Austerity?! You're Kidding, Right?

It drives me nuts that everyone keeps claiming we’ve entered an “austerity” period in government. You can’t read an article in The Economist without them whining about this supposed austerity “endangering the recovery.” Seriously, every. . . single. . . article. And they aren’t alone. Most journalists now whine that “austerity” has “sapped growth” and hurt the economy. Noted liar Paul Krugman recently claimed “the turn toward austerity is a major factor in our growth slowdown.” This is demonstrably false.

In April, the White House and Congress agreed to a “draconian” $38 billion cut in the 2011 budget -- a whopping 1% of the $3.82 trillion leviathan. Oh my! Then in August they agreed to cut $2.4 trillion over the next decade. . . which would be 6% assuming the budget doesn’t increase for ten years (RFLMAO).

So there is austerity, right? It’s slight, but it is there, right?

Well, no.

Data from the Treasury shows that federal spending in 2011 is actually $120 billion higher than it was in 2010. In other words, spending is 5% higher than it was in 2010 and the supposed $38 billion in cuts has somehow morphed into $120 billion in additional spending.

That doesn’t sound like austerity to me.

Ok, so maybe we’re looking in the wrong place? Maybe the problem is really at the state level? After all, we keep hearing about belt-tightening and layoffs at the state level. Could that be where this supposed austerity is happening?

Well, no.

State budgets in 2010 were 8% higher than they were in 2008. And in 2011, they are 5% higher than they were in 2010. And in 2012, they’re estimated to be 2.6% higher again.

So where is this austerity? It’s made up. Liberals have spent like drunken sailors for the past decade. Federal spending is up 93% in 10 years and state spending is up 72% in 10 years, and there are no signs this growth is slowing any time soon. But they don’t want you knowing that, so they whine about austerity. And supposedly reputable magazines like The Economist prove they are too incompetent to even look up the truth. It’s a sad world.

Finally, let me point something out vis-a-vis the Democratic belief in stimulus spending. Federal spending increased 93% in ten years, yet the economy produced ZERO new jobs this decade. What gives? Maybe federal spending doesn't create jobs after all. . .

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Harry Reid's Jobs Bill (yawn)

Scott Brown is a dirty traitor. (Yawn.) He voted for Harry Reid’s (yawn) jobs bill. Oh, I’m sorry, I don’t mean to be rude (yawn), I just find it hard to care about this bill.

Once upon a time, Democrat Max Baucus and Republican Charles Grassley worked together in harmony, hand-in-hand, as lovers, to craft a truly bipartisanship way to throw away $85 billion. Ostensibly, their plan would have created more than one job. . . though I doubt that. Still, they did center justify the text of their bill, and it looked very pretty.

But then Senatorial Rogue Dingy Harry Reid, aka The Dinge, jammed a knife in their backs within about an hour of the unveiling. Indeed, Reid decided that he wasn’t even going to allow that $85 billion dollar bill to come to the Senate floor for consideration because. . . and I kid you not. . . it included things the Republicans liked. So much for focusing on the American people instead of partisan politics.

As a result of Reid’s crapulence, this $85 billion bipartisan bill vanished in a huff of smoke, and Baucus was. . . well, I don’t know if there’s a Senatorial term for what I’m thinking, it’s like “pistol-whipped” only less cool. . . maybe “gavel-slapped”? Yes, that works: This bill vanished in a huff of smoke, and Baucus was gavel-slapped.

In place of the $85 billion bill, Reid produced a “$15 billion” bill. Here is what it does:

• It provides $20 billion to fund highway and transit programs through 2010.

Boy does this sound good, until you realize two things. First, these projects are already underway and have hired all they’re going to hire. So don’t look for new jobs. Secondly, this only spends $20 billion on these projects, which is less than 10% of what the vaunted stimulus bill spent on roads. . . and you know how well that turned out.

• It provides a $1,000 exemption from social security payroll taxes for employers who hire unemployed people.

Now you may recall that I have advocated cutting the payroll tax to provide an incentive for companies to hire new workers. But this ain’t that. First, this is only for one year, meaning there is no incentive to hire anything other than temporary workers. It also appears that you only get the $1,000 credit if the employee stays the entire year, i.e. it’s risky. And it only applies to currently unemployed workers, which means there will be a mismatch between available labor and needed labor. Nice work Harry. Maybe next time, you can limit the tax cut to one-legged men with hunchbacks and an aversion to clowns. Not to mention, if this is a $15 billion bill and it’s already spent $20 billion on roads, that doesn’t really leave much for these tax cuts, does it?

• It extends a tax break for businesses that spend money on capital investments like equipment purchases.

Ah ha! This is the cut in capital gains that I advocated. . . only, it isn’t. This isn’t a cut in the capital gains tax rate. Thus, it doesn’t change business behavior by encouraging businesses to sell their old equipment and replace it with new equipment. This is just a one-time discount on new equipment, which you don’t need if you’re still depreciating the old stuff. And even then, it’s so targeted that even our one-legged man with the hunchback and the aversion to clowns probably won’t qualify.

• It expands the use of Build America Bonds to put states further into debt on capital construction projects.

As I discussed the other day, sometimes infrastructure spending can be a good idea. But this sounds like a gimmick. First, we’re talking about only a couple billion dollars, in an economy that rates in the tens of trillions. Think of it like getting a $20 raise. Woo hoo! No more dog food for you! Secondly, state budgets are so bad at the moment that adding debt is about as wise as telling a junkie where to buy discount crack (Sam's Discount Crack Club. . . on Third and Main).

All in all, these are sort of the right ideas, but done wrong. It's like boiling a steak. Typical Democratic SNAFU. All told, Lawrence Mischel, president of the Economic Policy Institute, thinks this bill will “create no more than a couple hundred thousand jobs.” I think he’s certifiable for even giving it that much credit.

But frankly, at this point, what’s another $15 billion tossed down Harry Reid’s crapper? Thus, I don’t care at all that Scott Brown voted for this. This was hardly an earth shattering vote. Indeed, even Mitch McConnell couldn’t bring himself to care.

But wait, you say, can’t Dingy Harry trumpet this bill as a massive senate success and thereby achieve his re-election? Are you serious? This bill does nothing. It achieves nothing. Moreover, here is what the bill specifically does not do, which the prior version did: it does not help people or states. . . the two groups you’d think it should help.

Indeed, unlike the $154 billion House version, Reid provides no additional funds for state budgets. . . because he hates them. That means that all those state employees who were kept on the job by the stimulus bill will now lose their jobs. It also does not include an extension for unemployment benefits or a subsidy for COBRA health insurance. . . because he hates the unemployed too.

