If you drive down North Avenue, Cross Highway, Long Lots or Roseville — and who doesn’t? — you know what’s coming.
If you don’t, you should.
A 5-week milling and paving project has already commenced. With lane closures, rough road surfaces and big machines stopping traffic in both directions, the period from now through Thanksgiving will be frustrating for commuters, school buses, parent and teenage drivers, residents, delivery people and anyone else using these major thoroughfares.
If you’re a normal person or “06880,” you ask: Why wasn’t this done during the summer?
The answer is that the $1.2 million cost comes from the recent stimulus package. The funds were applied for months ago. Approval finally came through — after the summer — with the stipulation that it be done by December 31.
Okay. God and government work in mysterious ways.
But it should be noted that at least some of the project would be unnecessary if the job had been done right the first time, 2 summers ago.
North Avenue, last March.
Why is there a stipulation that it has to be done by Dec. 31st? Why not wait until next summer, when they can have more leeway and less of an inconvenience for everyone? And yes, the job should have been done right the first time.
Because the idea behind the stimulus is to stimulate the economy. If you don’t do it __NOW__ then what’s the point? Poor traffic patterns take a back seat to ejecting the money into the economy. The deadline to get it done by Dec. 31 ensures that the money is spent and not hoarded.
There was no stimulus from the $800 billion pork barrel. If you take money from the private sector and spend it in the public, the net impact of government spending on economic activity is negative. not positive. It does not matter when the money is spent. The feds wanted funds spent in time to help lower unemployment from 9.6% prior to this election. This sort of intiative did not work for FDR, and it is not working for Obama.
“If you take money from the private sector and spend it in the public, the net impact of government spending on economic activity is negative. not positive.”
Please know that Bank of America, CITI & GE paid $0 in taxes last year. Google has ducked about $3.1 billion in taxes in the last three years thanks to something called a Dutch Sandwich. So, I’m not sure what you’re talking about — there’s three examples of taking $0 out of the private sector.
Huh! To finance spending the government either borrows or collects taxes, those are the only two choices it has. In either case it is taking money from the private sector and moving it to the public sector, buy creating no new increase in economic activity. There is no toothfairy and there is no free lunch. You might have mentioned Charlie Rangel and Tim Geithner as well; except in their cases their behavior was illegal.
“buy creating no new increase in economic activity”????!
No new economic activity? Have you listened to any economic report lately? Sorry, but I choose a drivable road and an employed worker over ‘companies hoarding cash’ any day. Even if it means borrow the money now and tax the corporations later. Someone has to explain to me why bailing out a bank that remits $0 in taxes is okay, when paving a road that in turn generates a long tail of taxable revenue isn’t.
If your position is that the road doesn’t need resurfacing, then drive it. But the idea that money spent on paving a road isn’t “new economic activity” is laughable — especially when the money is borrowed.
Were you going to pay for the repaving? Was someone else in the private sector? It’s like you fail to understand that __ANYTIME__ a public road has been paved since the Roman Empire it has been done by the public sector.
When the money is spent an unemployed individual — or hopefully 10 — will return to work, be able to come off food stamps, earn a taxable income, purchase a product or service and the economy will spiral up. You’re only proof that a Republican’s concept of indirect cause and effect is limited to trickle-down economics. Why can’t the government be the one doing the trickling?
Don’t forget the the Obama administration has already created more private sector jobs than the Bush administration did in 8 years.
Maybe you need to see this: http://www.talkingpointsmemo.com/images/docpage-recoverystats1.jpg
The road does not create taxable revenue. It is not a toll road. Obama has not created one new job. He has moved jobs from the private sector to the public, but has not created one new job. The economy is growing at about 2% or less, the slowest economic recovery sind WW II. After the road is paved, the workers will be unemployed and the government will be $1.2 million deeper in debt. My argument is sustainable, it is simply a matter of double entry bookkeeping. The money to pave the road did not come from the toothfairy. FDR’s own secretary of the treasury stated before Congress that government spending does not create new jobs. You are a bit late getting the message. One of the problems with Obama is that he has no concept of how to do a general equilibrium analysis and evidently neither do his supporters
Your data are a bit off. In January 2001, there were 132,469,000 non-farm private sector jobs. In January 2009, there were 133,459,000 non-farm private sector jobs. Now there are 130,201,000 non-farm private sector jobs. So Obama has lost private sector jobs and Bush added a few. Facts are inconvenient some times. Don’t drink too much Kool Aid.
