Why Alan Grayson is Right on a Federal Jobs Program

Alan Grayson will not go quietly into the night. Grayson makes an argument that instead of the federal governmenmt losing $100 billion-a-year by extending the Bush tax cuts for top earners. The $100 billion could be used for a jobs program. Franklin Delano Roosevelt's jobs program was able to put 4 million people to work in two months. Obama's stimulus idea of throwing money at the private sector was the economic equivalent. Obama is a neoliberal. He wanted money thrown at private contractors for the same reason public dollars is thrown at the health insurance industry. Obama and other neoliberals eject the achievements of the New Deal and Great Society.

If Obama studied history he would have understood FDR through the Public Works Administration.

The Public Works Administration (PWA) was a New Deal agency in the United States headed by Secretary of the Interior Harold L. Ickes. It was created by the National Industrial Recovery Act in June 1933 in response to the Great Depression. It concentrated on the construction of large-scale public works such as dams and bridges, with the goal of providing employment, stabilizing purchasing power, and contributing to a revival of American industry. Most of the spending came in two waves in 1933-35, and again in 1938. The PWA was closed down in 1939.

It is much easier to have the federal government directly hire people for federal projects. Obama could have politically and factually said that Roosevelt's jobs program was successful. Obama's neoliberal ideology could not support a federal jobs program; in the same manner Obama refused to back universal health care. Obama believes in a hybrid of government and private partnerships. Obama in closer to Jeb Bush than Alan Grayson. Personally, I think Obama is politically cautious and never gave the merits of the stimulus v. a jobs program any thought.

Rick Scott's Stimulus Hypocrisy

Rick Scott has constantly attacked the stimulus and has attempted to make bizarre connections between Alex Sink and federal programs she was not involved with.

“Obama liberal Alex Sink is sending her union allies to attack me for opposing the failed stimulus program, but it just shows voters what is at stake in this election,” said Scott on Monday. “Our country has lost 3.29 million jobs since President Obama flushed away a trillion dollars - and Alex Sink said she supports President Obama's policies to fix our economy. The Democrats promised that after spending all that money, the unemployment rate wouldn’t reach over 8 percent; it is now 11.6 percent in Florida and 9.6 percent nationally. Sink and her liberal allies have saddled our children and grandchildren with debt and created no jobs. I have a plan to cut taxes and regulations to turn Florida around and create 700,000 private sector jobs in this state.”

Scott told Real Clear Politics the stimulus "does not work."

SCOTT: Absolutely not. I think stimulus money is an absolute mistake. There's no free money in those stimulus dollars. We're going to have to pay those dollars back whether we pay it back, our children pay it back, our grandchildren pay it back. Stimulus does not work.

So it should come as no suprise a company Scott is a shareholder in excepted stimulus money.

Scott owns 3.44 million shares of XFONE stock. XFONE received $63 million in loans and grants.

This week, the U.S. Department of Agriculture announced that an XFONE subsidiary called Pride Network Inc. in Louisiana had been awarded another $36.1 million in loans and grants to build a fiber-optic network in three parishes there. The funding is coming from a $518-million piece of the American Recovery and Reinvestment Act – the stimulus bill.

The department press release notes that "the project will benefit approximately 25,000 residents, 3,000 businesses and about 200 community facilities. The company estimates the project will create 1,300 jobs."

I am not even surprised by Scott's hypocrisy. I would be shock if Scott actually stood for something on principle. Does a man who had to use his fifth amendment rights 75 times during a deposition have principles to stand behind?

Eating words is Rich

Frank Rich, 2/14/2009:

The G.O.P. doesn’t recognize that it emerged from the stimulus battle even worse off than when it started. That obliviousness gives the president the opening to win more ambitious policy victories than last week’s. Having checked the box on attempted bipartisanship, Obama can now move in for the kill.

Frank Rich, 9/12/2010:

NO, he can’t. President Obama can’t reverse the unemployment numbers by Election Day. He can’t get even a modest new stimulus bill past the Party of No, and even if he could, there would be few jobs to show for it until (maybe) 2011. Nor can he rewrite the history of his administration. Its signal accomplishments to date are an initial stimulus package that was overrun by the calamity at hand and a marathon health care battle as yet better known for its unseemly orgy of backroom wrangling than its concrete results. While that brawl raged, the White House seemed indifferent to the mounting number of Americans being tossed onto the Great Recession scrapheap.

Oh Frank, Frank, Frank...

Fox News Makes Case For Stimulus

Shepard Smith and Juan Williams make interesting points about how the stimulus has helped save America from a depression. Williams agrees with Smith that the White House political team has been unable to promote their own economic policies. The first reason for that is the economy is still bad. The second factor is Team Obama is more concerned with attacking their base then defending themselves against right-wing attacks. It is sad when Fox News can makes a batter case for Obama's economic policies than Robert Gibbs and Tim Geithner.

