We've seen this movie before

The definition of insanity is doing the same thing over and over again and expecting a different result.

President Obama urged reluctant lawmakers Saturday to quickly approve nearly $50 billion in emergency aid to state and local governments, saying the money is needed to avoid "massive layoffs of teachers, police and firefighters" and to support the still-fragile economic recovery.

In a letter to congressional leaders, Obama defended last year's huge economic stimulus package, saying it helped break the economy's free fall, but argued that more spending is urgent and unavoidable. "We must take these emergency measures," he wrote in an appeal aimed primarily at members of his own party.

The stimulus package that the President is referring to of course, is porkulus. Porkulus, remember, was not going to let unemployment get above 8 percent (currently at 10) and was going to do this by "creating jobs" via infrastructure projects and by propping up state and local governments to save the jobs of public safety workers and teachers.

And just back in February, a $15 billion jobs bill, son of porkulus, was passed which was to be a quick infusion of cash into the economy to save teachers jobs but in reality was a Congressional photo-op to prove to a skeptical public that while mired in a bruising fight over ObamaCare, the Congress and the President were still quite capable of flushing money down the toilet.

Which brings us to where we are today: a still sputtering economy that is wracked by high unemployment and where the hundreds of billions of dollars that have been spent through stimulus projects and Keynesian demand-side gimmickry have only delayed/prevented a true and robust recovery. And Congress really thinks this additional $50 billion is going to actually accomplish anything of lasting value or substance?

And remember that the requested $50 billion is on top of the original $800+ billion porkulus package which was designed to roll out most of the spending this year, an election year.

It remains a mystery to us that the lesson of not being able to tax and spend your way to prosperity let alone anything resembling a recovery is lost on so many people.

Call him... no really

Vice President Joe Biden capably displaying why he is the perfect fit to be the front man for stimulus.

You'd have better luck checking between the seat cushions of your sofa

So, where do you go when you want to find out where the federal stimulus money is going? Well, you sure as hell don’t go to recovery.gov, the official website of the stimulus plan which just offers broad brush strokes and splashy graphics but zero in the way of information on specific projects like the John Murtha-Johnstown Cambria County Airport (pop. 20 passengers a day).

Since there is no parent-child relationship between the federal, state and local governments and no hard and fast reporting requirements for who, where and how much with respect to the spending of stimulus dollars, the promised goal transparency is being met with the predictable results.

And since recovery.gov won’t have any details on the whereabouts of your stimulus tax dollars until October, who ya gonna turn to? Enter: the private sector.

An outfit called Onvia has a website of the their own named (cheekily?) recovery.org that, to date, has logged 10,000 specific contracts worth $40 billion and it’s provided completely free of charge.

Check out the Reason.tv video below with Onvia CEO, Mike Pickett talking about his website and accountability and transparency.

If embed no worky, please click here.

May we suggest, perhaps, cloves of garlic and a wooden stake

The populist lynch mob aka the “Hey, look over there” U.S. Congress was thrashing about like a rabid and wounded animal yesterday trying to get back the bonuses to AIG that they had approved in the stimulus package.

The House of Representatives yesterday overwhelmingly approved a near-total tax on bonuses paid this year to employees of American International Group and other firms that have accepted large amounts of federal bailout funds, rattling Wall Street as lawmakers rushed to respond to populist anger.

Despite questions about the legality of the retroactive 90 percent levy, Democrats and some Republicans said the tax on bonuses for executives earning more than $250,000 per household annually was the quickest way to show angry Americans that Congress intended to recoup the extra dollars. Even backers of the measure noted it was an extraordinary step.

The House vote sent some employees into a panic about the prospect of, in effect, having to give up money they might already have spent. And it had regulators fearing it could undermine the Treasury's efforts to stabilize the financial system if banks tried to flee the bailout program or if other firms refused to participate in future rescue operations in order to protect their bonuses, some executives said. That could curb lending and damage the economy.

And more good news forthcoming over which Congress can get more uppity.

Rep. John Lewis, D-Ga., said a House subcommittee inquiry had revealed that 13 financial firms that received an injection of government money owe more than $220 million in unpaid taxes. All 470 firms that participated in the government bailout program were required last fall to certify they did not owe back taxes.
Meanwhile, beleaguered mortgage giant Fannie Mae disclosed it was set to pay its own big-money retention bonuses – ranging from $470,000 to $611,000 – the very sort of payouts fueling condemnation of AIG.

To top it off, Citigroup, which has received $45 billion in federal money, planned to spend $10 million for new offices for its top executives.

