Progressive Economics, Jobs and the State of the Union: Fixing the Pipes During a Flood

January 26, 2010
By John

President Proposes A Jobs Program to Nowhere

According to several morning news reports, the President will offer yet more targeted relief to beleaguered middle class families during his State of the Union Address on Wednesday night.  Finally recognizing that we face an intractable unemployment rate of over 10% (almost 20% if you include underemployed and discouraged workers), the President is taking almost bold steps to nearly spur a job creation engine that has given up 4 million jobs in the last year.  These steps include:

  • Roughly doubling the child care tax credit for families with incomes under $85,000. It’s non-refundable, meaning it doesn’t help you are unemployed.  Of course, if you’re unemployed you probably don’t need it right now.  Is this about jobs?  Nope.
  • Capping federal student loan payments of 10% of income above some basic income level. Sounds great, but how many students and new grads hire new workers?  So is this about jobs?  Nope.
  • Providing $1.6 billion of additional low income child care assistance. That’s about $84 bucks for every low income child in America.  I’m sure that will help a little in some homes, but it only pays for about 7.4 hours of caregiver time per kid.  I’m thinking that won’t have too much impact on job creation, either. (sources: Urban Institute, BLS 2010)
  • Mandating workplace IRA’s and offering matching tax credit for moderate/low income people. You won’t get an argument against retirement savings here, but folks at the bottom end don’t have the additional disposable income to save.  So offering them a matching tax credit isn’t going to get many takers, and it has absolutely nothing to do with creating jobs.  Maybe we should think about why working people get raises first, and then think about retirement funding?  Nah, didn’t think so.
  • A $100-million dollar program to help finance elder care for middle class families. Are we talking about a new federal program costing only $100-million?  That’s the smallest number I’ve seen from the government since the Ford Administration.  I guess that means it won’t cause too much damage.  But I digress – does this mean we can finally put those old folks back to work?  Nope.  No jobs here.
  • Freezing certain discretionary spending categories for 3 years. Of course, Congress has already increased spending in these same categories by over 50% since January 2009.  And they’re excluding defense, Medicare, social security, veterans programs and debt service which constitute the bulk of the Federal Budget.  Sounds like an incredible sacrifice for somebody I never met – but how exactly will this ‘create or save’ a job?  It won’t.
  • In its desperation to show ‘action’ before November, Congress will add to the list of useless and irrelevant ‘job creation’ programs. I fully expect it to pass an unworkable and pointless ‘new jobs credit’ and to send out still more one-time checks sometime before Election Day.  I am also confident there will be funding for more roads we don’t need, federal government buildings we do not require for unnecessary and unconstitutional services we do not want, and bridges to nowhere in districts dominated by unions able to extort wages at multiples of market rates.

Yes, the President is going to add another few billion to add to his recovery bridge to nowhere.  But this time it will be small ball – little programs that will have little effect on anything but which provide feel-good cover for having no notion of what might actually work.  Better than a $787-billion Stimulus Calamity in 2009, but what could they be thinking in the halls of Congress and in the Oval Office?

Honey, the Flood Waters are Rising Faster – Please Hand Me that Wrench

I wish this were funny.  Why are the President and his fellow travelers so insistent on clinging to a plumber’s eye view of economics?  Why do they think they should monkey with the water pipes in the basement of a $12-trillion economy when flood waters threaten to engulf the entire building?  Wouldn’t it be better to build boats and levees?

Fixing the Plumbing Before the Building is Washed Away?

What is it about Progressives that make them reflexively reject common sense ways to encourage employers to employ?   What did Bill Clinton do in 1995 that saved his presidency and put America back on a path to prosperity, and why did it infuriate his base?

Why Progressives Can’t Grow the Economy

The Rough Truth is our leaders’ myopia around economic growth issues results from a world view that has little to do with individual economic success or personal liberty.  It is centered around their sense that capitalism is basically an immoral economic system, and their belief that the success of one person must result from the exploitation of another.  If this is your world view, then it is natural to try to engineer the entire system for ‘fairness’ and away from private and personal interests.  It leads naturally to extensions of state power, and to tinkering large and small.  2009 was characterized by large transformational initiatives, and 2010 will be mostly small ball – all focused on building out the controlling apparatus of the state.  And when you are hell-bent to build up the state, you crush risk taking and any hope of a jobs recovery.

The Progressives understand their views are not historically popular in the US.  So they couch their purposes in the ‘high holy’ words of the Republic – economic and social justice, pay equity, fairness, due process and the like.  What they mean are the state needs to fix the greedy system that is oppressing us.  They aren’t hiding their intentions – most of us just haven’t taken the time to listen to the meaning and implications of what they are saying.  The President himself described the problem as they see it in 2001, and his words fully explain their world view and their actions:

“(The Constitution) says what the federal government can’t do to you, but it doesn’t say what the federal government or state government must do on your behalf, and that hasn’t shifted and one of the, I think, the tragedies of the civil rights movement was because the civil rights movement became so court focused I think there was a tendency to lose track of the political and community organizing and activities on the ground that are able to put together the actual coalitions of powers through which you bring about redistributive change

We’ll discuss this in more depth in Part II of this posting, after the State of the Union.