So yeah, let the Dinge trumpet this achievement, if he's stupid enough to try.

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SOTU: Why Obama Is Doomed

Last night, Obama gave the single worst State of the Union speech I’ve ever heard and the worst speech of his career. There was nothing inspiring or memorable. His canned applause lines stunk, his “off the cuff” jokes were poorly scripted, and the rest of the speech can be summed up thusly: anger, accusation, blame shifting, political payoffs to interest groups and “admissions” that everyone else has served him poorly. This speech was meant to hit the reset button. . . it missed. It also tells us that he is doomed to failure.

Obama has a serious problem. Unlike other presidents whose approval ratings have risen and fallen with events, Obama’s have been on a steady downward course. This indicates a man who has lost the public. Thus, his objective last night was to reconnect with the public, to pull a mea culpa, to assure the public he will change, and to convince the public to give him a second chance. He failed. Instead, last night just highlighted why he lost the public in the first place.

Technical Problems: Lack of Inspiration

Obama is a poor speaker and his speech writers stink. He has yet to give a memorable speech, and last night was no exception. There were no memorable quotes, no incredible moments of truth, no compelling arguments, and no moment where he made a genuine call for all of us to come together. Instead, his speech was bland, with angry emphasis substituting for passion, half-hearted praise for America substituting for inspiration, an abundance of “too-perfect-to-be-true” letters from widows and orphans that felt like blatant manipulation, and “I” substituting liberally for “we.” He was snide, unpleasant, insulting and combative. He read poorly. His self-deprecating jokes were all backhanded slaps at his opponents, and he just wasn’t presidential at any point.

The contrast with Virginia Governor McDonnell could not have been starker.

Obama’s failure, by the way, was obvious in two facts from last night. First, the leftists hired by CNN to act as analysts were amazingly subdued. “He did what he had to do” was about the highest praise they could muster (even David Axelrod was subdued). They questioned his priorities (or lack thereof) and even scoffed at some of what he said. Not one person suggested this was a great speech or a memorable speech or that he’d “hit a homerun.” When your own PR people can’t praise your speech, something is wrong. Secondly, CNN’s instant poll showed a 20% drop in the number of people who gave this speech high marks compared to last year. Given that this poll would likely include a higher proportion of Democrats than last year’s, this was a horrible result for Obama.

Political Payoff Smorgasbord

Aside from poor writing and delivery, the main reason Obama’s speech will not resonate with the public is that it ultimately was not meant for the public, it was aimed at his special interest. As I’ve said before, the Democratic Party is no longer a party, it has become an alliance of tribes, each of whom want their share. Last night, emphasized that:

• Unions: Obama promised a second stimulus, aimed at putting “America” back to work. . . targeted at unionized jobs. Further, while he seemed to talk about free trade last night with South Korea, Panama and Columbia, he never said he would push the free trade deals already negotiated with those countries that are languishing in Congress. Instead, he talked about “enforcement,” which is the same anti-free trade garbage his side has been spewing about imposing environmental and labor regulations on our trading partners.

• Environmentalists: Obama promised to get a carbon tax, i.e. cap and trade, even if he had to bribe a handful of Republicans (like Lindsey Graham) to get it, by offering to include subsidies for nuclear power and limited off-shore drilling.

• Gays: He promised to end “don’t ask, don’t tell,” and he promised “increased” civil rights office enforcement, i.e. more lawsuits.

• Feminists: He promised to fight for the feminist panacea “equal pay.”

• Blacks: He promised a national hate crimes law.

The middle class? You get to pay for these promises, and he repeated the silly plan I discussed the other day -- though he shifted the blame on that one to Biden. (FYI, that plan is actually aimed at feminists and college students and the poor, not the middle class.)

To cover his giveaways, he paid lip service to the public’s complaints. For example,

• Obama’s Deficits: He acknowledged the deficit problem, by blaming it on Bush. He then promised a “total spending freeze.” What he did not say was that this would only cover 17% of spending and that Pelosi has already said it won’t get through the House. He then tried to make this sound impressive by talking about the savings this would generate over the next TWO decades. Wally from Dilbert tried this once, claiming his plan would save the company one million dollars. . . over a million years.

• Job Destruction: Obama acknowledged that people remain unemployed, a problem he blamed on Bush. First, he tried to lump the 6.3 million jobs that vanished under his policies on Bush by claiming that the economy had lost seven million jobs in the past two years. Then he blamed lobbyists (which made no sense). Then he bragged about his stimulus bill creating two million jobs -- a well documented lie. (See here and here.)

Now he’s promising targeted tax cuts for small business “for job creation.” No one has any idea what he’s talking about here -- he probably doesn’t even know himself -- but if this is nothing more than a “one time tax cut for hiring” (a new favorite among Democrats) then this is doomed to fail.

• Terrorism: Obama acknowledged that terrorism exists, a big step for him. But he blamed the failure to stop it on Bush, and he specifically blamed the Detroit near-bombing on policies put in place by Bush. Yet, while he acknowledged Bush’s failures he offered no plan to address terrorism other than more of the same. He then, amazingly, made the childish claim that he had “killed more terrorists” than Bush did in 2008. This brought near eye-rolls from the Joint Chiefs.

• Health Care: Obama also whined about the opposition to his health care bill, which he blamed on obstructionist Republicans, corrupt lobbyists, and cowardly Democrats who are worried about elections, i.e. public opinion. Then he said, “I’m no quitter” (another demonstrable falsehood). He then reformulated his plan as “health insurance reform” because no one likes insurance companies, and he challenged anyone who would oppose him to come up with their own plan -- something many have done, though he wouldn’t know that because he refuses to listen. But he waited 27 minutes into his speech to raise this issue, leading one CNN pundit to declare: “he won’t give up on health care, but he’s signaled that he won’t fight for it either.”

• Iran: He acknowledged that Iran hadn’t been fixed yet, which he blamed on the Iranians and prior administrations, i.e. Bush. He then swore that there would be real consequences if they didn’t comply this time. Of course, he couldn’t think of any consequence to mention, nor did he say who would bear them.

• Iraq: He promised again to bring home all of the (combat) troops from Iraq at some point in time, it’s just taking longer than expected because the “three” (formerly “two”) wars Bush left him were such disasters.

• Corruption: Recognizing that most polls put corruption at the top of the public’s concerns about his administration, he (1) promised “to fight corruption”. . . in Afghanistan, (2) he demonized lobbyists and claimed to have kicked them out of his administration -- another lie, (3) he talked about undoing the Supreme Court’s decision that allows corporations to donate money to causes, something recent polls show the public considers a matter of free speech, and (4) swore he would highlighting earmarks to the public. . . as compared to his campaign promise to stop them. He made no mention of his awarding a no-bid contract to a supporter (something he once called “corrupt”) or of the massive amounts of corruption in his administration and in Congress (see here, here and here).