And you are dead wrong on the job paving matter. During the early history the Republic there were many privately owned roads. You should try and get at least some facts right. In fact, right now in Westport there are private roads paved by their owners. Imagine that!
Can’t we just get our money back? Why spend it on yet another flawed make work government boondoggle?
Why is it the government’s fault when the original contractor did a bad job???
Who hired the first contractor?
Low bid. SOP.
Not very smart. The specs need to be met. If the specs are wrong, then the low bid is a misleading variable.
The specs may have been met but the workmanship was lousy.
Where is the warranty???
Rick: If you don’t ask for a warranty, you don’t get one. Did the ruling class ask for a Warranty?
Dan, do you know if there is anyway of getting an estimated schedule of the locations being done and when. They use to know when Peter’s Bridge would be closed. Thank you for the heads up.
This is from the official town website: http://www.westportct.gov/news/pavement2010.htm
It’s a bit vague — the map shows “affected construction areas” for October 20 (today). Not sure if it’s updated daily — if so, that would be nice!
Two years ago, our local tax dollars paid for the North Ave. and Roseville Rd. paving. The results were a dog’s breakfast. Now our federal tax dollars are paying for paving again. Word is that the original contractor did exactly what the Town specified. Joseloff first claimed that the contractor was going to pay for the re-do. Then he claimed that the contractor was giving the Town a credit for the botched job. Now the Town is patting itself on its back for acquiring the Federal funds. And the taxpayers continue to bear the burden of government incompetence.
I’m just thankful that Roseville & North Avenue are finally going to be fixed.
I hope this job gets regular asphalt and not the granulated stuff they put on Ford Road and Lyons Plains. Not only does that crud mess up your car while the work occurs, it’s very loud to drive on — and already crumbling in places (like near the bottom of the hill on Ford). Winter should be interesting on that side of town.
Being thankful for fixing a “dog’s dinner/breakfast” isn’t really enough. We’ve paid for it – twice, not to mention the experience of driving over that mess after the first repaving. I had read similarly, that the first job was done as asked – whoever asked for that type of paving made a BIG mistake – with our money!
And there are other street in town with the same type of third rate paving!
Oh, the constant whining is becoming deafening. Immediate potholes. Burned trees. Inconvenience with detours. Screwups. Lies. Double payment. Dog’s breakfast and dinner. Welcome to America. Perhaps Phil Gramm was correct: we have become a nation of whiners. I wonder if the troops gripe about the roads in Afgantistan?? I believe they have Hummers too.
You forgot – The Rent Is Too DAMN High!
Maybe we have become a nation lead by nitwits. The People’s Republic of Jeseloff is no exception.
Okay, I’ll bite: what is “dog’s breakfast/dinner”?
Oh, okay, I just looked it up. Urban Dictionary says it means a complete mess
http://www.urbandictionary.com/define.php?term=dog's+breakfast
I’ve never heard the phrase “dog’s breakfast” either. Cat’s pajamas, sure, but dog’s breakfast … nope.
🙂
Or “dog doo”, “dog day afternoons”, “dog bone”, “dog tired”, “dog breath”, “dogleg” “dogwood” “dog house” “dog eat dog”, “3 Dog Night” . . .
The “botched job” should be an issue but that was negotiated at a local level two years ago. The present job(s) involves federal funds. The Obama Stimulus involves 300+ billion for jobs/infrastructure contracts as well as 300+ billion for middle class tax cuts and another 300+ for entitlements. Those who only look to unemployment statistics to judge the Stimulus are being narrow-minded and uninformed.