And who led the charge to levy the 90% tax on these bonuses? It’s gotta be:

The effort to impose the tax was led by the Ways and Means Committee chairman, Rep. Charles Rangel, D-N.Y., who just days earlier had expressed reluctance at using the tax code for this purpose. Rangel has also sought donations from AIG for a public policy institute at City College in New York that will bear his name.

You just can’t make up this sort of stuff.

So, there you have it. Congress is taking Constitutionally-dubious action that will not save a single job let alone create a single job, will not put one more dollar in your pocket, will not do anything of real benefit to society and which, in fact, will prove itself to be counterproductive in the short, mid and long term.

Yep, we’re in good hands.

Exit question: Now that we’ve been taught to demonize the banking and financial institutions, what is the Obama Administration going to do the next time they give these no good miserable fat-cats another couple or so hundred billion (a trillion, anyone?) of your tax dollars?

A preview of coming attractions?

Hey, remember us asking of the whereabouts of that $286 Billion highway bill that was signed into law just 3-1/2 years ago? Well, we think we found it or at least bits and pieces of it.

Design and engineering companies helping to build the nation's highways ran up millions of dollars in inappropriate charges at the expense of taxpayers, including bills for parties, luxury car leases and hefty paychecks for executives, according to auditors.

The bills were described by the firms as overhead costs but should not have been allowed, according to a Feb. 5 report by auditors in the Department of Transportation's inspector general's office.

The report serves as a cautionary tale as the federal government is preparing to quickly disburse billions in stimulus grants to states for highway projects.

And what we’re some these “unallowable expenses”?

$355,767 to pay personal income taxes of executives.
$301,667 to lease 45 automobiles, including Mercedes, BMW and other luxury cars.
$247,685 for dinners, tickets to sporting events and holiday parties.
$60,000 paid to a consultant with only a verbal agreement.
$35,352 charged by two firms for “image-enhancing items such as golf shirts.”

But we’re just getting caught up in red herrings and little porky amendments, here, aren’t we?

In other news last week…

Billions of dollars are headed to California from the federal stimulus bill, but state officials won't say how they plan to spend the money.

Gov. Arnold Schwarzenegger's office refused a request from The Associated Press under the California Public Records Act to list in detail the projects the administration says will benefit. Yesterday, the administration told some state agencies and departments to refuse to comment on where the money would go.

The stimulus bill is expected to shower California with $26 billion of federal funding and the state either does not have a clue where and how the money will be spent or is flat-out refusing to say where and how it will be spent or a combination of both.

Now,what could possibly go wrong in a scenario like this?

Wham-bam, no thank you, ma’am! (UPDATED)

Rep. John Culberson, TX claims the "stimulus" bill must be urgently voted on today -- because Speaker Nancy Pelosi is leaving at 6:00 PM for an 8 day trip to Europe!

It's nice to see we've got our priorites straight on this one.

Sen. Frank Lautenberg (D-N.J.) predicted on Thursday that none of his Senate colleagues would "have the chance" to read the entire final version of the $790-billion stimulus bill before the bill comes up for a final vote in Congress.

In actuality, we know enough about this bill already. Its doubtful we're going to find a baby in this porkulus king cake to make us change our mind, however, it's all about keeping an open mind so we'd like some more time to review the final product in full, Madam Speaker.

The bill now clocks in at 999 pages and was just made fully available late last night.

(UPDATE #1):

Handing the new administration a big win, House Democrats passed President Barack Obama's $787 billion plan to resuscitate the economy on Friday despite a wall of Republican opposition. The bill was approved 246-183 and sent to the Senate, where a vote was scheduled late Friday afternoon.

Yes, it’s all about the scoreboard but when 7 members of your own party cross over to vote against it and you were unable to peel off one Republican, the descriptive “enjoyed broad bi-partisan support” will have to take a powder.

And here’s House Minority Leader John Boehner explaining to America just how it is most legislation in this country gets passed.



We’re with ya Mr. Boehner but we’re wondering where this sort of indignation over spending was some 3,4, 5 years ago when, you know, “conservatives” controlled both the House, Senate and the White House? The Republicans had their chance and they blew it and now we are all going to pay the price for the fiscal restraint non-compliance of the Bush years..

Blog Post of the Day

So about that post-racial stuff…?

But if there aren't enough skilled professionals to do the jobs involving new technologies, the stimulus will just increase the wages of the professionals who already have the right skills rather than generate many new jobs in these fields. And if construction jobs go mainly to white males who already dominate the construction trades, many people who need jobs the most -- women, minorities, and the poor and long-term unemployed -- will be shut out.