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5 Responses to “ Progressive Economics, Jobs and the State of the Union: Fixing the Pipes During a Flood ”

  1. JoJoTo4 on January 26, 2010 at 11:46 am

    This is the whole problem in a nut shell, (I’m not referring to the democrats buy the way that’s a whole different bunch of nuts.) I’m talking about what do we produce in this country that the rest of the world needs? Answer: Nothing! The gross national product is just that, gross! Stimulus, you can’t throw money at people for not doing anything and not expect a deficit. Let us make things, build and create things that the world needs, not throw around a bunch of useless words and money that doesn’t even belong to us. Let’s just get back to K.I.S.S. Keep It Simple Stupid! Stop throwing a bunch of rules at us and make it easy to do business in this country! Well I could rant all day and night about this but I need to fix my own leak. It will probably take weeks instead of minutes because, I have to use a special wrench now ,the old one was made of the wrong material and I can’t buy one today because it has to be made in another country and has to be shipped. Then I’ll have to dispose of the waste water properly according to the EPA. I can’t use my old pump because it’s too loud and smokes! Again can’t buy one today there not made here. Then the city, county, and state get their permit fees and inspection fees. I’ll have to schedule all of them to come out and check my work, which means I’ll have to take time off my second job to be there. Damn I’ll have to get a third job just to pay for this leak! Makes you think, HHHMMMM where’s all this money going to! Well got to go the waters rising maybe I’ll just buy a boat, sure hope it gets here before I drown!

  2. The St. Louis Victim on January 27, 2010 at 11:00 am

    “only a $100 million program?” “only?” In twenty years eldercare will be a trillion dollar entitlement. And that’s only if the ‘great inflation’ does not occur. $100 trillion of it does.

    There is no such thing as an “only” entitlement for the middle class.

  3. Asmaralda Bartipatwitch on February 8, 2010 at 10:24 am

    Well John, Although I think you are unfair in assuming only the democrats don’t know how to create jobs I believe both sides have screwed up as has our society and culture. I believe the concept of “work ethic” must have gone out with the “Great Generation.”
    I recently read about a large plumbing contractor in Virginia that offered $50K per year for apprentice plumbers (plumbers willing to do weekend call can make 150K) he would train them through a VoTech program in the high schools which he would fully fund. The school district said that he had to get 12 to sign up out of 20,000 high school students. He got 10, the school district said he could move forward. After 4 months he had 3 left and the program was cancelled. He has a multimillion dollar business and he can’t find replacement workers for his aging work force(average age early 50s).

    Even though we have an extreme construction slow down in which case one might think it would be very easy to fined skilled workers, it is not. There are not apprentice level trades people available that are legal, skilled,and motivated. If you go to the employment agencies or post on Craig’s list you are likely to get partially disabled (bad backs, bad knees, etc.) workers that watch the clock as if it was the lottery balls and they already had the first 5 numbers. They will work about as fast as my 85 year old grandmother (not sure if this is in the hope of extending the job for as long as possible or fear they might actually accomplish something.) If I want a rough carpenter with adequete skills, a good work ethic, and an attitude of appreciation for the work, I better pick them up outside Home Depot.

  4. John on February 8, 2010 at 10:59 am

    Thanks for your thoughts.

    You make a valid point about the mismatch between the skills we need and those we have. But I could apply that to Engineering, Accounting, and other technical skills – not just the trades (where you are certainly correct). However, I’m not sure it’s because people who work don’t work hard – Americans work more hours per person and per household than any other developed nation.

    Our labor problem, in my view, is the mismatch noted above. In the 90’s and 00’s, we were sold a bill of goods that America would migrate into becoming a knowledge society – where general management, managing money, and managing logistics/trade would be the key roles of the future. We deliberately allowed (or drove) our real goods industries offshore – because they were dirty, dangerous, ‘beneath us’ and/or immoral. Too many of us became administrators for the welfare state instead – and went into law, into government, into finance, into (easily outsourced) services. And now we’re turned upside down, because the world still needs real goods, and they’re made in China (for whom making things is still moral).

    As to your partisan point – I deliberately used the word ‘Progressive’, not Democrat (although a Venn Diagram would show an extensive intersection today). Most Republicans in Congress (not those evil Tea Party voters who now outnumber the Repubs) are also Progressives (look at the statist prescription drug program when W was in the White House).

    I did take a shot at the proposals that are surfacing, and they are being made by Progressive Democrats who have no idea how or why anything not called a ‘program’ works. And as they are in charge, it’s easy pickin’s. It wouldn’t have made much sense to ding the Republicans on this one, as they don’t matter much in DC these days.

    Great points on trade labor. Home Depot seems to have inadvertently created a special niche in our temp labor market… wonder if they could monetize it???

  5. Grocery Clerk on February 11, 2010 at 9:46 am

    To Asmaralda re the “Great Generation”:

    Thank you for using “” (I hope you use your two fingers in the when speaking).
    America had one greatest generation. The Founders.
    As for the generation that survived the depression and won WWII- truly great, indeed.
    Apparently their one flaw was that in trying to give their kids the things they felt they had missed out on (overlooking the strong possibility that it was the adversity that made them great) they managed to raise the most spoiled, self indulgent generation in the history of the world (yes, Rome included). Also in hoping to keep their kids from the horrors of war that they had witnessed, they seem to have instilled in them the very disposition that brought it about: appeasment.
    With all due respect to (and great reverence for) the vets of WWII, the Major from “Band of Brothers” they did not witness first hand the horrors of war. They witnessed the result of an unwillingness to confront evil.

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