A Beltarian Examines the Obama "Jobs" Plan

Run Paul-hater, and featured speaker at Koch-funded events, Megan McArdle breaks down the Obama speech and tells us (My comments in italics):

I think that it's generally solid on the spending/tax cut side. The targeted employment stuff is basically a decent plan--we should be aggressively looking for ways to keep the long term unemployed from turning into the permanently unemployed...  

The "targeted employment stuff" is a nutty plan which will nudge employers to hire people only after they have been out of work for 6 months or cause potential hires not out of work at least 6 months to work for $4,000  less than employees who have been out of work for six months, since for all practical purposes long-term unemployed walk in with a $4,000 government check if they are hired.

The infrastructure stuff will be fine, if we choose good projects...

The infrastructure program is a bankster-union joint operation scam. (More here.)

The direct assistance stuff is a little bit mixed: yes to unemployment insurance extension, meh on maintaining government payrolls...

Extension of unemployment is simply paying people not to work. Further with Obama's plan to pay employers who hire long-term unemployed, it sets up a governmnet created tug of war between long term unemployed and employers. Totally insane.

With Belltarians like this, who needs Marxists?

The Greatest Economic Apologist for Big Government Spending--Since Keynes Himself

Reuters columnist David Callahan is hyping the economic models coming out of Moody's by Mark Zandi, which attempt to show some voodoo magic that occurs because of government spending:

Just last month, for example, the chief economist for Moody’s Analytics Mark Zandi released an analysis of stimulus measures work. Zandi advised John McCain in 2008 and is anything but a committed liberal. But his study, supported by the full weight of Moody’s modeling expertise, clearly shows that spending is the best form of stimulus.

Is Callahan serious? Zandi has been the biggest apologist for every move President Obama has made outside the bathroom. And just what the hell is this "full weight of Moody’s modeling expertise" about? Last I recall, Moody's failed to detect the housing boom and had no clue the subprime paper they were rating was toxic.

Moody's models are nothing but econometric mumbo jumbo. Here's more from Callahan about Moody's models:

The single most effective form of stimulus, the study found, are increased outlays for food stamps — which create $1.71 in economic activity for each dollar in federal spending. The other top two boosters are spending on unemployment benefits and infrastructure. Earlier studies, including by the Congressional Budget Office, have found largely the same thing.

First and foremost, it is savings-investment that causes an economy to grow, through the production of more goods and services. Markets clear. If there are consumer products out there, they will be purchased (See Rothbard on J.B. Say). Directing spending through government does not create some magical boost to the economy. It takes money from some and gives it to others. Food stamps and unemployment benefits stagnate an economy because they provide incentive for people to stay home and not work. Houdini was much more straight forward than Zandi. The Amazing Zandi is quickly becoming the greatest apologist for government spending since Keynes. Paul Krugman and Robert Reich eat your heart out.

In Focus: The Infrastructure Bankster Scam

Below is a Reuters featured Mainstream Insider overview video of a proposed infrastructure bank that is being pumped in Congress. It does not mention the banksters pushing the proposal.

Only in the Reuters text following the video is there a hint of the bankster role (my emphasis)

When you read the congressional testimony and materials about the proposed bank you always hear about the vast sums of private money waiting in the wings to be invested. When Robert Wolf, Chairman and CEO of UBS Americas and close confidant of President Obama, testified to the Senate Banking Committee last year he said:

Preqin, a private equity industry consultant, estimates that there is over $180 billion dollars of private equity and pension fund capital focused on infrastructure equity investments. This capital can play an important role in bridging state and local budget gaps.

There is no question that private money is interested in being used for loans to infrastructure projects and guaranteed by the federal government and taxpayers. It’s almost identical to senior bondholders who loaned money to too-big-to-fail banks. It’s the best setup for private money because there is no loss.

Looks Like Republicans Will Be in on the Infrastructure Scam

House Majority Leader Eric Cantor just tweeted:

Infrastructure investments is an area where we should work together it is important for our country's roads and bridges to be in good repair.

He, however, did not tweet about the role Wall Street investment banks will have in collecting huge fees as a result of every dime directed toward "infrastructure investment".  Nor did he report that it is investment banks at the forefront of the push for "infrastructure investments",  led by Robert Wolf, Chairman of UBS Americas and President of UBS Investment Bank.  

Obama Stay Away: The Private Sector Employment Picture is Just Fine (and improving)

There's no need for President Obama to do anything. As Ed Yardeni points out , private sector payrolls bottomed in February 2010. They are up 2.4 million over during the 18-month period since then. Over the same period of the previous recovery, private sector employment rose 2.5 million.

The Obama jobs/infrastructure program is a scam to expand government and pour money into the pockets of banksters and union leaders. Jobs being lost now are at the state and local government level. These people should be employed in the private sector anyway, where they will meet consumer demand versus government bureaucratic paper shuffling and the suffocation of the private sector.



Chart via Yardeni.com

From Ed Yardeni:

The pace of hiring could actually improve in coming months. The Monster Employment Index rose 3 points in August to 147, the highest reading since October 2008. Last month’s advance was led by increases in natural resources, healthcare, and retail trade. The following industries were at cyclical highs during August: manufacturing, construction, transportation & warehousing, retail, information, educational services, and healthcare & social assistance.

President Signals the Infrastructure Scam is Coming

WSJ reports:

President Barack Obama signaled Monday he'll propose a major infrastructure program and an extension of a payroll tax break in the jobs speech he planned to deliver Thursday before a joint session of Congress.

In an animated Labor Day talk before an enthusiastic crowd of union members in Detroit, Mr. Obama, who has been battered by low poll numbers and a sense that he's been unable to recharge the economy, sought to seize the initiative at the outset of a week in which both parties will focus heavily on job-creation ideas.