Half A Loaf

Use cars salesmen and Henry Kissinger both know when going into negotiations the best tactic is to give an inflated high offer. The other side will attempt barter down the offer. The person making the offer gets most of the concessions he originally wanted. The Obama administration's idea is to start with half-a-loaf and then let everyone saw the loaf to pieces. Case in point is the stimulus.

Romer had run simulations of the effects of stimulus packages of varying sizes: six hundred billion dollars, eight hundred billion dollars, and $1.2 trillion. The best estimate for the output gap was some two trillion dollars over 2009 and 2010. Because of the multiplier effect, filling that gap didn’t require two trillion dollars of government spending, but Romer’s analysis, deeply informed by her work on the Depression, suggested that the package should probably be more than $1.2 trillion. The memo to Obama, however, detailed only two packages: a five-hundred-and-fifty-billion-dollar stimulus and an eight-hundred-and-ninety-billion-dollar stimulus. Summers did not include Romer’s $1.2-trillion projection.

The Obama administration ends up with a stimulus too small to achieve all of their policy goals. The White House feared being labeled tax and spenders. Obama cut middle class taxes and pushed a smaller stimulus to stop a potential depression. The result was being labeled a socialist.

Other result about the White House internal stimulus debate is Obama continues to listen to Lawrence Summers. The latter assured Obama to go after the smallest stimulus possible and stressed how this will keep unemployment under 10 percent. This is a perfect example of the blind leading the blind. The stimulus was needed but the one backed by Obama was too small.

Update: E.D. Kain has a good post on why the stimulus is was too small. I agnostic on his proposal on the federal government taking over Medicaid from the states. Kain's proposal would mean state governments would no longer fund Medicaid.

Quote of the Day

"Now, government can't create jobs, but it can help create the conditions for small businesses to grow and thrive and hire more workers."

President Barack Obama, arguing against his own stimulus program.

What does Obama expect to gain by using Republican talking points is beyond me. I noted that RNC Chairman Michael Steele used this talking point. Apparently, Steele was under the false impression that the private sector created Steele's job as Maryland's Lt. Governor. Police officers, military personal, fire fighters, Congressional staffers must also be part of an imaginary private sector that creates government jobs.

The White House released a report on jobs created by the stimulus by Congressional district. The problem is the economy is growing too slow to create enough jobs to make a serious dent in unemployment. The GNP is slowing down from it's peak during late 2009. The current jobless rate is 9.5 percent. Employers are still fearful of hiring.

Stimulus Numbers from Mark Zandi

Mark Zandi of Moody's what gets the best return for stimulus dollars. To people who have followed the economics of the stimulus bill it will not be surprising that food stamps give the best return. Work programs, unemployment benefits and infrastructure spending came in next. For every government dollar spent over a $1.50 goes the GDP. Every dollar from the Bush tax cuts and a potential cut in the corporate tax rate would not bring back 50 cents.

Zandi gave the numbers in his testimony to the Senate Finance Committee.

Food Stamps - 1.74
Work-Share Programs - 1.69
Extending Unemployment Benefits - 1.61
Increased Infrastrcture Spending - 1.57
General Aid to State Governments - 1.41

Meek Strikes Crist

Kendrick Meek makes some pointed attacks at Gov. Charlie Crist. Meek notes Crist's flip flop on the stimulus package.

"I've been consistent on the stimulus," he said, noting that it has prevented layoffs of teachers and state workers and has stemmed drastic state budget cuts.

Crist denied, to Fox-13 reporter Chris Chmura, supporting any stimulus bill. Crist, along with several other governors, signed a letter endorsing a stimulus bill.

""I didn't endorse it," Crist told Wolf Blitzer. "I didn't even have a vote on the darned thing."

Crist is now attempted to stand tough on backing the stimulus. His rhetoric rings hollow.

"Some people criticize me for going down to Fort Myers, being nice to the president of the United States of America. I do not apologize for it and I never will," Crist said.

Another point Meek attacked Crist on was the amount of days the Governor has taken off work.

We know about the governor's past as it relates to his schedule and his one-meeting days," he said. "I'm going to work every day. I'm going to be one of the hardest-working senators. ... I have one of the highest voting records, 98 percent."

The Orlando Sentinel found, in two years, Crist took off 62 weekdays. Could you imagine taking that much time off and not getting fired from your job?

Crist's Stimulus Flip Flop

"I didn't endorse it. I -- you know, I didn't even have a vote on the darned thing. But I understood that it was going to pass and I wanted to be able to utilize it for the benefit of my fellow Floridians."