Those who are uniformed are those who cannot do double entry bookkeeping. Government spending is merely a sub-optimal substitute for private sector spending, it represents no net increase in economic activity. FDR tried it, it did not work. What is the source of the money to fill the pork barrel? The toothfairy?
Because they are merely printing money to increase the activity. If you give a township certain funds to build a bridge, certainly there will be an increase in jobs and more money flowing into the economy. You are assuming that there is a finite amount of dollars. Not so. FDR did put more to work but was restricted by the gold standard. WWII saved his butt and ours.
The Treasury does not control the supply of dollars, the Fed does. The government either borrows the money or taxes it away from the private sector. In either case there is no net new jobs or an increaes in the money supply. FDR did not create one new job, net. He reduced employment in the private sector while he increased employment in the public sector. FDR did manage to shift the tax burden from the top decile of income to the bottom decile while spending billions of dollars , raising tax rates, and keeping unemployment close to 20%. FDR screwed the poor. After the road is paved, the workers wil be unemployed and the government will be yet another $1.2 million in debt. No sustainable economic growth will result; never has and never will. WWII saved nothing. After the 1938 election debacle, FDR’s own party shut down the New Deal, and econmic sanity returned.
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Fed or Uncle Sam. Still printing money to circulate. HOPE is the intangible, Jeffxs, that you are discounting. Didn’t you see “Seabiscuit”????
HOPE is what drives that crap game they Wall Street. Over 11,100 today.
That is 90 million voters who own stocks. Where is John Raho??
There is a huge difference between the Fed and the Treasury. Since the Treasury Accords of the 1950’s, the Fed is not obligated to buy the new debt issued by the Treasury, thus when the Treasury borrows, there is no net increase in the money supply unless the Fed chooses to buy the debt. If the Govt. taxes away dollars from the private sector, there is no increase in the money supply. If the actual stimulus flows from an increase in the money supply as you hypothesize, then there is no rationale for an increase in government spending or tax rate increases or government borrowing, just have helicopter Ben fly over one more time.
Hey Dude,
I’ve been tied up this week, but when I return from NYC this evening I may have some time to chime in and offer my ‘expert’ opinion. In the mean time I’ll let Jeffxs be my rep, I usually agree with him and he’s well informed (and writes more eloquently than me).
Believe me I really wanted to counter the claim from Stimulus above who claimed Obama created more jobs than Bush!
Of course I always enjoy your comments and often wonder what side of the issue du jour you may be on since you’re more of an independent thinker with a shoot from the hip style.
Okay, very interesting and I am listening. I believe you are saying that the only real stimulus or job creation must come from the private sector. And such will only be invigorated by tax advantages from the government or the Fed buying up Treasury notes. But private equity is investing in China at the present where their return on their investment is brighter. Why aren’t we making it more advantageous to invest here???
Capital will flow to where the return is highest. We are in the process of lowering returns and making them more uncertain. Not a good combination. The Fed cannot stimulate real growth in the long run.
It doesn’t seem that the private sector can stimulate growth either. They are too busy hording whatever they make instead of investing in jobs, equipment or research. Wonder why our economy is still stalled… blame it on the speculators The me first, screw everyone else attitude that is rampant in our economy and our society is finally coming back to bite us all where the sun don’t shine.
Accurate assessment. Our culture produced these greed mongers. Pray for the next generation, both in problems they face and maybe a change in priorities.
Companies are not investing because the outlook for taxes, regulations, and economic growth are extremely uncertain. FDR created the same situation in the 1930’s and corporations and individuals acted the same way as they are now, they hoarded cash. Why would anyone make long-term inverstments in the US in this environment? It seems to me that the truly greedy are those who want OPM.
Well its clear that deregulation isn’t the answer… thats got us where we are today. The amount of tax loopholes is stagering, and there are plenty of instances of companies with creative enough accountants to stave off any increases. Connecticut’s own home grown WWE is a prime example of that. So where does that leave us? A rock and hard place is my first guess. History has certainly repeated itself. The extravagant 20’s and its house of cards collapsed, just as the bountiful 90’s/2000’s came crashing down, and now we are left with the cleanup. The quickest buck is to be made outside of this country anyway… emerging markets is where its at. “Investment” will be hard to come by in this country regardless of all of those variables that you think is the problem.