"We've got roads and bridges across this country that need to be rebuilt," Mr. Obama said. "We've got private companies with the equipment and manpower to do the building. We've got more than one million unemployed construction workers ready to get dirty right now."

As I have been pointing out since early last month, the infrastructure scam is about helping unions and, especially, banksters.

The key words, jobs and infrastructure, poll well and Obama is going to use those loaded terms to shovel more money through the banksters. Obama's new buddy, Robert Wolf, Chairman of UBS Americas and President of UBS Investment Bank, is stick handling the details for the banksters, and Obama is all in.

It will be trillions more wasted, with a good chunk not getting past the banksters.

How Obama Is Going to Sucker Everyone in to Expand the Government by Using the "Jobs Problem"

I have already pointed out that most of current new unemployment is coming from the government sector (see here and here), especially the state and local level. This is a good thing. Government is not about reacting to consumer desires, and thus all government spending should be considered waste. Sadly, however, it is librarians rather than government police state goons that are being laid off.

That said, there are a lot of talking heads out there chattering about the current unemployment situation as a major problem. This is bad focus.The new unemployment is coming from the right place and it would be great if it continues in this sector.

Paul Krugman takes a look at this situation from the government spending angle and points to the declining government spending:

Do the dismal economic numbers really reflect the turn to fiscal austerity? I keep hearing people say no, because austerity hasn’t actually happened yet in America. But they’re wrong.

The fact is that the fading out of the stimulus, and in particular of aid to state and local governments, is already and noticeably leading to substantial withdrawal of government demand. Look, in particular, at actual government purchases of goods and services — governments at all levels buying stuff — which is what standard macroeconomics says should have the highest multiplier, since unlike transfers and tax cuts it is by definition spent rather than saved. Here’s the picture, showing changes in real spending over the previous year:

Krugman, naturally, then goes on to see this as a sorry state, while I see it as a positive.

So then you ask, how is the deficit growing if government spending is shrinking? It's the growth in entitlement payments, interest payments and, during various quarters, loans and "investments" made to the banksters.

The current focus on unemployment, as a negative, is a trap. Private sector unemployment has stabilized and is starting to climb. This is a positive Jobs are being now lost where they should be, in the government sector.

The last thing that's ever needed is a government jobs program, but especially now. When President Obama goes to the air waves on September 8, he will be using the buzz words that poll well, jobs and infrastructure, to propose expanded government reach even further. It will be for the direct benefit of union leaders and banksters.

It will be a waste of billions upon billions of dollars. As for the decline in government growth at the state and local levels, sadly that will reverse. Ben Bernanke's money printing will eventually result in individuals and corporations ending up in higher state and local tax brackets. It will result in more revenue to state and local governments, but instead of hiring back the librarians, what is likely to happen is that more goons will be hired to keep us all in line.

President Obama will use the current minor shrinking of state and local governments to scare the bejesus out of the country into thinking all employment is dropping. He will then use the fear as a way to grow the federal government even more, which will turn the economy into more of a mess.

Bankster Push Behind U.S. Chamber of Commerce Pro-Infrastructure Stance

Friends tell me that the U.S. Chamber of Commerce has formed various programs/groups to generate more revenue for the Chamber.

The various programs/groups then push their specific agendas at the Chamber. The pro-government spending infrastructure stance by the Chamber is not because of construction/engineering firms pushing the idea (although they are going along with it). The push is coming from the banksters, who have made enough  contributions to the Chamber program/group, Center for Capital Markets Competitiveness, to control it.

The banksters, led by UBS Groups America Chairman Robert Wolf, are the real players pushing the infrastructure deal. It's all about big $$$$. The banksters will be the major beneficiaries of any Federal infrastructure plan.

Democrats will be solidly behind the bill and friends tell me that there could be enough Republican support that an infrastructure bill will pass.

The Coming Infrastructure Bank as an Off-Balance Sheet Scam

WSJ explains what the Infrastructure Bank scam will be all about:

Here's a novel idea: Have Congress create a "bank" that could borrow huge sums with only a small federal outlay and would be independent of any political interference. If you believe in this miracle, you probably thought Fannie Mae was a private company that wouldn't cost taxpayers a dime.

We're referring to Washington's latest marketing tool to sell spending to a skeptical public, a new federal "infrastructure bank." For the low, low price of $30 billion or so, President Obama says Congress can conjure hundreds of billions in new "grants and loans" to rebuild "roads, bridges, and ports and broadband lines and smart grids."

He says the bank would put "all those construction workers" back to work and "be good for the economy not just for next year or the year after that, but for the next 20 or 30 years." In a cats and dogs living together moment, the Chamber of Commerce and the AFL-CIO are both in favor. Since both unions and construction companies would be beneficiaries, this alone ought to give taxpayers pause.

This is the Fannie Mae model applied to public works. The new bank would be a government-sponsored enterprise, or GSE, whether or not anyone admits it. The bank would have an implicit subsidy for its debt because it is backed by the government. And the debt it issued would be "off-budget," which means it wouldn't show up in annual outlays. When she first proposed the concept in 2008, Connecticut Democrat Rosa DeLauro explicitly described the bank as a "public private partnership like Fannie Mae."

Such an outfit will inevitably be politicized, as similar examples have been all over the world. Japan's postal bank has been used for decades to finance public works. Japan's roads and bridges are grand but its economy has grown little in 20 years. Agribanks, regional development banks, Brazil's BNDES national bank have all become vehicles for the political allocation of credit.

Note the support of  this monstrosity by the Chamber of Commerce. Never mix up the CC with limited government, when the money flows inward to CC members the CC has no problem with government spending and scamming.