In other words, he paid lip service to the public’s concerns, and he showed that he refuses to accept any responsibility for the public’s concerns and he doesn’t intend to actually address them except with more lip service.

Angry Obama Gives Way To Nasty Obama

Finally, we come to Obama’s biggest problem: his paranoid hatred of “those who oppose.” In a nod to Rodney King’s “can’t we all just get along,” Obama mentioned the word bipartisanship and he spoke of the need to change the tenor in Washington. But then, like a petulant child, he set about settling scores.

He attacked the Republicans over and over, using any falsehood he thought would help him. He tried to blame them for his own failures and then, like a cartoon villain, he incredibly warned them that they would be held responsible for any further failure on his part. He called his own party cowards for trying to hear the message of the people. He blamed Bush for every single one of his faults and failures. And, as noted before, he petulantly tried to sound tough by claiming that he killed more terrorists than Bush did in 2008.

He demonized bankers and lobbyists, in ways not heard since the 1930s -- all the while ignoring the fact that they are his biggest contributors, that they are his closest advisors, and that he appointed them to serve in his cabinet and to run his treasury department.

He even tried to play the self-pity, phony-acceptance-of-responsibility game by taking “my share of the blame” only to twist that into accepting the blame for being stopped by the self-interested and politically motivated acts of others.

Incredibly, he made a highly inappropriate attack on the Supreme Court, in their presence. It is not that he criticized a court decision, but that he attacked the court personally, when he angrily accused the court of destroying “a century of settled law” in favor of special interests (impugning their motives). This caused Justice Alito to mouth the words “not true”. . . giving Obama a second “you lie” moment in as many trips to Congress. And, indeed, it was not true. By the way, as an active attorney, his attack on the Court is an ethics violation and he should be sanctioned.

Finally, he thanked no one for anything.

This man is a child. He knows nothing, and it shows. He out hates Nixon as a paranoid gatherer of enemies and a serial assigner of blame. He out wimps Carter as an effete warrior. He makes the obviously stupid Bush II look like Einstein, and the smarmy insider Bush I look like a zealous reformer. And he makes the dishonest and dishonorable Bill Clinton look like George Washington.

Obama is finished. Not because he doesn’t have time to change, but because he’s not willing or able to change.

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Obama To Save Middle Class

As Team Obama digests the lessons of Scott Brown’s victory, they keep finding new things they “should have done” to entice voters, like "saving" the disappearing middle class. This usually means sops to big labor. In fact, nothing warms an ivory-tower socialist’s heart more than thinking of the great citizens of this nation toiling away in unionized hard-labor jobs. But Obama knows not of manual labor, so his plan to “save the middle class” is a tad different than you might expect. It's also laughable . . . to put it kindly.

How does one save the middle class? Jobs, jobs, jobs, according to Obama. Creating new jobs and reducing unemployment is “the single most important thing we can do to rebuild the middle class,” read Obama from his TOTUS. Then, like OJ Simpson before him, Obama assured us that “I won’t rest until we’re doing just that.”

But if Obama really wants to create jobs, then why doesn’t his plan include anything that could actually lead to the creation of jobs? Could this just be a shallow attempt to buy votes or is Team Obama really that stupid. . . or both?

Here is Obama’s four point cradle to grave plan:

Part One: Child Storage

The first part of Obama’s plan to save the middle class involves a sop to feminist thinking, which holds that a lack of “affordable daycare” enslaves women. So Obama takes the big step of promising to “double the child care tax credit.” Sounds good, but. . .

First, in this case, the word “double” doesn’t actually mean “double” in the traditional sense. Instead, it means increasing the percentage of the qualifying costs that can be deducted from 20% to 35%. Moreover, this applies only to children under the age of 13 because women with children over 13 years of age are evil. Oh, and this increase only applies to families making less than $85,000 a year (the new “millionaire” cut off). Not to mention the amount you can claim is capped, so the maximum benefit is only $900 more than it was before his proposal -- with most receiving far less than that. (As an aside, if $900 in tax cuts is all it takes to save the middle class, why hasn't Pelosi's House enacted such a change before. . . say in 2006, 2007, 2008 or 2009?)

Now, I would be remiss if I didn't point out that this proposal does nothing to create more jobs. That means you can't expect to benefit from this, unless you already have a job, which kind of undermines the purpose of motivating people to get jobs. But at least there is symmetry between the non-motivation and the non-job creation. . . and symmetry is beautiful.

Part Two: Enslaving College Kids

Turning to your school years, Obama’s second proposal is intended to deceive college grads. With all the guile of an evil credit card peddler, Obama essentially proposes to reduce the minimum payment on your student loan debts. He phrases this as capping the amount you can be forced to pay in any one month to 10% of some living wage, whatever that means. But the reality is that this will establish a minimum payment amount that you can pay happily for the rest of your life. Because, while he's proposing to reduce the amount you can be forced to pay at any one time, he’s not changing the amount of interest you are being charged. Thus, if you pay only the maximum payment (minimum) you will be paying on this loan forever. . . and you will pay far more than you would have paid under the old system.

Liberals used to call that "unconscienability." But a better description might be a tax on stupidity, or a tax on the educated. . . either way works for me. But what’s more interesting, this very practice is one of those practices that Obama promised to stop evil credit card companies from doing. Now he’s turning around and proposing to do the same thing to college grads. Nice!

But Obama’s not entirely heartless (his behavior toward his grandmother and his brother notwithstanding). While this will make college students long term indentured servants of the federal government, it won’t actually run forever. After twenty years of servitude, you will be released from your burden. . . only three times longer than the indentured servant contracts of the 17th and 18th Centuries. (By the way, because federal government employees are so put upon, with their massive salaries and their unpaid taxes, Obama proposes to free those who “work” for Club Fed after 10 years instead of twenty. . . call it time off for lazy behavior).

In terms of creating jobs, this doesn’t do squat, but it makes up for that by keeping the future middle class poorer. Enjoy your free lunch college grads, you’ve earned it!

Part Three: Slaving For Retirement

As you toil away in the salt mines, you are no doubt worried about your retirement. Some day, you’ll be too old to work and social security is looking pretty flimsy. So it’s time to start saving for retirement, lest you enjoy eating dog food under bridges. To help you, Obama is planning to force your employer to provide workplace-based retirement savings accounts (formerly known as 401ks). . . and no, your employer doesn’t have to contribute, they just need to do all the paperwork for you. That should raise the unemployment rate from 10% to 11%.