What got us where we are is government regulation. The finnacial services industry is and has been among the most regulated of all industries. It was giovernment intervention in the marketplace (CRA, Fannie, Freddie, the Fed, etc.) that brought about the housing bubble and subsequent collapse. During the 1920’s unemployment was low and real growth was well above the long-term average, then the government raised taxes and tarriffs, and the Fed reduced the money supply by one-third. The largest of all tax loopholes is the exemption for employer provided benefits such as health insurance, pension funding, and other non-cash compensation. Want to do away with that exemption? BTW all of that government regulation is enforced by reprobates like Blumenthal who lies every time his lips move; Vietnam vet that he is. LMAO.
You got an angry electorate out there because the perception is that the fat cats got the bailout while the common dude got the shaft. No telling what they will do on the 2nd? I disagree with your explanation of the housing bubble burst. While the quasi-government entities pushed the mortgages, it was the traders who recklessly created credit default swaps and the like to cash in on the boom. AIG was stupid enough to insure them and then, bang. Without TARP, what would you have? 25% unemployment and a failed financial system. That being said, now regulation has swung to a different side of the pendulum and credit is so tight that the little guy can’t borrow to create jobs. Big business is borrowing like crazy at virtually 0 interest rates and sending the jobs overseas. I ain’t in love with Blumey (why would any one brag about being in Vietnam after Kerry??) but Linda is too much when seen kicking a dude in the crotch in middle ring.
Without subprime mortgages, there would have been no mortgage crisis; there may have been another crisis. The government demanded that there be subprime mortgages. Fannie and Freddie made the packaging and resale of NINJA loans acceptable; the indiot savants on Wall Street did the rest. TARP did nothing to lower unemployment in the long run, and now it is slowing down the recovery. TARP represents a destabilization of the credit market that has been postponed or delayed, but not avoided. Look at the price of gold. Look at the value of the dollar. Capital goes where the returns are highest; it knows no nationality. Blumey kicked you in the head. He is a chronic and habitual liar. We are a replacing a drunken nitwit, why send a liar?
It is my belief that TARP (not to be confused with the Stimulus) brought some stability to a faltering investment banking system. We seem to be stuck on one common thread: government. It is my perception that you believe that Uncle Sam has no business involving itself in the economics of our capitalistic society. Free market shall prevail. I disagree. I do think that regulation is needed and that, within certain limits, government should be a watchdog for the runaway capitalists. As Hoover said: “The problem with captitalism are the capitalists.” I think we both agree on the excesses and misdirection of the military as well as public education in this country.
As to our representatives, I tend to communicate with them from time to time and I can tell you that Dodd’s office may be the most efficient of any I have seen. Lieberman and Himes are terrible. Tom DeLay was mine for a time in Sugar Land and was unbelievably good. Blumey is a career politician. All these folks who blabber about going to D.C. and changing things are most often ineffective and silenced quickly, especially in the Senate. Better a liar then a loser Linda.
A few points.
The Dude is on point about where the buck stops in terms of the ultimate reason… it was the free market actions of entities such as AIG. He is also correct that this fantasy of the “free market” that Adam Smith planted in everybody’s head is just that… a fantasy. If we let things go, they would go to hell in a handbasket…. stat. No denying that.
Second, if you are going down the partisan road, lets remember the administration that allowed for all of this mess to occur with their “regulation” is of the same party as Linda is. And if the only issue we can find at hand about her opponent is a non relevant (though highly disgusting) issue about a war long ago… than i don’t find much fault in the guy. Linda on the other hand, like the good CEO that she was, was able to easily navigate her way through the “overbearing” tax structure… to evade taxes. Lets also not ignore the ethics issues as well. The amount of money she has spent on this campaign is utterly disgusting, its clear she is trying to buy the seat.
