osted by Rajjpuut's Folly on Sunday, July 18, 2010 1:05:32 PM

"Results alone are never enough, wisdom means understanding how and why things happen, so that a repeatable excellence habit is built and foreseeable failures are avoided." Rajjpuut's reflections on Kepner-Tregoe management training methods and aims.

Why Didn’t the “Stimulus and Recovery Act Work?”


A lot of Libertarians and other Conservatives are not at all surprised that the Obama Stimulus and Recovery Act not only didn’t work but that it actually cost 2.4 million jobs. The question is why did it fail? Why can’t the government, in its vast wisdom, hee hee, create jobs? And why specifically did our communist (55% of folks out there call Obama a “socialist,” but he is and from birth has always been a communist**) president fail with this specific bill? And let’s ask a corollary question, is “jobs created or saved” a meaningful statistic?

Why didn't it work? It’s our old friend from “Economics in One Lesson” by Henry Hazlitt, “the Broken Window Parable” (linked below a.k.a. the Broken Window Fallacy or Broken Window Fable) and it denies the most fundamental precepts of humankind living in society. While economics is actually the simplest of “social sciences,” the fact that human self-interest (and not only rational Ayn Rand type self-interest, but also greedy deluded conquer-the-world-and-make-everybody-do-my-bidding type self-interest as well) repeatedly involves itself in so-called “economic projections” makes the Broken Window Parable the most fundamental error made by the statists, totalitarians, liberals, progressives, and Obamalike Marxists. Unfortunately, most ordinary citizens don't know and/or don't understand the Broken Window Parable and can easily get caught up with the progressive's $$ Utopian dreams.
While Hazlitt’s book (online free http://jim.com/econ/contents.html) is the most helpful aid to understanding human economic fallacy . . . the “one lesson” smacks of the teachings of Gandhi . . . it’s so damn simple, it’s too easy to ignore (http://jim.com/econ/chap01p1.html) but, of course, add in the technique of putting lessons into little and powerful and memorable stories found in both the simple teachings of Jesus Christ in his parables or of Aesop in his fables and the whole thing becomes instantaneously memorable forever: (http://jim.com/econ/chap02p1.html).

And what is the fundamental truth that makes the broken window fallacy eternally useful and valid? Ayn Rand nailed it on the head with her “The Virtue of Selfishness” one of the tiniest philosophic books you’ll ever ecounter and even that book’s “thinness” can be shunted aside in favor of a three-page “Fable” proving rational human self-interest is the engine of capitalism, of liberty and of our very lives and happiness (http://www.econlib.org/library/Essays/rdPncl1.html). So let us nail it all down, why specifically did the Stimulus and recovery act fail?

A. Imagine a typical average free market job paying X dollars per year counting pay and benefits. A real, bona fide and typically permanent job except when it's taxed out of existence.

B. The average similar union job pays 1.62X dollars per year. The difference is FORCED extra pay and extra benefits and extra protections (seniority, featherbedding, etc., etc. ad nauseum) for union workers^^.

C. The average comparable government job pays 1.94X dollars per year in pay and benefits. These are specious jobs which could not exist were not two real jobs taxed out of existence. Yes, some of these jobs (soldiers, sailors, health educators, etc.) are absolutely necessary. Of course, if you were to eliminate virtually all of the non-essential government jobs, you could expect the free market to create real jobs almost magically.

D. The average government-union job pays roughly 2.28X dollars, nuff said.

E. By lying with statistics, the government adds in temporary “make-work” jobs such as the U.S. census work and treats those as if they were real and permanent jobs when counting.

F. Government initiatives, 100% of them, come at real cost which the Left with their “government can solve every problem” mentality willfully and consistently and constantly choose to ignore because it benefits their power grabbing to overlook such facts. For example, Obama is back to tooting his “five-million new green tech jobs” horn once again. This might actually work and actually help the country . . . but ONLY IF viable and efficient green technology had just arrived on the scene. Under those circumstances eleven million real jobs in the economy would be lost creating those five million green tech jobs and so the effect over say, the first six years of the “mandated conversion” process would be horrendous. However, as the example from the Spanish experience (they went from 3% unemployment to now sitting at 21% unemployment) clearly shows, because viable green technology in large part does NOT actually exist, 90% of the green jobs the Spanish government created were NOT permanent. In the Obama example that translates to five million original green tech jobs becoming 500,000 permanent green tech jobs still at the same initial cost: eleven million real, free market jobs.

G. Since Obama used the stimulus money largely to create not only government jobs, but also government union jobs and also temporary jobs . . . 2.4 actual jobs was the cost for each, often temporary government job created.

H. Ergo, regardless of the amount (100 jobs created or saved???) of jobs created or saved, the only valid statistic is NET JOBS ADDED or LOST in the PRIVATE SECTOR.

I. Addendum, the president’s new financial “reform” package is an even more dangerous initiative. Hidden within its 2,300+ pages are about fifty regulations that favor unions over the rest of us (their benefits and their tariffs upon foreign goods translate to OUR HIGHER PRICES. In seeking with this legislation, members to add to the union rolls and great amounts of money added to the union coffers across the country, Barack Obama has just insured that our recession will now become a full-blown DEPRESSION unless this bill, Obamacare and virtually all else his thrust upon us is repealed.

Ya’all live long, strong and ornery,

Rajjpuut

$$ Remember today's progressives are actually against "progress." They use environmental extremism to oppose even ordinary human living. In the name of taking control of everything, they seek to "progress" beyond the "out-dated, ill-conceived and flawed" U.S. Constitution toward Utopian Marxism. Since Rajjpuut sees the U.S. Constitution as the single greatest entity encouraging life, liberty, the pursuit of happiness and progress, you easily understand why he is "anti-progressive" in every way.

^^ Most people are surprised that union workers’ pay and benefits amount to “so little.” Think of it as a dynamic process. What happens is this: unions gradually drive their own jobs out of existence (consider the once huge American automobile industry) so the “average” of all union jobs at any given moment is 1.62X only because union jobs are being lost so rapidly (again look at the auto industry, robots are much more common in EX-union assembly-line jobs, of course, because they are economically viable there where they might not be in a non-union position). It’s just one more contradiction built into unionization that the union bosses don’t want the “proletariat” to consider.

**http://www.politico.com/static/PPM41_eastafrica.html

And just for the heck of it since someone reading this is going to talk about how FDR “saved the country” from similar “dire straits”:

http://www.theproletariatsnews.com/2008/11/special-report-do-we-need-a-new-fdr-to-save-us-from-depression/

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