That from Labor Secretary, Robert Reich’s blog. We commend Mr. Reich for not beating around the bush or mincing words when it comes to the nature and objective of the stimulus package. When your party is calling the shots in the House, Senate and Oval Office, you can speak plainly and leave the hopeful rhetoric to the boss.

Never mind the inherent bigotry in Reich’s post, is what he is claming actually true? He provides no evidence that whites are the predominant race in the construction trade so we will come up with some figures ourselves. Faithful commenter Road Dawg has worked in the commercial contracting/construction field for the past 20-25 years and guesstimates that the labor pool in the construction industry here in SoCal is 40/60 whites to minorities. Also, one of ‘Dawg’s pups is the only white kid in a construction apprentice class of 20. And here in San Diego, the shipbuilding and repair industry among the trades runs about 30/70. Anecdotal numbers to be sure but numbers just the same that suggest Reich’s breezy assumption and thus justification for the quota approach to the Great Stumble Sideways, doesn’t square with reality.

But let’s not get off point, here. Whether or not whites dominate the construction labor pool is beside the point to the reality of the obvious social engineering that is the motive behind the infrastructure improvement plans of the stimulus package.

Later in the post Reich claims that many low-income/low-skilled workers could be put to work immediately in providing home and businesses green technology and infrastructure upgrades:

People can be trained relatively quickly for these sorts of jobs, as well as many infrastructure j0bs generated by the stimulus -- installing new pipes for water and sewage systems, repairing and upgrading equipment, basic construction -- but contractors have to be nudged both to provide the training and to do the hiring.

Of course, this in non-sense. The typical apprenticeship program in the construction industry is 4 years, so in the meantime we will have roads, bridges and sewage systems built/re-built by unskilled labor. What could possibly go wrong?

And we thought the use of the word “nudged” was charming as well. In the very next paragraph we find that “nudged” means “all contracts entered into with stimulus funds require contractors to provide at least 20 percent of jobs to the long-term unemployed and to people withincomes at or below 200 percent of the federal poverty level. And at least 2 percent of project funds should be allocated to such training… which must be fully available to women and minorities.” Wink-wink… nudge-nudge.

And who will do the vetting to make sure there is the proper of numbers of women and minorities among the labor pool of a bidding contractor? Another bureacracy or even an existing one who will, no doubt, be as transparent and forthcoming in its selection criteria as the Treasury Department is currently with regard to dispersal of TARP money?

You know, we wanted to give it a break for a week. We wanted to just relax and take in the historical significance of what happened this past Tuesday… but we can’t. We can’t because of people like Robert Reich whose own transparency betrays the utilitarian and pragmatic goals of the stimulus plan as pitched to us by the President.

P.S. With respect to gender set-asides and quotas, it should be noted that men have been hit harder than women by this recession.

P.P.S. Of all people, the Labor Secretary should know there are scads of set-aside and minority-hiring provisions already on the federal aquisition books. The fact that Reich is pushing for even more, again, speaks to the true motives of the stimulus plan.

H/T: Hot Air

Needlessly jumping the gun

It appears our criticism of Nancy Pelosi’s $825 billion stimulus plan was a bit misguided. We were thinking that, perhaps, The Great Stumble Sideways and its promise of rebuilding America’s broken infrastructure would get bogged-down in bureaucratic red tape, union rules and environmental regulations, not to mention the fact that it would be a prime source of patronage and pork.

Well, KT points out that only $30 billion of the stimulus plan (4%) is actually going to build roads and bridges. Whew. That’s a relief. And here we thought that this work-for-work’s sake plan was just going to be a bloated exercise in governmental activism.

And what about the other 96%, you ask? Read where the rest is going, here.

Significant of Nothing

Contract requirements allowed a maximum completion time of 140 calendar days with a penalty for late completion of $205,000 per calendar day and an incentive of $200,000 per day for early completion. Contract time commenced on Saturday, the 5th of February, with materials and equipment moving to the jobsite that day and through the weekend. Even though the final construction plans were not available until February 26th, C.C. Myers, Inc. immediately went to work on a 24-hour-day, 7 days-per-week schedule with up to 400 workmen on the job, while maintaining a safety record that even surpassed C.C. Myers, Inc.'s AGC award-winning program.

That summarizes the Herculean task undertaken and achieved by the construction company C.C. Myers in opening the world’s busiest road, the Santa Monica Freeway in Los Angeles that had been destroyed by the Northridge quake in 1994. Work was completed in 66 days…. 74 days ahead of schedule!

