This is a suggestion for an enormous make work program, not anything that would remotely stimulate the economy. Indeed, if the decade long Great Depression is any guide, New Deal make work programs prolonged an economic downturn that should have only lasted a couple years.

Moreover, the idea that social workers, teachers' aides, nurses' aides, case workers, playground attendants, day-care workers, home care workers, senior centers, after-school programs, athletic leagues, music, and art lessons "are not luxuries" but instead are "investments that can make the U.S. economically competitive as we confront an increasingly dynamic global economy" has no basis in economic reality.

So long as we are not building more bridges to no where, infrastructure investments at least have the potential to make our businesses more economically competitive. Government health care, after school programs, midnight basketball programs and the like do not.
 

Yes, let's attend to the type of infrastructure that will make DUI legal representation "more economically competitive" - and lucrative - rather than social programs that might merely reduce the number of "alleged" people who drive on the infrastructure and kill and maim others (as well as themelves) after having imbibed on alcohol, which is not a luxury but a dependency.

Once again little Lisa's bro revises the New Deal as merely "an economic downturn that should have lasted only a couple years." Once again little Lisa's bro is blowing through the wrong end of her saxophone, with his not so subtle pre-emptive efforts at right wing preparation to dump on President Elect Obama even before he takes office with the theme that the current economic crisis is not as bad as the Great Depression and should last less than just "a couple years." Little Lisa's bro's backpack of lies is like a neocon cornucopia that keeps on revising.

By the way, shouldn't the Iraq War have "only lasted a couple years" and not longer than WW II? Oh, that's right, it was a short war when George W announced "Mission Accomplished;" the aftermath is mere clean up. And let's not talk about Afghanistan's even longer war.
 

Shag:

If Mr. Obama's genuine purpose is to enhance economic growth and that claim is not simply a lie to sell government growth, then one would assume that he wishes to implement policies that actually enhance economic growth.

Government health care and make work government jobs do not make our business more competitive and enhance business growth. The effect is quite the opposite as we divert hundreds of billions of dollars in business investment capital to finance these luxuries.

If concentrated on items that actually impact business and trade, infrastructure improvements have the potential to make our business more competitive and enhance business growth in the long term. However, they will do nothing to pull us out of a recession as demonstrated by the New Deal and the frequent recessions during the 50s when the interstate system was being built.

If Obama is serious about enhancing business growth, he should reduce the operating costs on business imposed by government to free up money to invest and hire employees. Reagan did this in 1981 and the economy was booming two years later.

Unfortunately, I have no great faith that Obama or the left are at all serious about economic growth. Rather, as demonstrated by Professor Dudziak's post, the left is simply making the mother of all wish lists for their preferred expansions of government.

This small business owner who has to live with the consequences sincerely hopes Mr. Obama proves me wrong. However, for now, my money is staying out of the markets and thus not being invested in business growth in a vote of no confidence. I am not alone.
 

"Stimulus plan could be mother of all 'Christmas tree' bills:"
 

This small business owner who has to live with the consequences sincerely hopes Mr. Obama proves me wrong

Proving you wrong really isn't all that difficult. You should set the bar a little higher.
 

"Proving you wrong really isn't all that difficult. You should set the bar a little higher."

So that little Lisa's bro would crawl UNDER the bar?
 

So that little Lisa's bro would crawl UNDER the bar?

# posted by Shag from Brookline : 2:19 PM

Over or under, it does not matter. No matter how much of a beating he takes, it does not stop him from declaring "MISSION ACCOMPLISHED."
 

"Bah! Humbug!" said the Scrooge of Woodland Park.
 

However, for now, my money is staying out of the markets and thus not being invested in business growth in a vote of no confidence. I am not alone.

# posted by Bart DePalma : 10:24 AM

Over the last 5 years everything you have touched has turned to shit. If I had money in the market I would be thrilled to hear this news.
 

See what I mean about trolls? Bart has posted three comments on this blog post; correct or incorrect, all three were responding to the post. Three of the usual suspects around here have posted six comments; all six of them constituted unresponsive personal attacks on Bart.

Though, frankly, it's not difficult to see why; the post itself was rather hard to defend. If the purpose of the proposed federal spending is economic stimulus, then one would think (hope!) that the recipients of the largess would be chosen not based on the simplistic notion that gender or racial balancing constitutes "fairness," but based on how effective the spending would be at stimulating the economy. I mean, if someone can make the case that hiring school nurses is actually "equally important to a vibrant economy" as building bridges, great. But that case needs to be made on economic terms, not on complaints that there aren't enough female construction workers and so it isn't "fair" to spend so much on construction projects.

