2009.01.30
Stimulus critique
Martin Feldstein, a conservative economist who advised President Reagan, has an interesting and substantive critique of the current stimulus bill in today's Washington Post. Though he made news by supporting President Obama's call for a substantial stimulus package, he is not enamored with the package that came together. He said it would be better to delay a vote, even for a couple of months, in order to get things wrong. As he bluntly says, "We cannot afford an $800 billion mistake."
It's worth reading.
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I know you meant, "in order to get thing right". I can think of one caveat: what if the government incents people to take on more debt than they already have? this may constrain future spending and we'll start all over again. I think we need to remove all hurdles to businesses doing business here such as lower their taxes and show we have the skills they want.
Comment by Jim — January 30, 2009 @ 12:22 pm
I think if it takes more time, but ends up a better package that is only to our benefit. Maybe a smaller emergency package for the things that cannot wait, but this seems a perfectly reasonable idea. Does he also demand that Republicans come to the negotiating table and work for the good of America not just the Republicans? And who has to take the blame for all things bad that happen while they fiddle? There has to be someone to blame, else the Republicans would have worked harder on the package in the first place.
Comment by Sandi Saunders — January 30, 2009 @ 12:41 pm
I also agree that a few weeks to be sure we have done things right is a good thing. If it is weeks of political stonewalling with no side willing to budge, then it will be a waste of time. This will be a good test of Obama's negotiating skills.
Comment by Joe (not the plumber) Merola — January 30, 2009 @ 1:34 pm
I would have expected better from a Harvard professor. Unless I missed something, virtually everything he mentioned in the way of job creation will be temporary. It is not good judgement for me to sign a thirty year mortgage just because I got a job building a bridge. If that is a huge bridge, it won't last but 5 years. Maybe that is too simple for a PHD in economics to understand. I don't care how many months you take to review it, this package will never be the solution to our economic problems.
We need permanent jobs, then you can make a rational decision to sign a thirty year mortgage. In the area I live in they are laying off RNs with 20-30 years experience. It makes no difference how well trained or educated you are, there is no job security anymore. We need to make some basic policy changes or it will not matter how much money we throw at it, the problem will still be there. By the way, they get rid of the old RNs so they can keep the new ones who don't make as much.
Comment by Allen Bunch — January 31, 2009 @ 1:58 pm
"we need permanent jobs" -Allen
Who in the real world has ever heard such a thing as permanent jobs? That is exactly what the labor unions want and is the quickest way to destroying the rest of the economy the way they did the auto companies. How can you hire someone when there no one is buying your goods and services? How can the economy grow and reallocate when you can't fire and re-hire people as needed?
We've just witnessed Obama increasing the power of unions to coerce workers to join or else as the new President seeks to repay those who lined his pockets during the campaign. We've seen how unions have not worked for Detroit, and we've simultaneously seen how non-unionized business in the southern states has succeeded. If anything is short-sighted, it's how scared workers seek the protection of unions during downturns which ironically only lead to fewer employment options in the future.
Comment by Jim — February 1, 2009 @ 11:04 am
We have also seen how the unchecked greed and avarice of the corporate leaders, financial wizards, crooks who know the right people and worker suppression tactics have gotten us into this mess. The sword in this case has a double edge and until ALL take their share of blame and ALL work for long term solutions, we will continue to fail, blame, and flounder. It really is that simple.
Comment by Sandi Saunders — February 1, 2009 @ 11:26 am
Jim, please explain how the unions destroyed the auto companies. Please explain how the unions destroyed Toyota's sales.
Jim said, "How can the economy grow and reallocate when you can't fire and re-hire people as needed"?
I admit I got in a hurry and said permanent when I should have said we need job security. I was not aware that you "can't fire and re-hire" on a union job. I have known a lot of nonunion workers who stayed on the same job for 30-40 years but the people I know do not have that expectation today. Please explain to me why our nonunion furniture factories in the southern states have closed. Please explain to me why our nonunion sewing factories in the southern states have closed. The list goes on and on. You can blame all of our economic woes on unions but, that sure looks short sighted to me.
Comment by Allen Bunch — February 1, 2009 @ 2:21 pm
Hey Jim, why did Toyota post a loss? Why did Honda announce that they may post a loss for the first time in the history of the company?
I don't care if congress passes a law that totally abolishes unions, our economy will still be broke. A lot of people hate unions for different reasons, what is your reason?
Comment by Allen Bunch — February 2, 2009 @ 3:30 pm
It seems that with a lot of the political squabbling going on, very little has been said about the last 8 years and the way the previous administration (congressional and presidential) catered toward corporate laws and rules freeing corporations to offshore jobs without tax penalty, and basically operate freely without real consequence or worry.
It seems to me that if the current administration were to give corporations tax breaks or some incentives for keeping 100% of its workforce on American soil, (equal to or close to the savings of offshoring jobs) unemployment could go down (in some states it's as high as 10% now), families would be seeing more money coming into their home, and thus spending more to the companies that essentially are unchanged.
I'm all for capitalism and allowing freedom to allow companies do things, but within reason. The same way we have a freedom of speech, with it comes responsibility, and the past 8 years, the freedoms we have given corporate America have come with little to no responsibility.
Unions seem to exist to protect employees from their employer exploiting them, and in that sense, I agree with them. When it gets nitpicky like in new york where a person cant change a lightbulb without being in a union, i think that's when it gets a bit ridiculous.
Comment by scott — February 2, 2009 @ 4:54 pm
The problem that I continue to see is that we as a nation have been living too long off of credit and not enough real money. Credit card debt, home equity lines and needless borrowings have saturated the economy and now there is very little of substance to pay it back.
We have become a consumer based economy rather than a producer based economy. The pendulum can't swing too far in either direction until it causes economic headaches. China is a prime example of an economy who swung too far to the producer side. When the United States and the rest of the world stopped consuming the goods they were producing, their economy started faltering.
Conversely, as manufacturing and service related jobs here in the United States have started to be eliminated along with the explosion of the credit market (I can't call it the "bubble bursting"), United States consumers don't have the availability of credit to continue on the drunken spending spree which has marked the last 8 to 10 years of our economy.
A balance has got to be struck whereby you produce what you consume with some extra for export.
Comment by Will — February 2, 2009 @ 5:05 pm
Scott, I never mentioned unions at all in my original post but, now that we are on the subject, you are exactly right about unions protecting employees from exploitation. Virtually all laws concerning working conditions were passed because of pressure from the unions. Companies and the people who manage them determine whether or not employees need a union. If you have a good employer you do not need a union.
Comment by Allen Bunch — February 2, 2009 @ 5:29 pm
I do not understand why people like Jim stop posting with me when the discussion turns to unions.
Comment by Allen Bunch — February 3, 2009 @ 10:55 am