Wednesday, November 26, 2008

political animal or economic dunce?

It's good politics to exploit false-cause fallacies. For example, if I do X which seems connected to the economy and then the economy emerges from a recession, then I can take credit for fixing the economy.

It's bad economics to imagine that government can create jobs by taking money from X and giving it to Y. Of course, this creates jobs in Y's sector but destroys at least as much activity in X's sector. On net, this is a "shell game". (The exception to this is spending on "good/efficient" infrastructure-- as opposed to a "road/bridge to nowhere". But even so-- philosophically, constitutionally and practically-- the infrastructure spending should be handled by state and local govts unless the project is interstate by nature.) Unfortunately, this assumption is at the core of Bush, Congressional, and soon-Obama efforts to "fix the economy".

Here's the AP's Will Lester in the C-J with the editor-chosen headline, "Obama: Goal is 2.5 million jobs by 2011".

President-elect Barack Obama promoted an economic plan yesterday he said would provide 2.5 million jobs by rebuilding roads and bridges and modernizing schools while developing alternative energy sources and more efficient cars.

Mandating more efficient cars and subsidizing alternative energy are net job killers by definition. Again, infrastructure might be ideal-- if efficient and should be provided by the federal govt.

"These aren't just steps to pull ourselves out of this immediate crisis. These are the long-term investments in our economic future that have been ignored for far too long," Obama said in the weekly Democratic radio address....

While he's focusing on the long-term benefits of these "investments", perhaps he'd have the political courage and economic integrity to talk about the costs-- short-term and long-term? Naaahhh...

The president-elect said he has asked his economic advisers to flesh out the recovery plan -- one "big enough to meet the challenges we face. ... We'll be working out the details in the weeks ahead, but it will be a two-year, nationwide effort to jump-start job creation in America and lay the foundation for a strong and growing economy."

Obama's radio address talked about the goal of job creation and said his economic plan "will mean 2.5 million more jobs by January of 2011." Obama spokesman Robert Gibbs confirmed later yesterday that the plan "will save and create" the 2.5 million jobs....

So, is Obama a political animal, an economic dunce, or both?

In a slap at President George W. Bush, Reid added, "We will soon finally have a leader and partner in the White House who recognizes the urgency with which we must turn around our economy, and I look forward to working with him and the new Congress."...

Is Reid a political animal, an economic dunce, a partisan hack, a jerk, or all of the above? Can you imagine anyone doing something more forceful than Bush on these bailouts (to his detriment)! How can Reid complain about all of the things he's gone along with?

"We'll put people back to work rebuilding our crumbling roads and bridges, modernizing schools that are failing our children..."

Vouchers, charter schools, etc.-- you know, add a little competition-- or just more spending?

Greg Wetstone, director of government and public affairs for the American Wind Energy Association, applauded Obama's plans to expand alternative energy resources and called it a "concept very much branded in reality."

No comment except to say that Wetstone made me laugh out loud...


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