And as a political science student, the Dude is also spot on about the fact that as an outsider in Washington, she will be less influential and effective. There are multitudes of studies that show carrer politicans are more effective in actually getting something done, than an outsider with no connections, or political capital. I guess you can blame Jimmy Stewart for thinking that any joe schmoe can go in and change the congressional world overnight. Linda is ill prepared and would be a lame duck, and just like the rest of the “fiscal conservatives” she would be in name only.
Blumenthal is a practiced liar and utter fraud. Nothing he says can be believed. As someone said in other circumstances; every word he says is a lie including “and” and “the.” There have been virtually no new private sector jobs created in CT in the last 30 years. Career politicians (liars) like Blumenthal created the horrible track record. Do we need more career politicians like Charlie Rangel, and Maxine Waters, and Blumenthal in DC? If we are in a mess. they created it.
If we are going to move the discussion to the elections, here is a slight dose of reality to the “slash all spending” camp
http://www.nytimes.com/2010/10/20/us/politics/20spend.html?_r=1
WSPT’R: Thanks for the article. I don’t want to make this a Red Sox-Yankee squirmish because the country is polarized enough. The GOP did some good things when they took over the Congress in ’94 but seemingly lost their way after 911. They spent worse than any Democratic Congress. Since losing their majority in ’06, they have been the party of “no” and I don’t see any reason to put them back in power. The Tea Party candidates are a joke. My biggest complaint with Linda is her wacko hubby. But to close, I do believe that the only way to clean up Washington is to have elections funded by public money only. “Citizens United” be damned.
The Fed brought some stability to the banking system, not TARP. TARP was a huge mistake. The destabilization was a direct result of government interference with the capital markets: a sixty year-long effort to susbsidize investments in housing. You see a party of “no” because you believe mistakenly that government is part of the solution and not the root cause of the problem. Now the markets are reacting to the destabilizing government policies in much the same way they did in the 1930’s. Should we look for Obama to start an even bigger war? BTW the buck stops in the WH. Obama wanted the job, and now he can’t handle it; 9.6% unemployment, a $1.7 trillion deficit, less than 2% real growth, two wars, Gitmo is still open, his economic team is jumping ship, and his own party is running against him. Hillary is smiling.
If you think Jeff that all those things are HIS fault… I have a bridge to sell you in Brooklyn. Rome wasn’t built in a day, and a decade of failure can’t be fixed in two years. I don’t see how anything would have been better under McCain.
Obama said he would close Gitmo by the end of his first year in office. He did not. Obama’s economic team is jumping ship. Obama did state that if he got his $ 800 billion pork barrel unemployment would not go over 8%. They are now Obama’s wars and Obama’s economy. He wanted the job, so now he is accountable. By this time in his administration Ike had ended the fighting in Korea, it can be done.
Indeed, we agree on something. Hillary is smiling. And I thought her first appointment to the Supreme Court was going to be Barrack Obama. Perhaps it may still come true?
How can you appoint someone to the SCOTUS who will not allow his law school transcipt released?
He was first in his class at Harvard Law. You wanna see
what classes he took ??? I can tell you from experience
that law school has nothing to do with either the practice
of law or any subsequent endeavor.
How do you know he was first in his class anywhere without seeing a transcript? I thought you were smarter than to believe trhat sort of rubbish. But then, you did say you were backing Blumenthal, a man who lies with every breath. Moreover, where has Obama practiced law? Has he written even one journal article? He wrote not one article while supposedly editor of the Harvard Law Review. BTW Obama’s bio states (without any evidence) that he graduated magna and not summa. Ever hear of a number one who was not a summa?
Naw, I am not smarter than that. I can understand your
questionable attitude toward all politicians since from Reagan
to Bush ’43, all have lied their butts off about something. Bush ’41 may be an exception except taxes. But really, who cares what our President did at Harvard Law? Wanna see his birth certificate????