(I accept, for the sake of argument, the notion that federal stimulus packages actually are what the economy needs.)
 

David, if you don't like trolls, tough shit. Bart isn't leaving.
 

simplistic notion that gender or racial balancing constitutes "fairness," but based on how effective the spending would be at stimulating the economy. I mean, if someone can make the case that hiring school nurses is actually "equally important to a vibrant economy" as building bridges, great

This sounds more like a hobbyhorse than an actual response to the actual post. Yes, "balancing" was addressed, but it was but a small aspect of a post most generally about equality and the role of women overall.

The argument was that women have an important role in said vibrant economy, but that past actions did not properly deal with the fact or did so in discriminatory ways.

Putting aside that health care IS a fundamental issue in a vibrant economy, why you focus on this job in particular is unclear.

Finally, equality is an important aspect of this nation, so if we are going to have a major economic stimulus plan, it should be a concern, especially given disfavored groups often are economically so as well.
 

Mr. Nieporent,

Though, frankly, it's not difficult to see why; the post itself was rather hard to defend. If the purpose of the proposed federal spending is economic stimulus, then one would think (hope!) that the recipients of the largess would be chosen not based on the simplistic notion that gender or racial balancing constitutes "fairness," but based on how effective the spending would be at stimulating the economy. I mean, if someone can make the case that hiring school nurses is actually "equally important to a vibrant economy" as building bridges, great. But that case needs to be made on economic terms, not on complaints that there aren't enough female construction workers and so it isn't "fair" to spend so much on construction projects

All true to a degree, but the point of the article didn't seem to be so much about fairness, but about the realities of the distribution of gender across the workforce. If we hype up importance of construction-related stimulus, at the expense of other social investment, then not only do we fail to improve vital areas of the economy and national importance (education and healthcare), but women will be disproportionately excluded from the stimulus. At that point, the factual statement that families rely upon female-generated income more than ever before is key - it isn't necessarily about the fairness of distributing opportunity to men instead of women, but the inefficiency and negative actual economic effects such a distribution would have. If the money is targeted at projects where women aren't, there is no income going to those families. Pragmatically, does that result in a wise package that will actually improve the economy, or should the money be more widely targeted to stimulate more than just the construction field?

I would tend to agree school nurses may not be the most obviously logical choice for receipt of stimulus, but there are numerous benefits, both long term and short term:
1) kids may stay healthier, costing less in the long run in medical care, avoiding inefficiencies in the medical sector with unnecessary emergency room visits, etc, which also results in less efforts at collection, and less income directed at preventable medical costs.
2) kids will be better cared for, and hopefully grow up healthier, which allows for a more productive workforce in the future.
3) broad stimulus will put money in the hands of more people, which may result in more confidence and more spending. Even if you can get a construction job that pays well, if your nurse neighbor is going into foreclosure, you are psychologically less inclined to spend since you see so many others with tough times, you suspect you may be next. If everyone in your neighborhood is doing better, you'll have less fear. While it can be demeaning when said by some, there is a psychological component to the recession that fuels the vicious cycle that leads to depression. Although there are more tangible things that must also be done, there is no reason not to treat every cause of the crisis.
4) socially, there is a huge problem in the schools with malnurished and unhealthy children. This results in increased health care costs to society as a whole, which removes money that could be utilized more productively. A little off topic of the nurses issue, school lunches are absolutely critical, and it really is unfathomable to me personally just how many children eat their only meals at school. Nurses may help identifying problems like this, and perhaps assist in creating solutions to child hunger in America.

Overall, nurses are a great long term investment. Further, as stated above, with the dependence on female income for households at a level unprecedented in our history, ignoring the unequal distribution of females in the workforce has practical, and not just moral, ethical, or fairness-based consequences.
 

I think the letter is a very good example of what historians can add to modern policy debates. As a legal historian, I generally think that folks in our biz should be modest in our ambitions to apply "lessons of the past" to current political debates. But cautions about avoiding the gendered nature of public works projects then and (proposed) now is a good example of doing this well.

I also agree with David N. that it's disappointing that so many of the comments were directed at Bart and not the original post. At risk of compounding that error, I'll respond to one argument Bart makes in an attempt to defend the article. Public health care is very much indeed part of business competitiveness. We have only to look at the costs for the U.S. auto companies that have undertaken to provide for the health care of their retirees. Avoiding the situation where companies place themselves at an economic disadvantage if they provide decent health care is both good for the economy and good for the individual businesses that are shouldering more than their share of the burdens.
 

