Enterprise” to stop the “rapidly growing influence of government over private-sector activity.” Chamber president Thomas Donohue told the Wall Street Journal that an “avalanche of new rules, restrictions, mandates and taxes” could “seriously undermine the wealth- and job-creating capacity of the nation.”
Indeed. Given the scope and extent of the Obama administration’s assaults on private enterprise — national health insurance, energy central planning, pay czars, abrogation of contracts, skyrocketing spending, and so on — free enterprise can use all the help it can get. I welcome the Chamber to the fight.
But it would be nice if the Chamber had joined the fight for economic freedom a bit earlier, say back in February when many of us were trying to stop the administration’s massive “stimulus” spending bill. That bill’s official cost is $787 billion; with interest, it would be about $1.3 trillion; and if you assume that its temporary spending increases will be extended, it will cost taxpayers about $3.27 trillion over 10 years.
Back then, Donohue had a few criticisms of the bill, but
The bottom line is that at the end of the day, we’re going to support the legislation. Why? Because with the markets functioning so poorly, the government is the only game in town capable of jump-starting the economy.
Or they might even have started defending free enterprise last fall, instead of going all-out to push the TARP bailout through Congress.
Converts to the cause of limited government are always welcome. But we might not need a $100 million Campaign for Free Enterprise if American business had opposed big government when the votes were going down in Congress. Still, better late than never.
Filed under: Government and Politics; Political Philosophy; Tax and Budget Policy
So-Called Stimulus Could Lead to $50 Billion of Fraud
MarketWatch reports that experts are predicting about $50 billion of fraud will result from the $787 billion pork-barrel spending bill approved by Congress earlier this year. That’s a huge amount of fraud being financed with borrowed money, but there is a silver lining to this dark cloud. Using basic math, that means only $737 billion of the so-called stimulus can be classified as waste:
Swindlers, con men, and thieves could siphon off as much as $50 billion of the government’s planned stimulus package as the money begins flooding the economy in coming months, according to David Williams, who runs Deloitte Financial Services Advisory and counsels clients on fraud prevention.
…Earlier this month, FBI Director Robert Mueller warned the nation to brace for a potential crime wave involving fraud and corruption related to the economic stimulus package. “These funds are inherently vulnerable to bribery, fraud, conflicts of interest, and collusion. There is an old adage, that where there is money to be made, fraud is not far behind, like bees to honey,” Mueller said.
Public Tires of Wasteful “Stimulus” Spending
The president may believe that he’s created thousands (or is that millions?) of jobs, but the public doesn’t believe him. In fact, according to Rasmussen Reports, a plurality of the public wants to drop the rest of the “stimulus” spending while keeping the tax cuts:
Forty-five percent (45%) of Americans say the rest of the new government spending authorized in the $787-billion economic stimulus plan should now be canceled. A new Rasmussen Reports national telephone survey found that just 36% disagree and 20% are not sure.
…
Just 20% of adults say the tax cuts included in the stimulus plan should be canceled while 55% disagree. The stimulus plan includes $288 billion in tax cuts.
While there is a wide partisan gap on the question of stimulus spending, there is little partisan disagreement on maintaining the tax cuts.
President Obama on Monday vowed to speed up the pace of stimulus spending and said the money will help “create or save” 600,000 more jobs this summer.
However, only 31% of Americans believe the new government spending in the stimulus package creates new jobs. Forty-eight percent (48%) say the stimulus spending does not create jobs, and 21% are not sure.
This is certainly a better approach for growing the economy. The people are proving to be a lot smarter than their governors in Washington.
Filed under: Finance, Banking & Monetary Policy; Tax and Budget Policy
Injustice of Federal Subsidies
Ohio lawmakers are hot under the collar about federal stimulus dollars possibly helping Georgia bid away one of its big employers. Here’s the Dayton Daily News:
NCR’s news release touting its decision to move jobs from Dayton to the Atlanta, Ga. suburbs includes one factoid that has Ohio lawmakers in a fury: The City of Columbus, Ga. plans to use federal stimulus dollars to buy a building and construct another to accommodate the 870 manufacturing jobs expected to come to the that Atlanta suburb. ‘The fact that economic stimulus dollars were used to move an Ohio company to Georgia at taxpayer expense is an outrage,’ said state Sen. Jon Husted.
Added U.S. Rep. Pat Tiberi, R-Columbus: “Federal stimulus money is being used to create winners and losers among workers in different states and that’s just not right; it’s dirty.”
All I can say to both parties is that’s what you get for building an imperial city on the Potomac and spending the last few decades destroying the constitutional principle of federalism. As I’ve described in this study, regional warfare over federal subsidies has escalated in recent years. It’s horribly wasteful, and it’s getting worse.
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