Sadly, if I read my tax code correctly, this will kill off your right to have your own personal 401k, but hey, that’s a small price to pay for getting your hands on a hot self-funded retirement account! Now I know what you’re thinking -- isn’t Obama just proposing to replace our 401k’s with a different kind of 401k? Yeah, but this one is tied to your employer, which makes it less convenient and less flexible, so shut up and stop looking a gift whore in the mouth!

To sweeten the pot, Obama wants the government to match up to $500 if you put in $1,000! I hope you’re ready to live the highlife! Of course, you need to make less than $65,000 to qualify for this amazing benefit, because anyone who makes more than that is rich and, thus, subhuman.

Oh, I almost forgot to mention, Obama promised to excuse small businesses. . . the very companies that don’t provide retirement plans now. So maybe this whole thing is just a wash?

Part Four: Chump Change for Geezers

Finally, as your loved ones speed toward their appointment with the grim reaper, Obama wants to lift some of the burden you’ll bear in taking care of these oldsters. Did you know that in 2006, Americans spent $333 billion caring for the elderly? And that was under the evil George Bush, back when we used to toss the elderly into the streets and run them over with SUVs. Imagine what it must cost now, in the age of the enlightened one!

So how is Obama promising to lift this burden imposed by these dirty, dirty old people? How about a tax credit for taking care of elderly relatives. . . you know it, baby. . . $100 million worth!!! Awesome, that’s like giving $3.30 to someone who makes $10,000 a year! All we need now is for McDonalds to add elderly care to their dollar menu and we’ll be set!

At least this one, unlike the prior three, could create jobs. . . if you believe in magic.

Poverty, thy days are numbered!


Note: By the way, if you want to see what Obama could have done to create jobs and/or raise middle class incomes, check out our proposal for a real stimulus plan. Unlike Obama, we didn’t take stupid pills before coming up with our plan.


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Did GM Take Us For A Ride?

It appears that GM has taken us for a ride. At the end of 2008, GM was on its deathbed (more so than normal at least) and in stepped Uncle Obama with suitcases full of our money. But don’t worry, Obama assured us, he extracted all kinds of promises of change. So why has nothing changed?

GM died about thirty years ago, it just didn’t know it. As the 1980s began, people looked for smaller, more reliable cars. GM made neither and didn’t care to. Its management understood the 1950s and little else. As Japanese and German and then Korean cars got better and better, GM didn’t or couldn’t.

But “GM learned its lessons!” At least that’s what they told us year after year after year. In fact, I recall once seeing a CNBC video showing a series of GM CEOs, every year for the past three decades, mouthing the words (or a paraphrase) “we’ve made mistakes in the past, but we’ve learned our lessons, we’re now making a competitive product.” Yet, nothing ever changed.

GM seems indifferent to its customers. Its union workers are lazy and hostile and turn out low quality, sloppy work -- anyone who ever owned a 1985 GM can attest to this, if the car didn’t kill you. Their engineers lack vision and talent. Rather than creating better, more advanced cars, they spent decades repackaging older brands and slapping new labels on the same turds that nobody wanted the year before. Forget stylish, modern or innovative.

Moreover, GM has been incapable of reigning in costs. I recall sitting in an airplane for five hours in 1998 listening to a GM “engineer” explain with great enthusiasm what he does -- this was after supposedly “draconian cost cuts” by GM. He worked in a building with about 200 people, each of whom did one thing. Their job was to design the knobs on the radios in certain GM trucks. Not all trucks mind you. . . just some. And not radios or faceplates, just knobs. When I asked if it wouldn’t be cheaper to just buy entire radios directly from a stereo maker (like Pioneer), he got an angry look on his face and told me that “GM couldn’t be sure the feel would be right on the knobs.” Seriously.

In 2008, GM nearly died. For years, they had been offering interest-free loans to get people to buy their cars. But this only robbed future car sales, it did not get more people to buy their product. In 2008, this policy came home to roost. Demand in the United States fell from a peak of around 20 million cars a year (at the initial height of the incentive craze) to between 9-10 million. This was a disaster for everyone who sold cars in America.

Having lost over $80 billion in four years, with demand collapsing, and losing $2 billion a month, GM was doomed. But in rushed the United States government to prop up the moribund company. You and I, at the insistence of Team Obama, handed GM just over $50 billion to keep them afloat (not to mention the cash for clunkers program designed to keep customers going to GM). But there were promises. . . “we’ve learned our lesson!” everyone said.

In exchange for the $50 billion, GM was to do the following:

• Cut their costs, particularly their union labor costs.

• Eliminate Pontiac, sell Saturn, sell Saab, sell Hummer (6% of GM’s American sales)

• Sell Opel (18% of GM’s global sales).

• Close 20 factories and eliminate 21,000 jobs.

• Eliminate unprofitable dealerships (1300 by the end of 2010).

These ideas were meant to (1) reduce over capacity in the industry to account for the reality that the American market would only buy 10-12 million cars each year, rather than 15-20 million, and (2) reduce GM’s costs so that they would become a profitable, self-sustaining company. The US Government also received ownership of 67% of the new company -- the rest was shared by the Canadian government and the United Auto Workers.

CEO Rick Wagoner even promised to work for only $1 a year until this crisis passed. Though he was soon fired and replaced by the government’s man, Fritz Henderson.

GM then went to Germany and received another $3 billion to keep Opel (GM’s European presence) open long enough to sell it to Magna. They also went to the Swedish government and got a pledge of $412 million and debt guarantee so that they could sell Saab to Koenigsegg. Saturn was to go to Hertz and Hummer to the Chinese.

Sounds like a ton of change right? Guess what.

Well, this week GM decided that Fritz Henderson wasn’t right after all, so they dumped him. This was such a surprise that even the other corporate officers did not know it was coming. The new guy, GM’s Chairman of the Board Ed Whitacre, is already bringing in “new” people. . . like Stephen Girsky, a former advisor to Rick Wagoner.

Wagoner, by the way, despite being fired, remains with the company. And even though he promised to work for only $1 during the crisis, someone apparently forget to mention that he’s eligible for a $20 million pension should he ever leave the company. One wonders how long before he returns to the CEO position?

But that’s not all that GM has been up to. Thursday, GM announced that they would reconsider the closings of the dealerships. Nothing definite has been announced yet in this regard, except that GM has agreed to “establish a binding review process to evaluate closures and determine whether those were based on business decisions.” Look for this to save most of the 1300 “closed” dealerships.

And we’re not done there. GM decided to cancel the Opel sale. It did manage to sell or dump the rest (or supposedly will soon), but by keeping Opel, GM managed to reduce its capacity by only 6% rather than the 24% promised.