And the dirty little secret that no one ever wants to talk about is that this was accomplished, or rather expedited because then-Governor Pete Wilson relaxed the normal procurement and permitting regulations and waived environmental impact reports while implementing a bidding procedure and incentive system that tied potential profits to a successful on-time/ahead-of-time completion of the freeway.



In other news yesterday, Nancy Pelosi unveiled the House’s own version of the Great Stumble Sideways or This Old House (still haven’t settled on one yet) and not to be outdone by Obama, it comes with a price tag of $825 billion, a cool 50 bil over Obama’s projected stimulus plan cost.

We bring up the former as an example of quick, hard-hitting and smart decision-making and management practices as a juxtaposition to the opposite that this stimulus plan will be.

Is it really possible that a Congressionally-conceived and administered jobs program will waive environmental impact reports? Can you imagine Democrats signing off on relaxing overtime restrictions above union objection or establishing work-arounds for long and laborious open-bidding processes?

As President-elect Obama is soon to find out, there are a few specific reasons why nothing ever actually gets built here in California anymore and with Big Labor and Big Green both wanting to take responsibility for Democratic gains over the last couple of years, there are a few constituencies that will be looking for a little payback.

Then again, when actually building something is not really the end but rather the means to a 2, 3, 4 million man and woman jobs program, work for work's sake if you will, who the hell cares?

Keynes Kids

Perhaps the reason why Keynesian economics doesn’t work so well is that practitioners of Keynesian economics aren’t particularly Keynesian.

Our interpretation of at least one aspect of the Keynesian economic model is that during economic slumps, the Government will engage in huge spending programs to inject money back into the economy. That deficit spending where the government is spending more than its taking in, “deficit spending”, is offset where the government was running a surplus during the good times.

Well, the first half of that equation is easy enough, isn’t it? Who doesn’t like to spend? It’s that second part of the equation that’s just so damn difficult.
Look at the bind Hugo Chavez is in. With oil prices plummeting, Venezuela is facing 40% inflation and a rapidly shrinking budget surplus. Chavez built his economic model around the assumption that oil prices would stay high – $125/barrel – vs. the $34/barrel it is now and the populist goodwill he had built up with the masses via his soup kitchen Socialism is rapidly disintegrating as the masses don’t want to hear about global markets, the unpredictability of oil prices or any other such non-sense.

(This is in stark contrast to the State of Alaska, another petrol-state, if you will, whose governor made it a priority to “save for a rainy day” in managing the state’s oil bonanza)

So, as the train has already left the station here with our myriad of bailouts and where we will soon be embarking on a $1 trillion stimulus plan road trip, we are in decent shape because of the dot.com boom in the 90s and the strong GDP showings in the middle of this decade that has our national piggy bank bursting for this, our rainy day, right? Oooops….

This nation is currently in debt to the tune of 10 times the amount of President-elect Obama’s stimulus package (or as David Brooks of the New York Times refers to this glorified maintenance/overhaul public works program, "This Old House") with no real plan on who’s going to pay for it. But when you are talking sexy… sexy like giving the country a new coat of paint, you leave all the hum-drum and mundane questions of financing and debt to other people, like this:



So, why cast off a questionable economic theory that has only led to disastrous practical applications when your glorified deferred maintenance program becomes, in reality, a deferred responsibility program? Thanks, kids!

Warning: Bi-partisanship Ahead

As the sign would suggest, Congress is back in session and the President has a looming(?) recession on his hands so what better opportunity for everyone to put aside this counterproductive and nasty partisanship than to join hands and slop at the trough!

.

Article here from the AP documents the White House’s willingness to work with a Democrat-controlled Congress and visa versa in cobbling together a stimulus package. And why shouldn’t everyone put aside their differences…? From the way this package is shaping up, there’s something in here for everybody: tax cuts for the Republicans and unemployment benefits for the Democrats to name a few.

We don’t know how we feel about this rebate business. Look, don’t get us wrong – less money in their pockets and more money in ours is always a good thing its just that we feel cheapened, used…. Like we are being paid-off in return for some unbeknownst service that we performed. My g*d… so what did really happen last night?

And as we’ve commented before, we understand the compassion and sentiment behind the unemployment benefits but being fairly astute judges of human nature, we don’t think it takes an economist to figure out that extending unemployment bennies only extends unemployment. Wait, maybe it does. Read here.

In fact, if we’re getting our rebate from the general till and these unemployment bennies are also from the till then who’s paying for all this? Pffft. You know, who cares? They’re all playing nicely together in DC right now and that’s all that matters. Take your rebate and just shut-up. Hooray, bipartisanship!

KT, has some thoughts on stimulus here.