He did practice law in Chicago in the early mid-90’s as a civil rights lawyer. I know a guy who knew a guy, whose brother opposed him in court. Whether he published any journal articles seems irrevlant for I have published many legal treatises and hardly am at his level. I do it for the money. I do believe a magna could be first in a law school where grades are notoriously low. Blumney is the choice of two evils. I am a Vietnam Vet and not opposed to his lie. He actually has done some good things for Vets in Connecticut in the past. Whatever happened to the issues????
The issues? How can you know his position on the issues if he is a chronic liar? Whether Bush or anybody else lied is totally irrelevant as a defense of Blumenthal. With respect to Obama, as it turns out you have no idea of his qualifications, and why should you. He has gone to great lengths to not provide them. There is no evidence he graduated number one from anywhere ,much less Harvard Law School. Hillary is smiling still.
F*** the stimulus.
Do you actually know what the Stimulus is??????
The “stimulus” is an $800 billion pork barrel Obama and the Democrats passed to pay off their friends. It stimulates nothing except graft and corruption.
Actually I was asking Anonymous but the Stimulus does include
entitlements including unemployment benefits AND middle class tax cuts. I know many who are benefiting from such. The 1/3 that was to create jobs should have been larger.
Where do you suppose Obama got the money to pay for those wealth transfers? Taking $1 from Peter and giving it to Paul does not increase economic activity, but it certainly does increase the amount of swill in the public trough. Government spending does not create new jobs. It does creat more power for the govenment, and that is the primary purpose of the $800 billion pork barrel.
Peter is rich and can afford it and doesn’t spend it. Paul is hurting and does spend. You call it wealth transfer. I call it sharing the pie. 300 + billion went for job creation. Check out the Merritt Parkway and North Avenue tomorrow. Those folks are working instead of being unemployed. Whether they are sustainable jobs is a questions mark but the Federal government employs 1 million individuals and funds countless programs that employ millions along with the bloated military and its contractors. If that ain’t creation of jobs, I am not sure what is?
The Merritt Parkway was a a political payoff to a politician who would not support FDR otherwise. FDR’s oprograms are a very bad example of economioc policies. By 1939 all he had done was shift the tax burden from the upper 10% to the lower 10% of the income distribution all the while keeping unemployment around 20%. Your arguments about the about the benefits of wealth transfer don’t fly. Even the better left wing economists (Rawls) gave up trying to make the same argument years ago. There is no utility calculus that allows for a priori interpersonal utility comparisons. So all the government did was make one person worse off and another better off. And yes, as a result of the wealth transfer, the guys paving the road are working, but people in the private sector are not. The government has not created one new job, and using your argument, it destroyed capital formation in the process. Obama’s programs exactly.
Ah screw… since everybody is more brilliant than Freidman and Keynes combined. Lets let it all go, throw it at the wall and see what sticks!
Its clear that the private sector doesn’t create jobs. But the Government “doesn’t” either. Where is the job fairy when you need them?
But…….
Is the Non- Partisan Congressional Budget Office wrong?
http://factcheck.org/2010/09/did-the-stimulus-create-jobs/
What should have been done instead of the stimulus? How would it have faired (the what if game… yay) Should we have sat on our hands and “waited” for it all to get better?
The private sector is creating jobs; in China, and Brazil, and India, and most of Southeast Asia. Why would any international business create a job in the US? Small businesses aren’t hiring for a numder of reasons, pending tax increases and the cost of Obamacare are among them.
No offense but I don’t believe in any of these online fact check cites or much of anything online these days.
But you don’t believe the official Congressional Budget Office? That’s certainly no fact checking site.
The CBO is not non-partisan. So you think Pelosi made a non-partisan appointment. There’s that bridge in Brooklyn again.
“The Speaker of the House of Representatives and the President pro tempore of the Senate jointly appoint the CBO Director, after considering recommendations from the two budget committees. The term of office is four years, with no limit on the number of terms a Director may serve. Either House of Congress, however, may remove the Director by resolution.”