This comment has been removed by the author.
 

jslater said...

Public health care is very much indeed part of business competitiveness. We have only to look at the costs for the U.S. auto companies that have undertaken to provide for the health care of their retirees. Avoiding the situation where companies place themselves at an economic disadvantage if they provide decent health care is both good for the economy and good for the individual businesses that are shouldering more than their share of the burdens.

Our current public health care system is primarily financed through taxes on the wages employers pay their employees. Where do you think that an expansion of public health care will derive its funding?

Obama has already told 95% of individuals he will cut their taxes. The upper 5% can't pay the entire freight, so Obama will be coming after business again.

Imposing higher costs on business during a recession is hardly an economic stimulant.
 

nerp:

1) You make a good point concerning the lack of stimulative effect of infrastructure construction. Unemployed workers from the financial, auto, manufacturing and retail sectors do not have the skill set, desire or in many cases even the physical fitness to build roads and sewers. Instead, illegal immigrants are far more likely to be filling these labor intensive positions, leaving a large percentage of citizens unemployed.

2) There is already an enormous demand and very high pay for nurses. There is hardly any need for the government to subsidize nurses.

3) The government health insurance plan offered by Mr. Obama to be financed completely through added debt will remove investment capital from the economy and slow growth. Folks are not unemployed because they are unhealthy and need Obama-care, they are unemployed because businesses lack the investments and income to employ them.
 

(sigh)
Mr. DePalma,

1) You make a good point concerning the lack of stimulative effect of infrastructure construction. Unemployed workers from the financial, auto, manufacturing and retail sectors do not have the skill set, desire or in many cases even the physical fitness to build roads and sewers. Instead, illegal immigrants are far more likely to be filling these labor intensive positions, leaving a large percentage of citizens unemployed.

Of course, I didn't make that point. My point was to stimulate only one sector is not efficient nor beneficial to the overall economy. Infrastructure construction is one of the best uses of public money, and can stimulate further growth by giving people jobs, and stabilizing the economy. Perhaps the greatest government project ever was Eisenhower's Interstate System, which greatly benefited the efficiency and growth of the economy. However, stimulating only the construction and infrastructure sector leaves a lot to be desired, as other necessary components of the economy will suffer. Unemployed workers in the auto and manufacturing sectors could very well find (at least temporarily) a home in the infrastructure construction field. Illegal immigrants are unlikely to fill these positions, because the wages will be high enough that citizens will be interested, and the lack of employment possibilities currently in the economy will allow demand to be high for these jobs. Illegal immigrant employment is typically fueled by lack of demand and low wages for jobs, in tandem with illegal business practices by employers. Big business is pretty hush-hush about it because they wanted the low wage workforce in order to squeeze out more profits, and because there was sufficient work for Americans to choose other lines of work. Condition two is no longer true, and the federal government will not permit contractors to hire illegals with federal money. Please avoid misstating my points, I would hate for others to think that is an accurate reflection of what I said.

2) There is already an enormous demand and very high pay for nurses. There is hardly any need for the government to subsidize nurses.

School nurses are obviously different, since they are paid by the local school district, and are one of the first jobs on the cutting block. We were not discussing private hospital nurses.

3) The government health insurance plan offered by Mr. Obama to be financed completely through added debt will remove investment capital from the economy and slow growth. Folks are not unemployed because they are unhealthy and need Obama-care, they are unemployed because businesses lack the investments and income to employ them.

People are currently unemployed because consumer demand is down due to overstretched households and a credit confidence crisis that has resulted in low lending. Money is actually everywhere – investors are scared due to potential defaults. These effects have caused a cyclical effect, whereby the recession propagates itself as the house of cards falls. However, as you have made clear that you believe Fannie and Freddie are responsible for this situation, I don't expect you to accept or understand that. Investment capital will not be removed form the economy, as currently investors want dollars at 0% (and less on the secondary market). In other words, investors don't want to put there money anywhere but in treasury bonds. There actually has never been a better time for the federal government to borrow – demand is astronomical, interest on the debt is nill, the economy needs stimulation, and there are infinite problems to fix.

Anyone who supported the Iraq war and the Bush tax cuts is not allowed to complain about programs “financed completely through added debt.”