Those union concessions? If you believe the UAW, they made concessions that will save GM $1.2 billion per year, which isn’t all that much for a company that takes in approximately $150 billion in revenue each year. Not to mention that many of these savings may be pay freezes rather than actual cuts -- an old Democratic trick, calling a smaller increase than planned a “cut.”

One thing the union did agree to though was to forgive part of GM’s promise to pay $20 billion to cover health care costs of retirees -- how big of a part I don’t know. Still, it’s nice of the union right? Oh, forgot to mention, in exchange for this promise, GM gave the union a 17.5% ownership of the company and $6.5 billion in preferred stock (paying 9% interest) and a $2.5 billion note. By the way, now that the union is taking over the duties of providing health care, any retiree old enough to be on Medicare will lose their “Cadillac” plan and must instead rely on Medicare. Thanks tax payer.

But at least they shut down factories and trimmed their labor force right? Think again. GM reduced the number of plants to be closed to 14. AND, it will keep four of those on “standby” in case they are needed to meet rising demand. AND they’ve recently announced that another will be retooled to make subcompacts rather than being closed. That leaves nine currently closing rather than the twenty they promised.

GM likes to point out that they’re reducing their labor force from 91,000 to 64,000, but it doesn’t appear to have happened yet. Moreover, it’s not clear that these are anything other than Saturn, Hummer or Pontiac workers. Thus, it’s not clear that they’ve actually made their remaining production facilities any more efficient.

So where does that leave us? It leaves us with a company that got $51 billion of our money based on promises that the company doesn’t appear to be keeping. It leaves us with an industry that will continue to struggle with over capacity. It leaves us with a company that will continue to stagger along on the verge of death until the next bailout.

And people wonder the American public doesn’t trust bailouts.

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Stimulus? They Got Nothin'

On Thursday, Obama will be hosting a “jobs” summit at the White House. This morning, they gave us a peek of what they are planning. Apparently stupid pills were on the Thanksgiving menu.

The plan consists of four parts and has a price tag of $200 billion.

1. Extending Unemployment Benefits

2. Tax Credits for New Hires

3. Aid for States and Cities

4. Incentives for Environmental Upgrades

Clearly, this won’t work. In fact, it would take an idiot to think it would. Cue Joe Biden.

Extending unemployment benefits? This is a reflex action for Democrats (like raising the minimum wage), and they can’t help themselves. But that's no excuse. This will depress employment, not increase it. The longer the benefits run, the longer people can wait to find work, the longer they can hold out for “better” jobs rather than taking what is available, and the more people will simply use the system as a vacation. So why would this be part of the plan? I’d like to think Team Obama views this as a bribe for lazy people. But I’m afraid they’re not that sophisticated. They actually seem to think this will “spur demand” by ensuring that unemployed people can still afford to buy consumer goods. Morons.

A tax credits for new hires? When has that ever worked? Last week I talked about a payroll tax cut. That spurs employment because it becomes cheaper for companies to add more employees. This is apparently what Team Obama hopes to achieve with this tax credit. But, unlike the payroll tax cut, the employer doesn’t get the benefit of this tax cut until the end of the tax year. That does little to stimulate job growth in the near term. And, since this is a one-time tax cut, there is no incentive to hire anyone in the long term -- or at all. Yes, they are cheaper to hire now, but they become too expensive again the moment the tax ends the following year. This was the same problem Clinton ran into with his 100,000 new cops program. The cops were cheap to hire, but too expensive to keep, so few were hired in the first place. Combine these problems and you have little incentive to hire in the near term or the long term. Perfect.

Aid for states and cities? Filling budget holes just like the last stimulus did which did nothing to create new jobs? No, not this time. This time, Team Obama is thinking of creating make-work jobs like Roosevelt did with the WPA in the 1930s. Talk about throwing good money after bad.

Finally, we come to the only one of the four parts that could possibly result in a stimulus effect! Woo hoo! And most of it will be felt in China or Germany, where environmental hardware is made. Vielen Dank Arschloch! Of course, I could be mistaken because this item really tells us nothing, and appears to be nothing more than the usual “green jobs” hocus pocus. Indeed, the idea of creating “green jobs” through some magic subsidy has become the alchemy of the modern Democratic party. And just as ancient alchemists failed to ever turn lead into gold, the Democrats will find no jobs through their subsidies.

What really amazes me about this plan is that Team Obama is genuinely worried about the economy (because it's killing their agenda and their re-election hopes), yet they don’t seem to be able to come up with any answers. It’s not like the answers are hidden or untried. They are, in fact, quite obvious. So why won’t they do what works? Are they blinded by ideology or stupidity?

I’m actually thinking it’s stupidity.

If it were ideology, they wouldn’t be listening to Mark Zandi, the chief economist at Moody’s Economy and a former advisor to John McCain, on how to solve this problem (apparently all the experts Obama assembled have let him down, so he's turned to a McCainiac -- talk about the blind leading the retarded!). So they don’t seem to be stuck on ideology. But if this is the best they could come up with. . . wow. . . just, wow.



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How Stimulating. . .

Let’s continue our rebuilding the Republican Party series by explaining how stimulus plans should be done. With GDP crashing, unemployment soaring, and a double dip recession knocking on the door, it’s time for the Republicans to suggest a plan to stimulate the economy. Not more spending, as Obama proposes, but a genuine stimulus plan. Here it is. . .

About a week ago, we explained why conventional stimulus plans never work, and why Obama’s was worse that most. We noted that most stimulus plans try to increase demand, either by getting consumers to spend more money or by having government spending replace falling consumer spending. But this is problematic.

Getting consumers to spend more simply shifts economic activity from the future to the present. This can stimulate the economy now, but it depresses the economy in the future. Government “stimulus spending” is even worse, because the money the government spends must first be taken from consumers. Thus, the government depresses the economy at the same time it tries to stimulate it. . . unless the government borrows the money, in which event it depresses the future.

Just thinking about this logically should be enough to give us pause. If stimulus spending really could increase the overall economic activity of a country, wouldn’t it make sense to start spending wildly and to keep spending until we were all rich. Yet, even the most wild-eyed proponents of stimulus spending don’t think that’s a good idea.

Moreover, by directing spending (e.g. cash for congressmen. . . er, clunkers), the government creates distortions in the market, where money is spent on projects that are less beneficial to society than those upon which the money would otherwise have been spent. This causes the economy to be less efficient and can lead to significant problems down the road (like housing bubbles).