Gov. Charlie Crist, telling Wolf Blitzer he did not endorse the stimulus package.

The Pultizer Prize-winning Politifact gave Crist's claim a pants on fire rating. Crist missed a cabinet meeting to stand onstage with Obama and advocate his support of the stimulus package.



Charlie Crist: "It's getting harder everyday and we know it's important that we pass this stimulus package. It is important that we do so to help education. To help our infrastructure and to help health care for those who need it the most."

Other instances Crist touted his support of the stimulus package.

From Hardball with Chris Matthews on Feb. 3: Speaking of the stimulus, Crist said, "It's going to help (Floridians') children. It's going to help their traffic situation. It's going to help produce more jobs here in the Sunshine State. That's a perspective that I have to have as, in essence, the CEO of Florida. And that's why I support it."

From Time on Feb. 10: "I see this package as a pragmatic, commonsense opportunity to move forward. I didn't campaign for Obama, we don't agree on everything, but he's my president, and my job is to help Florida stay in the black."

From Meet the Press on Feb. 22: Q: Why would you buck your own party, which did not vote for this plan in Congress, as you know, to support the stimulus?

Crist: "It's not a matter of bucking the party, it's a matter of helping the people. I mean, I really view it as an issue of what can I do that's best for the people of Florida? We've got almost 20 million people that live in the Sunshine State now. I think my obligation is in essence the CEO of the state, to do everything I can to help us get through this tough economy. Certainly this stimulus package, about $12.2 billion to Florida, will help Florida an awful lot."

Crist needs to find a spine or he will lose. The worst thing to do in politics in do complete 180 turns. It didn't work for Mitt Romney and he won't work for Crist.

Update: White House Press Sec. Robert Gibbs said Crist supported the stimulus package.

"I think he was very supportive of the legislation and supportive of the benefits that it would have and has had for the state of Florida in seeing positive economic growth," Gibbs said. "I would say yes, yes."

I wonder if the White House views Marco Rubio as the candidate Kendrick Meek has the best chance beating.

Why the Stimulus Was Important

Economist Mark Zandi of Moody's Economy.com testified to the Joint Economic Committee. Zandi said the stimulus spending saved the economy.

The fiscal stimulus is also working. The American Recovery and Reinvestment Act passed early this year has reduced payroll tax withholding, sent checks to Social Security recipients, and provided financial help to unemployed workers whose normal benefits have run out. The cash for clunkers program revved up vehicle sales, and the housing tax credit has boosted home purchases.iii It is no coincidence that the Great Recession ended just as the stimulus began providing its maximum economic benefit (see Chart 1).iv The stimulus is doing what it was supposed to do: short-circuit the recession and spur recovery.

Zandi and New York Times columnist Paul Krugman note jobs are not coming back. Krugman makes the case for more stimulus spending. Krugman stresses the need for more stimulus spending.

Suppose that the economy were to keep growing at 3.5 percent. If that happened, unemployment would eventually start falling — but very, very slowly. The experience of the Clinton era, when the economy grew at an average rate of 3.7 percent for eight years (did you know that?) suggests that at current growth rates we’d be lucky to see the unemployment rate fall by half a percentage point per year, meaning that it would take a decade to return to something like full employment.

Companies are scared to hire. Small businesses are not getting loans from banks. Cunsumers are spending less. The Federal Reserve offering zero percent interest has not been able to kick start the economy. The current economic climate is not creating jobs. Zandi testified that 17 percent of the workforce is unemployed or underemployed. America is on economic life support. The conservative answer is less spending and to let businesses fail. Gleen Beck and Conservative Party candidate Doug Hoffman propose just that.

GLENN: Well, let's just use GM because everybody knows it.

HOFFMAN: Right.

GLENN: They come to you and they say GM is going under. If we don't save it, we're going to lose all of these jobs. It's going to be an economic nightmare. As GM goes, so goes America, et cetera, et cetera, et cetera. And they give you a million great reasons for saving it. Do you step in and bail GM out?

HOFFMAN: I don't think so, Glenn. I think that's what's getting us into this problem. All the bailouts from last year, spending money that we don't have. And certainly we can't save every business in this country and if it was a small business, the small businesses generate over 80% of the jobs in the country. We can't save every small business.

GLENN: Now when you say I don't think so, because for me that answer is, no. What do you mean you don't think so? What would come to play where you would where that would change your mind?

HOFFMAN: Well, let me be more emphatic and agree with you. I would say no, absolutely. I don't think we should save mismanagement. We shouldn't save any corporations that can't effectively run in the free enterprise system.

GLENN: See, America, this is the passion that I think you are hearing.