The site that broadcast the CBO findings was “Fact Check.” I did not go to the CBO site itself. How do I know that “Fact Check” didn’t alter the report or language????? I agree with what you are saying but I do not trust internet sites in any argument.
I have found Fact Check to be in error on a number of occasions. The same people who fund Fact Check help fund Acorn as well. Not a surprise given the obvious bias at Fact Check.
Here is the report straight from the CBO website.
If you discredit a legitimate government source, thats your issue with not being able to understand them
http://www.cbo.gov/ftpdocs/117xx/doc11706/08-24-ARRA.pdf
And the current director while appointed recently certainly doesn’t seem to be a partisan shill according to his CV.
http://www.cbo.gov/aboutcbo/organization/elmendorf_longbio.pdf
Do you Jeff have matching credentials?
He was appointed by a supreme partisan; Pelosi. Do you think a Chicago boy had a chance? The analysis is a static Keynesian analysis. The methodology is controversial, and some might say discredited. A dynamic analysis would very likely render a different outlook. Moreover, the analysis is more of a partial equilibrium analyis than a general equilibrium analyis. There are other deficiencies, but the most glaring is the requirement that the CBO take Congress at its word when it sets up the analyisis.
Jeff its quite clear you take the idea of the party of no right to heart. No source… no matter how legitamate can easily be rendered null and void with a simple cast off of opinion. Bring out the partisan excuse!
Jeff you never answered the question… what could the private sector have done in the stead of tarp? If the industry ship was sinking… how were they also going to be their own seatow?
And as I’ve said before, and I will say it again. The contiuned lack of growth is a direct result of the private sector sitting on their hands. The market will not fix itself.
The Dude, I think your right. Once the house is taken, and NOTHING goes through or gets done, and we are still mired in a recession because the private sector is getting out of dodge and investing in emerging markets, than we can finally move on and prove that the party of NO lives up to its name.
I would ask, why is the private sector sitting on its hands? TARP was unnecessary because the Fed had all of the resources and all of the authority necessary to end the “crisis.” The private sector cannot overcome destabilizing fiscal policies as pervasive as Obama’s. If Obama really wanted to create private sector jobs, the steps necessary are easily recognizable. I wonder if he really does want to stimulate private sector jobs, and many other business owners do as well. Amity Schlaes provides a good perspective in her book “The Forgotten Man.” I think that the “Sick Chicken” case provides some insight into the behavior of the private sector when confronted by an overreaching regime. History man not repeat itself but it does rhyme.
Thank you, Wesporter, for your input and direct link. It is beyond my intelligence to understand the argument against the Stimulus or TARP. Certainly, something had to be done with our financial system crumbling and economy in recession. I voted for Obama and stand by him despite my misgivings over our reentry into Afganistan. I think he has done a fine job and despite critics, I think he is very much the friend of business. Interesting sidenote: if the House does go to the GOP, it is projected that Obama’s approval ratings will increase 15% in the first six months. Perhaps it is not a bad idea for the party of “No” to take the heat for awhile.
Do you think business sees Obama as a friend? Why not? 70% of Wall Street’s money went to Obama in 2008. Do you think he will get a majority in 2012? As I have posted above, the Fed had all of the tools necessary to stabilize the financial system, TARP was completely unnecessary.
Indeed, Obama has substanital contributors on Wall Street and depending on who the GOP nominee is in 2012, will continue to have. But the perception is, thanks to ObamaCare, that he is an out-of-control spender. I don’t think this is accurate. According to what I have read, the FED was sitting in on those meetings with Paulson in late 2008 when the investment banks were in a free fall. The consensus was TARP. The return on TARP funds is about 8% with the auto industry the lone slow payee. Not bad in my book considering how many shareholders would have been stung without it.
Bernanke is not Volker. Ben may not have the backbone to shoulder the burden required. The TARP program was Obama’ opportunity to fill pork barrels that needed filling, if he wanted to mollify his base; exploiting a crisis if you will. Bernanke was not going to stand in the way of the political machine as long as Obama did not oppose his actions. TARP was totally unnecessary. It was an $800 billion poltical payoff. If Volker were at the Fed, things might have been very different.