The goal of a stimulus plan should be to encourage people to generate more wealth. More wealth means a greater capacity to spend without stealing from the future. Stimulus spending does not do that, it only shifts money around from savers to spenders or from the future to the present. So what would do this? Here are two proposals:

Proposal 1: Cut The Payroll Tax

Our first proposal is to cut the payroll tax. Why? Because that will encourage people to work more and it will encourage employers to hire more.

Human beings value leisure. It’s true. When the value of working exceeds the value of leisure, they will work. When it does not, they goof off. Want proof?

Ok, would you come work in the Commentarama file room on Sunday for one hour for free? Probably not. Why? Because you value your leisure time more than you value what you would get from working for us. . . a big old goose egg. But what if I offered a crisp fiver? Still nothing? Ok, what if I offered $500. Suddenly, you’re starting to think about it. Some of you will accept this, some won’t. If I offer $1,000, more of you will jump at the offer. At some point, each of you will jump. . . like lemmings. The point where you would jump is the value that you place on one hour of leisure.

To get you to work more, our stimulus plan needs to increase the value of working to the point that it exceeds the value you place on your leisure time. Fortunately, people don’t value all of their leisure hours at the same rate. Indeed, it takes a lot less to get someone to agree to work 41 hours instead of 40, than it does to get them to agree to work 70 hours instead of 40. So even minor changes to the value of work can get people wanting to work more.

The easiest way to increase the value of working is to cut the payroll tax. By decreasing the amount the government takes from your paycheck, the government makes each hour of work more profitable. This gives you an incentive to convert some of your leisure time into work time. As millions work more, they generate vast amounts of economic activity. They can then turn the extra money they earn into spending, i.e. stimulus, without the normal negative effects of stimulus spending because they generated that new wealth rather than merely shifting it from the future to the present. Basically, cutting the payroll tax encourages people to convert their leisure time into stuff.

But will the work they seek be available? Yes, especially if you cut the employer contribution as well. Cutting the payroll tax decreases the cost to the employer of employing you. Think about a company that employs 50 people at $20,000 per year each. That company has a payroll of one million dollars per year. A two percent reduction in the employer portion of the payroll tax results in cost savings to the company of $20,000 a year. That means the company can hand out more overtime, increase salaries, or hire one new employee without any increase in overall payroll costs.

This effect will be repeated across the economy as a whole (because all workers are affected by the payroll tax), leading to increased incomes and increased employment opportunities. And, best of all, nothing is stolen from the future to make this happen.

Interestingly, several European governments have experimented with this and found it to be highly effective in reducing unemployment. I have also see estimates that a 1% cut in payroll taxes would generate three million new jobs.

Proposal 2: Decrease The Capital Gains Tax

Wait, don’t hit that mouse button. I can explain this in a way that makes sense and that won’t have you trying to slice your wrists. Here’s why a capital gains tax rate cut will spur economic activity.

First, I’m not talking about stock sales when I say capital gains. What I’m talking about here are the gains that companies experience when they sell capital equipment, like bulldozers or computers. What gains you ask? Well, when you buy something like a bulldozer, each year you write off a portion of its value as depreciation. If you then sell it for more than the value at which it sits on your books, you have a gain. . . a capital gain.

If we reduce the capital gains tax, we will increase the incentive for companies to replace their capital equipment sooner. That means more jobs for the makers of the equipment, as more people are needed to make those computers or bulldozers.

With more companies trading up sooner, this also means that there will be more (better/newer) equipment available in the "used equipment" market. This will help smaller companies who can’t afford to buy new equipment. These companies can then replace their own bulldozers/computers and pass what they have into the used market quickly as well, which helps someone else down the line. This improves the efficiency of each of these companies, which usually means more money to expand.

The same effects will occur in any capital equipment market.

Interestingly, the Democrats hate this idea. This shows their inability to give up on class warfare. A capital gains cut generates jobs and stimulates the economy, there is little serious debate about that. BUT, it also benefits people with money, and that is intolerable to the left. They would rather that no one benefit, than run the risk that a rich person might benefit more than a poor person.

So far, the Republicans have been unable to explain to the public why the Democrats are wrong. Part of it lies in an inability to explain why this tax cut works. For example, it was obvious that McCain didn’t have a clue when the issue arose in the debates. But equally importantly, the Republicans usually focus on a generic capital gains cut, which includes the profits from the sale of stock. This allows the Democrats to paint this as a plan to let a thousand Scrooge McDucks sell their stock and use the gains to buy more gold for their money piles. To counter this, the Republicans should propose limiting the capital gains tax cut solely to the sale of capital equipment (or eliminating the capital gains on the recapture of depreciation). This would allow the Republicans to paint the Democrats as opposed to workers.

Conclusion

Cutting the payroll tax and the capital gains tax would truly stimulate the jobs market, would stimulate people to work more, and would result in overall increased economic activity. The effect from both would be immediate, so there’s no need to wait for the spending to kick in, and neither suffers from the problem of stealing from the future. With the economy in such a poor state today, and Obama out of answers, now is the time for the Republicans to put forward this plan.


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Obama's Stimulus Delusion

With unemployment jumping to 10.2% in October, the highest level since 1983, underemployment reaching 17.5%, and the average weekly work week falling to a record low of 33 hours, the Obamaconomy is sputtering. Thus, it will come as no surprise that Obama is promising “to pursue further measures to create jobs.” Uh huh. Let’s talk about why the stimulus didn’t work and why Obama’s second stimulus will fail as well.

Why Stimulus Spending Never Works

Stimulus bills rarely work. Massive stimulus spending in the 1930s, 1960s, 1970s, and under Bush/Obama all failed to increase economic activity. Yet, liberals continue to love them. Indeed, it is a matter of faith among liberals, that federal spending can ignite the private economy by spurring demand. But you just can’t spend yourself to prosperity.

Liberals subscribe to something called Keynesian Economics. This theory, developed by John Maynard Keynes, holds that every dollar spent will result in a fivefold increase in GDP. For short term thinkers, which liberals are, this theory is manna from Heaven. But, as usual, they’re wrong.

Keynes’ economic theory relies on a little fiction called ceteris paribas, Latin for "all other things remaining unchanged." But in the real world, actions cause reactions, and it’s those reactions that Keynesians fail to consider.

Stimulating Consumer Spending ("Demand") Is A Bad Idea

The first goal of all Keynesian advocates is to stimulate consumer spending, i.e. demand. But this is a bad idea. If you stimulate spending by encouraging people to spend more than they otherwise would, you can get a short term boost -- Keynes is right about that -- but you create longer term problems. Indeed, every dollar a person spends today is a dollar they cannot spend in the future. So you are robbing the future to pay for the present. Moreover, if they borrow the money they spend, their overall ability to spend decreases by the amount of interest they must pay to get the loan.