Passion about economic illiteracy. Those corporations and small businesses Hoffman and Beck wouldn't save provide millions of jobs. Bush and Cheney implemented every Laffer Curve and trickle down theory conservatives held dear. The result was the worst economic meltdown since the depression. Conservatives should try taking a few economics classes before running for office.

Stimulus Dollars in 22nd District

Rep. Ron Klein has an interactive map of how stimulus dollars are being spent in the 22nd districts. Much of the money is being spent on Broward County Transit System, justice assistance grants and health services. My question is are tea baggers against public transportation, law enforcement and public health care? We already know the answer to the last item.

Why Isn't Crist Spending Stimulas Money

U.S. Bureau of Economic Analysis released a graph of the economic growth of all 50 states. Florida ranks in the lowest tier for growth. Last month, Florida's unemployment was at 12.2 percent. The state's unemployment is higher than the national average of 9.5 percent. Which brings up an interesting question. Why is Congress telling Gov. Charlie Crist to spend stimulus money faster?

In a letter to Florida Governor Charlie Crist, the committee's chairman, Rep. James Oberstar, wrote that as of June 30, Florida had begun construction on highway projects totaling only 2 percent of the $1.346 billion set aside for it in the American Recovery and Reinvestment Act.

"I strongly urge you to refocus your efforts to implement the Recovery Act and use the available funds to create and sustain family-wage jobs," said Oberstar, who heads the House of Representatives Transportation and Infrastructure Committee.

Crist was toying with the horrible idea of of private companies owning toll roads. Florida was considering privatizing roads to pay for new construction. The St. Petersburg Times editorial board pointed out the state could borrow money and run tolls cheaper than outsourcing to private contractors.

Florida is in an economic spiral and needs new roads. Crist crossed party lines to support the Recovery and Investment Act. Is Crist so focused on becoming Senator that he forgotten his role to as Governor?

Stimulus Money for Hillsborough County Homeless

Hillsborough County’s Affordable Housing Department will use $685,761 for housing the homeless.The stimulus money is from the Housing and Urban Development program Homelessness Prevention and Rapid Re-Housing Program. AHD plans to use nonprofit organizations for the program. My question is AHD using nonprofits to provide services or set up housing? Does anyone know what AHD plans to use the nonprofits for?

Quote of the Day

"I find that a little amusing. I have colleagues who have at least intimated that this money from Washington is not something they welcome with open arms, yet 49 of 50 show up to get it."

Charlie Crist, on fellow Republican governors claims of not wanting stimulus money.

The $5.4 trillion we'll pay if the stimulus package doesn't work

A major sticking point with the bailout discussion is cost. Republicans have blared endless about just how much a trillion dollars is -- a stack of $100 totaling a trillion could reach Pluto or something, go around the globe at the equator eight zillion times, etc. One facet of the stimulus package story that nobody is discussing, though, is how much the government will pay (with our money) if the package doesn't work. A cursory glance at the details of our country's budget problems makes $1 trillion look like a bargain.

Last month, Harper's Magazine had a cover story that I wish they would make available online because the link would go viral, and you would get better pictures of the graphs in it then crappy ones I take with my cell phone camera. Anyway, the story is titled "The $10 Trillion Hangover" and it details the money added to our national debt by the Bush administration. $10 trillion is actually a conservative estimate -- the debt could balloon to $13-15 trillion. Why? Ask Freddie and Fannie.

I made a photocopy of the article (and went at it with a highlighter, which I may not have done if I knew I would post a photo of it online in the future), and to your right is a crappy picture I took showing one part of one graph in the article -- the mortgage back securities debt part. The full graph itself is called "The Bill" and it succulently details all the debt added to the government over the past eight years. Now the graph attributes $.1.6 trillion to the government taking over Fannie and Freddie, but that's a low estimate. This blurb from the article shows why the mortgage debt is a real wild card:

When the federal government took over these failing residential mortgage giants, it also assumed their $5.4 trillion in mortgage-backed securities and outstanding debt.

Cutting straight to the point, that $1.6 trillion the government is responsible for now will balloon -- potentially to $5.4 trillion -- depending on the amount of home foreclosures in the future. Those are costs the government will have to account for. And whose money will they use? You guessed it, yours.

This makes current discussions on the cost of the stimulus bill silly. $1 trillion? Pshaw! Try $5.4 trillion if the stimulus bill doesn't work. A trillion has now become pocket change.

The choice for the Obama administration is simple: get real stimulus done. If this means hopping off the bipartisan pony ride and even, if necessary, brutally bludgeoning that pony to death, do it -- or we all suffer the consequences. And what are those consequences? It could be a repeat of the 1930s... Do you want to find out? You shouldn't. I certainly don't.