The American economy is at a business disadvantage because we do not have a nationalized health insurance system. Unfortunately, with that particular service, the free market fails. I think health insurance situation in this country demonstrates that the free market is unable to efficiently allocate resources in that particular market. Quite the opposite of what you are saying, I think government has shown it is the more efficient operator in that market, and should take it over. I’ll give you an overview of my theory

1) the basic purpose of the free market is to allow for an efficient distribution of goods and services from suppliers to those who demand the goods or services.

2) in the run-of-the-mill situation, consumers demand widgets. Widget makers compete to provide various widgets of various quality, in order to meet the demands of the consumers. Consumers are willing to pay for the widgets because they want them. The key here, to me, is the widget makers and the consumers interests are aligned - widget makers want to sell to consumers, consumers want to buy.

3) in the health care context, the consumers who have the highest demand are the ones the suppliers DO NOT want to supply with insurance. The consumers who have the least desire for insurance are the ones whom the health insurers want to provide. Heath insurers do not want to provide preventative care, because they fear people will use it often, thus reducing their profit margins. They do not want to provide coverage for catastrophic care, since it is expensive, but they can try to use policy language to get out of it when it does happen. They don’t want to cover the preventative care because of the repetitive costs, even though that kind of care may prevent the catastrophic coverage later. Basically, the suppliers and the consumers interests are not aligned - they are actually in opposition. This, imho, does not make for an effective and efficient market.

4) also, in a broader sense health insurance has a huge effect on the economy and on individuals. Here are a few effects i can think of off the top of my head:
a) those with insurance are billed less than those without, making health care more expensive for those who can less afford it, and cheaper for those who can.
b) insurance benefits through employers plays havoc on the labor market, by distorting and deincetivizing employee movement to more efficient jobs. If a person must always fear the change in health insurance from a new job - less benefits, wrong doctors in plan, higher premiums - it prevents the worker from taking a job that would be a better use of his or her skills and would create a higher GDP through efficient reallocation of labor. It makes it harder for small business to compete. It also makes entrepreneurship more risky.
c) it puts the US at a competitive disadvantage vis-a-vis the rest of the world, as nationalized health care in other countries keeps labor costs cheaper than here. Ask the auto companies if they would like nationalized health insurance right about now.
d) it creates an inefficient incentive for those without insurance to either put off care until it is extremely serious and expensive, or come into the extraordinarily expensive emergency room for every minor issue. Then these huge bills don’t get paid, and the hospitals have to increase fees in other areas to make up the shortfall. The only other option is to deny emergency care to human beings, something which is morally and politically repugnant.
e) following up on b) it also results in inefficient allocation as younger workers and single people will be willing ot take jobs with poor plans, and older people and families will stay with strong plans. The inability to move laterally distorts the efficiencies supposedly created by the free market.
f) entrepreneurial enterprise is benefited, since an extreme competitive disadvantage vis-a-vis more established companies is eliminated, allowing those start-ups to better compete for workers, and lowering entrance costs.

Businesses are better off not having to pay for these inefficient costs, and the economy as a whole would probably benefit from the burden of health insurance being lifted off the back of employers. Investment capital can be more appropriately directed at other sectors, which will result in a net benefit to the economy.

I don't think national health care will stimulate the economy, per se. But it certainly will assist in making the US economy more competitive and efficient, and is an excellent long term investment. (As is investment in our school children's health.) But that wasn't really what I said anyway, this had to do with school nurses, and not neglecting to take the distribution of the genders in the workforce into account. But I digress...
 

Nerp:

The American economy is at a business disadvantage because we do not have a nationalized health insurance system.

:::chuckle:::

The US economy is already more competitive and efficient than nations with government health care.

The Big Three are not in deep straights because they offer health insurance, but rather because they offer far more than their competition.

I don't think national health care will stimulate the economy, per se. But it certainly will assist in making the US economy more competitive and efficient, and is an excellent long term investment.

Care to present evidence of that correlation? Has any nation that adopted government health care experienced a concurrent spike in economic growth? To the contrary, the welfare states of the EU have been left in our dust for decades.

Unfortunately, with that particular service, the free market fails.

We have not had anything close to a free market in heath care where consumers pick and choose between medical services based on cost effectiveness for decades. Medical care has been nearly completely socialized through private and government insurance.