So what you ask? Well that's what caused the current economic problem. The easy credit of the last decade allowed people to spend their future income at an alarming rate. Consumers were willing to do this because they believed they could tap the equity in their homes to cover their debts. Then housing prices fell. In response, consumers stopped spending because they became desperate to pay off their suddenly over-sized debts. Asking them to start spending again, simply will not work. It's irrational. . . it's like trying to avoid a hangover by staying drunk.

This, by the way, is why consumers used the Bush tax rebates to pay off debts, and why not all tax cuts generate a stimulus effect -- one time rebates (the only tax cuts Democrats like) are a bad idea.

Moreover, stimulus typically causes a misallocation of resources that can be catastrophic. For example, if we encourage people to buy cars today (see cash for clunkers), they will be less likely to buy cars in the future. If carmakers don’t understand this, they will respond to the increased demand today by ramping up production (like GM did). But when the sales fall again in the future, all of that extra production becomes a weight around the company's neck, which drags it down and can lead to a double dip recession following the second round of layoffs.

Further, by getting consumers to buy cars, government causes them to forgo other products that likely represent a better use of their money for them and for society. Indeed, whenever the government gets into choosing winners and losers, the result is always harmful.

Thus, while encouraging consumer spending (demand) can lead to a short term economic boost, the long term effects are quite harmful.

Government Stimulus ("Spending") Is An Even Worse Idea

It's even worse to have the government try to take the place of “missing” demand by going on a spending spree. In the example of a consumer spending a dollar, that dollar is something the consumer earned. But the government does not earn money, it takes it. Indeed, every dollar the government spends is a dollar taken from a consumer. Thus, while the government’s dollar can cause the same Keynesian effect as consumer demand, the act of taking the dollar from the consumer in the first place causes an inverse-Keynesian effect, as the dollar is taken out of the economy. In other words, by taking the dollar from the consumer, the government is cancelling out the stimulus effect it hoped to achieve.

Moreover, studies have shown that the government is simply not as effective in generating a stimulus effect as consumers are: it takes too long to spend the money and it goes to the wrong places. Which brings us to the Obamulus.

Why Obama’s Stimulus Was Worse Than Most

When the government spends money hoping for a stimulus effect, it usually aims for infrastructure projects. This is in part a nod to history, when our economy was based on such activities, a nod to unions, as such work is often unionized, and a nod to the idea that infrastructure is the one thing the government can buy that will benefit the greatest number of Americans.

Consistent with this, Team Obama promised massive amounts of infrastructure spending. In fact, the word “infrastructure” became almost a reflex to them whenever they mentioned the stimulus. Even now, when discussing the new "second stimulus" (actually third), Obama keeps hitting the “infrastructure note”:

“My economic team is looking at ideas such as additional investments in our aging roads and bridges, incentives to encourage families and business to make buildings more energy efficient.”

But the reality is rather different. Of the $787 allocated by the Obamulus, only $195 billion is targeted at what you or I would consider “infrastructure” projects, and most of those are boondoggles. The rest form a mixture of social spending and tax rebates, with the social spending going primarily to plug gaps in state budgets. None of that will generate any stimulus effect.

This point was highlighted when it was revealed that Obama’s “jobs created or saved” numbers were fraudulent. Remember Obama admitting that his jobs claim had been overstated -- that it wasn’t 750,000 as he claimed, it was really 30,383? There's more.

After this admission, Obama supporters conducted a new study, which they used to claim that actually 640,000 jobs had been saved. But the numbers don’t come anywhere near adding up. And many of these jobs were not actually saved. More than half of these jobs (325,000) were education jobs that were in no danger of being cut. For example, it was revealed the other day that 26,156 of the 100,000 jobs California claims were saved by the stimulus were California State University jobs that would not have been terminated even without the stimulus money. Those 26,156 jobs, by the way, are more “saved” jobs that were reported by 44 other states.

The Associated Press found that in one federal agency, pay raises for more than 7,000 jobs were counted as jobs saved. Many other “saved” jobs have been similarly exposed as falsified.

Moreover, as with all things political, the money was poorly distributed, going largely to the states that needed the least help. Indeed, a Wall Street Journal study found that states with the highest bankruptcy, foreclosure and unemployment rates got less money than better-off states. The study also found that higher income states received more money.

Thus, the money was not even spent where it would do the most good.

Is there reason to believe that a second stimulus would be any better? No. The problem here is that the Democrats fundamentally misunderstand the nature of economics.

Soon, I’ll outline a better way to do a stimulus plan.

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Musical Stimulus: Cash-for-Clunker

The “cash-for-clunkers” program was such a stunning success that it proved the wisdom of stimulus spending, right? Indeed, it was the perfect plan. By offering Americans $4,500 to trade in their “worthless” clunkers on brand new cars, the cash-for-clunkers program could stimulate demand, increasing the numbers of cars sold, stave off recession, save Detroit, and protect the environment all in one swoop. And according to the media, it was a stunning success. . . except that it wasn’t.

The Stimulus That Wasn't

Many argued that the cash-for-clunkers program would not actually stimulate consumer demand. They argued that this program would only cause consumers to hold off buying new cars, or would convince consumers to move forward purchases that were already planned to take advantage of the program. Never fear, a succession of experts assured us on CNBC and the other networks, such fears are unfounded.

And when the program quickly blew through the billion dollars allocated to the program, the experts were even more adamant that this was new demand. “We are seeing people come into our store who never would have bought a new car,” said dealer after dealer on CNBC, as they demanded another two billion dollars to keep the program running. Ford Motor Co. was so optimistic about these “eye-poppingly high” sales (compared to the year before -- the worst in company history), that they announced plans to increase third-quarter production by 18%! Indeed, Ford estimates that 700,000 cars will be purchased under the program (though only 157,000 have been purchased so far).

So Congress dutifully added another two billion dollars to the program and a funny thing happened. Sales started fading, fast. According to Joshua Shapiro, chief US Economist at MFR, this meant that the sales in July had been borrowed from the future. In other words, this program did not stimulate demand, so much as it shifted demand from 2010 to July 2009. “Anyone thinking about buying cars in the next several months might as well do it now when the government is giving away $4,500.” Edmunds.com Senior Analyst Michelle Krebs likewise notes that “we see that interest dying down.”

It remains to be seen how these numbers turn out, but right now it appears that the program has only given some benefit to July at the expense of 2010.