Yet, following your logic and because of the nature of Bernanke, the FED was not going to act properly. Thus, TARP may have been necessary and actually, from what I read, was a pretty good investment for Uncle Sam. 8% return from the investment banks with the auto industry the only slow payee.
Okay, that being settled. I am still having trouble understanding why a job “created” by the government is any different than that created by the private sector??? If Uncle Sam gives a grant to a hospital and they hire five doctors for the five year grant period, why is this any different than jobs created by a private equity adding an expansion to the hospital and the same number of doctors hired??
The Fed had all of tools necessary to end the “crisis.” TARP remains one of the biggest boondoggles since the New Deal. What would the return on the TARP funds have been if the government did not confiscate the funds? You are ignoring the opportuinity costs, but more importantly; why should the government save a failing industry? GM should have been allowed to fail, and the assets in the firm should have been redeployed to generate competitive returns elsewhere. The government does not create jobs. It takes money from the private sector and invests it in make work jobs that do no add to GDP, net. When a private sector business creates a job, that business uses private sector funds that were either generated by that business (roughly 95% of all jobs) or another private sector actor. The private sector jobs create a positive return. Paving North Avenue creates jobs in the public sector which end once the road is paved. The workers are then unemployed and the government has the increased debt needed to fund the jobs. The jobs do not generate competitive returns or in this case any measurable returns.
I do not know what Bernanke would have done, but I do know that the Fed had all of the resources and authority to do what needed to be done to end the “crisis.” The 8% return is a fiction, it does not take into account the opportunity cost of the funds or externalities. For example, have you noticed that dollar is at a 15 year low against the Yen? Might this weakness reflect a lack of confidence in US monetary and fiscal policy? TARP weakened the US balance sheet and cost us all more than the original cost of the funds. Does a large deficit bring with it costs such as an unwillingness to invest in the face of likely tax increases proposed to close the deficit? Paving North Avenue creates public sector jobs that are short term in nature, and reduces private sector jobs. When the road is paved, the workers are once again unemployed and the government is deeper in debt. When private sector jobs are created, there is no coercion in the deployment of capital, it seeks its highest return. Private sector jobs create competitive returns which can be used to fund new private sector jobs. Despite claims to the contrary, the government does not invest, it spends. GM should have been allowed to fail. Its assets then would have been deployed in more productive enterprises.
The first post was declared “lost” by the server. I apologize for the repeat.
If Bernanke used all the “resources and authority” he needed, would it have not weakened the country’s balance sheet as well???? Despite your thoughts on governmental spending vs. investing, is not the bailouts really investments with a return??? Also, the down side of letting GM (who apparently had a good product line but lousy management) and Chrysler (who had the opposite), there would be mass unemployment then. Your theory requires time for the private sector to recover. We are ADD in this country. Did you hear Jimmy Carter last night say that the country would be better off with a “responsbile” GOP House. Lord, the Democrats on the fence must love that.
If the Fed buys up non-performing loans, that debt goes on its balance sheet, not that of the Treasury. When the Treasury borrows, there is no increases in the money supply, ceteris paribus. When the Fed buys up non-peforming loans, there is an increase in the money supply. When the Fed buys up non-performing loans, there is no increase in total debt. When the Treasury borrows, there is an increase in overall debt. The bailouts appear to have a positive return, if you ignore the costs of the money used in the bailouts. GM has been going out of buiness for 30 years. The return on assets invested in GM is not competitive, if it were, GM could have raised in the private sector the funds necessary to stay in business. The bailout for GM was a payoff to the UAW, funded by the taxpayer. The government should not be picking winners and losers in the private sector.I lived in Georgia in 1970 when Carter was elected Governor. The man is as dumb as a stump, and the people of Georgia knew he was. He won election because the Democrat running for Lt. Governor raised large amounts of money and led the campaign effort. That Democrat was Lester Maddox, who Jimmy “Born Again” Carter described as a “loyal Democrat.” Carter is a total fraud.
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