I have been arguing for years that the medical industry needs to move more not less to the free market. The medical savings account when done right does the trick. Only preventative and catastrophic care are socialized through insurance. For everything in the middle, the health care consumer and the government or employer jointly contribute money into a MSA. The consumer decides what to spend his MSA on and then can either keep the remainder or allow it to roll over to the next year for future medical costs or eventual retirement. The key here is that the health care consumer finally has to weigh the benefits of the care against its costs and alternative uses for the money as a consume does for nearly every other good and service in the economy.

Forbes did this for his magazine and health care costs to the business dropped significantly. My wife is now enrolled in a similar plan with her employer.

those with [health] insurance are billed less than those without, making health care more expensive for those who can less afford it, and cheaper for those who can.

The uninsured usually do not pay their bills and the difference is made up through inflating charges to insurance.

People are currently unemployed because consumer demand is down due to overstretched households and a credit confidence crisis that has resulted in low lending.

Unemployment has been rising for a year while consumer demand has only recently dipped.

Money is actually everywhere – investors are scared due to potential defaults.

People invest in business in anticipation that those businesses will grow. However, when the government talks up increasing the cost of doing business by increasing taxes, regulations, the cost of capital by running up deficits and labor costs (card check union creation), then investors keep their money sidelined and the economy tanks.

Investment is all about confidence in the future. The government needs to be making this the most business friendly economy in the world and restore that confidence. Even if the economy stinks now, the prospect of a mid to long term future with lowered costs of doing business and concurrent larger profits will draw investment.

Anyone who supported the Iraq war and the Bush tax cuts is not allowed to complain about programs “financed completely through added debt.”

The war was financed entirely through reductions in marginal tax rates with resulting economic growth and concurrent double digit increases in tax revenues with hundreds of billions of added revenue to spare reducing the deficit.
 

The Big Three are not in deep straights because they offer health insurance, but rather because they offer far more than their competition.

No. The packages are very similar. The difference is that the Big Three have been doing business in the country longer and have a larger number of retirees.
 

PMS_Chicago said...

BD: The Big Three are not in deep straights because they offer health insurance, but rather because they offer far more than their competition.

No. The packages are very similar. The difference is that the Big Three have been doing business in the country longer and have a larger number of retirees.

Not even close.
 

Bart's legendary ignorance marches on. This latest link doesn't refute PMS' charge that legacy costs are the major difference between labor costs for Detroit vs Japanese manufacturers. The link also undermines Bart's claim that "socialized" health care is an impediment to productivity. According to the Bart's cite Japanese workers on average pay $190 per month in health care costs. That is a bargain by US standards, and the Japanese are kicking our ass in the world market.

The war was financed entirely through reductions in marginal tax rates with resulting economic growth and concurrent double digit increases in tax revenues with hundreds of billions of added revenue to spare reducing the deficit.

Delusional is too good a word for you, Bart.
 

This comment has been removed by the author.
 

Mattski:

Try reading the link for content. Specifically, look for the difference between the lifetime health insurance offered to current UAW members and the normal work life health insurance offered to non-union employees.
 

Not only did the tax cuts pay for themselves, but they paid for the war as well! Amazing, simply amazing. As for where this huge deficit came from in spite of it all, uh, blah blah blah Barney Frank.
 

Bart:

Try reading a full CRS report (rather than an editorial in Forbes) for content:

Big Three representatives say that they are unfairly burdened in competing with
both imports and domestic production from foreign-based automakers by their own
rising pension and health care costs. Though most are non-union operations, the
transplants also provide an equivalent level of benefits. But being newer investors
in the United States, they do not yet face a burden of health care and other benefit
costs, which have accumulated over the decades for the Big Three, as the number of
retirees increases. Moreover, the average age of current employees is higher for the
Big Three, and health care costs are correspondingly higher. Like some other longunionized
American industries, such as integrated steel mills, the Big Three face
aggressive non-union competition less burdened by these costs.
 

PMS:

I read the spin phrase you quoted. The devil is in the details of what they mean by "equivalent." The problem is that the actual figures do not show equivalent benefits.

Current UAW workers get lifetime health care, while non-union US employees do not.

Current UAW workers enjoy 95% of their benefits when layed off, while non-union US employees do not.

The CRS does not break down the other benefits of the current union and non-union workers for us to make a more detailed comparison.

As my link above demonstrated, the Japanese provide even fewer benefits to their own employees that they do for their non-unionized US employees.

No one is saying that legacy costs are not a major problem on their own for the Big Three. However, they too are part of the UAW contracts that need to be restructured.
 

Sweet is the memory of distant friends! Like the mellow rays of the departing sun, it falls tenderly, yet sadly, on the heart.
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