Collateral Damage On Consumer Spending

But robbing 2010 to pay July is not the only harm this program has done. Several economists have warned that the cash-for-clunkers program would draw money from other consumer purchases. This complaint seems to have been confirmed, when retail sales fell unexpectedly in July. Many now attribute this drop to the increase in car sales. Observed economist Shapiro of MFR, “with income flows very constrained and household balance sheets over-leveraged, any incremental increase is likely to weigh on non-automotive sales.” In English, that means with consumers being so strapped, they had to stop spending on other items so they could afford these new cars.

Ford, of course, rejected this suggestion, saying that the cash-for-clunkers scheme was “a drop in the bucket compared to overall purchases of goods and services.” But that doesn’t explain where consumers got the money to purchase the cars. That also makes one wonder how this could have stimulated the economy if it was a drop in the bucket?

Collateral Damage On Charities

The cash-for-clunkers program had another victim that has only recently been identified: charities. Under the program, these “worthless” clunkers must be scrapped. But in the past, these cars would have been donated to charities. Not coincidentally, donations of vehicles to charity have fallen 12 percent already and may fall as much as 25 percent -- which could cost charities well over $100 million this year.

One car donation program director, who states that the types of cars being turned in under the program “are absolutely the typical donation to us,” estimates that this will cost charities approximately 175,000 cars, if the program’s estimates prove true. He notes that the result will be “devastating.”

I Shoot A Stimulus In The Air, It Fell To Earth. . . In Japan

Finally, while the program was implemented with the idea of helping Detroit automakers, the top beneficiaries of the program have been Japanese. Indeed, while the Ford Focus is the most purchased car under the program, the other four top cars are all Japanese. Moreover, General Motors, Ford and Chrysler accounted for only 47% of the 157,000 new vehicles sold under the clunkers program so far. Fortunately, many of the Japanese models acquired are made in the United States, just not in places like Michigan.

Interestingly, the Detroit automakers did dominate the list of the clunkers that were turned in, securing all ten of the top ten spots.

A Mitigated Success

So this program that we are told was an unmitigated success, finds it's success quite mitigated. It appears that the program simply convinced people to move forward already-planned purchases, which will harm the economy in the future. It harmed retail sales, which harms the economy in the present. It harms charities, who are most needed in bad economic times. And it seems to have wildly missed its target, despite all the talk about being so well targeted.

Let us hope that Detroit saves their pennies from these sales, because they may need them in 2010.

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Obama Saves Jobs. . . From Being Worked

If Obama keeps "saving" jobs, we're all going to be unemployed soon. Indeed, since January, Obama has saved 84,000 jobs, but he's done so at the cost of $719 billion and 3.9 million real jobs. Read on. . .

Obama's Promises Are Nonsense

During the campaign, candidate Obama promised to create five million jobs and to bring peace between the very rocks and the waves. Sounds good, right? Think again.

Unemployment at the end of 2008 was at 6.9% according to the Bureau of Labor. Said differently, of the 155 million “workers” in the United States, 10.6 million were unemployed. Obama’s plan to create five million new jobs, therefore would have translated into a reduction in the employment rate from 6.9% to 3.2% -- two percentage points below what is considered the natural rate of unemployment. That’s not good. Can you say hyperinflation?

Fortunately, times change and so do Obama’s promises. A month later, as Obama assumed the position in the Oval Office, he lowered his claim. Gone was the plan to create 5 million jobs, and in its place was a promise to create or save 3.5 million jobs. This would bring unemployment down to a more realistic 4.5% (if all the jobs were created) or it would leave it unchanged (if Obama favored us only with saved jobs).

Of course, the claim that he would “save” jobs made this promise nonsensical, as Republican Sen. John Ensign pointed out to Treasury Secretary Tim Geithner (pictured left):

"When you use the term 'create or save' you've given yourself complete leverage where you cannot be wrong, because you can take any scenario and make yourself look correct."

And Ensign would be right, except that Obama can’t stop taking credit for everything good he can find. Thus, not only can we analyze Obama's plan, but we can analyze the results he is trumpetting. . . and they blow.

The Obama Plan

Obama told us that he would only shake his magic job-giving beads, if we passed the stimulus bill. The price tag on the stimulus bill was $787 billion (not counting the $152 billion already provided in the Economic Stimulus Act of 2008 or the $700 billion spent on the Troubled Asset Relief Program (TARP), $455 billion of which has already been given to 608 companies).

Thus, depending on what you include, Obama plans to spend either $939 billion or $1.649 trillion to create those 3.5 million jobs. That works out to either $286,285 or $471,142 per job.

(And this doesn’t even address the issue that the $787 billion price tag for the stimulus is understated, with the real price tag being closer to $3.27 trillion -- which would mean we’re paying $1.28 million per job).

How Is Obama's Plan Working?

In the past week, there have been murmurings about the lack of jobs. See, Obama promised to create or save 3.5 million jobs between January 2009 and January 2011. But while we are nearly a quarter of the way to January 2011, he’s only created 150,000 jobs so far -- a mere 4% of the number promised.

Even more troubling, 66,000 of those were short-term summer jobs created by the census department, each of which would have been created even without the stimulus, and each of which will disappear again soon. Thus, Obama's stimulus really created only 84,000 jobs (or 2.4% of his total promise).

To be fair, though, Obama hasn't spent all of the stimulus yet. Indeed, he's only spent $719 billion of the total stimulus so far. . . working out to around $8.6 million per job!

But never fear, Obama has promised to step up his game. He will shake the magic beads again. On Monday, he promised that he would create/save another 600,000 jobs in the next 100 days. Of course, 125,000 of these are part-time summer youth jobs, and 135,000 are public sector education jobs, and 5,000 are public sector law enforcement, but the other 335,000 could well be permanent, private sector jobs.

And while this hardly fits Obama’s state of the union promise that “more than 90 percent of these jobs will be in the private sector,” at least this is a step in the right direction. Indeed, won't adding another 750,000 jobs to the economy will reduce unemployment by 7%, bringing the unemployment rate down to 6.5%? No.

It would have worked that way, if unemployment hadn’t kept increasing. But the May unemployment rate rose to 9.4% or 14.5 million unemployed. Thus, while Obama was busy making 84,000 jobs, the economy lost 3.9 million jobs, for a net loss of 3.8 million jobs!

Moreover, Obama’s promise to create (or save) 3.5 million jobs doesn't look so good anymore. Even if he manages to create all of those jobs, his efforts now will only “reduce” the unemployment rate to 7.2% -- 0.3 percentage points above where it was when he started.

Sweet dancing gnomes! $4.122 trillion in spending and $3 trillion more in loan guarantees under the TARP, and that's all we're going to get?!! Stop Mr. President. . . just stop.

But I will leave you with this little bit of good news. At this rate, it will take Obama 91 years to bring employment to zero in this country. . . just a little longer than it took the Soviets.
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