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About Obama's Newest Jobs Argument

Obama and his people are trying to distinguish now between private sector and public sector job growth.  The number they have decided to tout is 4.3 million private sector jobs somehow “created” by Obama since he took office.  The argument is, if it wasn’t for cold-hearted Republican officials in state and local governments cutting government jobs, the jobs numbers wouldn’t be so bad.  This was the argument Obama was trying to make in his now infamous comment that, “the private sector is doing fine.”

It is hard to know if Obama is this bad at economics or if he is purposely misleading the public.  Regardless, the argument has little merit if considered beyond its face. 

Since the public sector does not produce wealth, the public sector must rely on taxing the private sector to fund its activities; tax revenues pay the salaries of government workers.  So when the private sector falters, state and local governments have less money to employ people.  Put another way, if the private sector really was “doing fine,” the public sector would be as well.   

What Obama is advocating is a temporary bailout of the public sector—federal money to hire more bureaucrats at the state and local level.  The federal government, however, is also reliant on the private sector for tax revenue.  Even when the feds borrow what they spend, they are stripping the private sector of the capital needed to grow the economy.  And the only way jobs are coming back—in either the private or public sector—is if the economy starts growing again.  My guess is that won’t happen until sometime after November 2012


Explain This to Me

Obama is out with a new campaign ad attacking Romney's record as a private equity buyout specialist.  The ad uses this ominous line:  

"In Romney’s economic philosophy, CEOs and wealthy investors prosper by any means necessary, even when it meant companies failed and workers were left behind."

If this really is "Romney's economic philosophy", I would like him to explain it to me.  How could a CEO or wealthy investor prosper by investing in a company and causing it to fail?  Seems to me that is a pretty difficult task: making money bankrupting your own companies. Last I checked, investors--especially value investors like Bain--invest in companies to make them better, not to cause them to fail.

Maybe Obama is just projecting.  His economic philsophy is one that encourages failure and discourages production.  And his campaign could be hoping America's economic failure produces electoral prosperity.  The more people relying on government handouts, after all, the more people likely to vote in Obama's favor.  



Doubling Down on Failure

As I noted a few days ago, the press is finally admitting the failure of Obama’s “Green Jobs” agenda. Apparently, taxing the productive sector of the economy to fund the pipedreams of big labor and the Huffington Post is not a good idea.  Here is the latest on the failure of the Green Jobs Con:

From Seattle Pi: 
Last year, Seattle Mayor Mike McGinn announced the city had won a coveted $20 million federal grant to invest in weatherization…McGinn had joined Vice President Joe Biden in the White House to make it. It came on the eve of Earth Day. It had heady goals: creating 2,000 living-wage jobs in Seattle and retrofitting 2,000 homes in poorer neighborhoods.  But more than a year later, Seattle's numbers are lackluster. As of last week, only three homes had been retrofitted and just 14 new jobs have emerged from the program.
That is $1.5 million per job if anybody is counting.  At least that’s better than what happened in Michigan and Massachusetts:

From the Washington Times
The president recently toured Johnson Controls Inc., a Michigan company that received $300 million from “Obama’s stash” to create - drumroll, please - a whopping 150 jobs. Do the math: That’s $2 million per green job. And this is the company the White House chooses to showcase? Evergreen Solar, a Massachusetts company, also received stimulus money, but the White House that is “the most open and transparent in history” won’t say how much, only that Evergreen is “hoping to hire 90 to 100 people.” Instead, it declared bankruptcy and shipped 800 jobs overseas. Well, so much for green jobs.
Here’s more from Stephen Moore at the Wall Street Journal:
In the 2009 stimulus, the feds gave nearly $3.2 million in green-energy grants to my county of Arlington, Va., with almost $300,000 used to install solar paneling on the roof of our local library. (Don't ask why the feds are giving one of the five wealthiest counties in America free money.)
Arlington officials boast the project will save $14,000 in annual electricity costs, but the solar panels have a life span of no more than 10 to 15 years. So the feds spent $300,000 to shave at most $150,000 off the net present value of Arlington's electric bills. Some 3,000 counties across the country received federal funds for the same kind of negative-return energy conservation "investments." This is the kind of "clean energy" program the administration wants to expand.
As if the news couldn’t get worse, Solyndra, a solar energy company praised by the Administration (and coincidentally backed by a billionaire Democrat campaign donor) recently announced plans to file for bankruptcy.  The company’s bankruptcy is despite a $535 million loan underwritten by the American taxpayer.

It may be news to the dear taxpayer that his investments are doing so poorly.   But hope and change—like everything else on earth—must answer to the laws of economics.  From the results of the Green Jobs failure, it now should be clear the state cannot create a sustainable market by fiat.  Obama, however, has not gotten the message nor retreated from his mystical belief in government interference. Here’s White House spokesman Eric Schultz doubling down:

"While we are disappointed by (the bankruptcy of Solyndra), we continue to believe the clean-energy jobs race is one that America can, must and will win."

There is no clean-energy jobs race in this country—only a race to see who can waste money the fastest. Instead of throwing good money after bad, let’s focus on growing our economy and expanding free enterprise and let the Europeans and the Chinese waste money on unproven green technologies.  In the unlikely event they develop something we don’t have or can’t produce, it won’t be a loss to us.  We can use the money we saved from debacles like Solyndra to buy the technology while our private sector catches up. 

NYT Agrees with Lasting Liberty on Green Jobs

In an article last August in Lasting Liberty, I responded to the popular push for "green jobs" with skepticism. The government could not and would not create jobs by promoting a pet industry, I wrote, only legitimate market forces could create sustainable jobs.

It took the New York Times a year to acknowledge I was right.  From an article in the 18 August 2011 issue:

...the green economy is not proving to be the job-creation engine that many politicians envisioned. President Obama once pledged to create five million green jobs over 10 years. Gov. Jerry Brown promised 500,000 clean-technology jobs (in California) by the end of the decade. But the results so far suggest such numbers are a pipe dream...Federal and state efforts to stimulate creation of green jobs have largely failed, government records show.

Not only has the green jobs push failed to create jobs, it has been a huge waste as well:

Two years after it was awarded $186 million in federal stimulus money to weatherize drafty homes, California has spent only a little over half that sum and has so far created the equivalent of just 538 full-time jobs in the last quarter, according to the State Department of Community Services and Development.

According to these numbers, this program spent well over 170,000 USD per full time job created.

Of course, the Times doesn't explicitly acknowledge the real problem--that being, that the market economy and individual consumers are not so easily manipulated.

The problem isn't economics, according to "advocates and entrepreneurs" the Times interviewed. The problem is with government.  Washington, they contend, didn't do enough to pass cap and trade and tighten environmental regulation.  More government intervention, they contend, is the answer. Isn't it always?

This ideological thinking is why in Obama's September jobs speech we aren't likely to hear the President admit his green jobs plan has failed.  He's more likely to double down on his mistake.


Speaker-Elect John Boehner's Election Night Speech Sets Perfect Tone

The speech in full:

Thank you.

Thank you Pete Sessions, for your tireless leadership. 

And thank you to all our candidates, supporters, and volunteers who have worked so hard to make this moment possible.

Let me just say this: it’s clear who the winners are tonight, and that’s the American people.   Your voice was heard at the ballot box!  Your voice! 

Listen, I’ll be brief, because we have real work to do – and this is not a time for celebration … not when one in 10 of our fellow citizens are out of work … not when we have buried our children under a mountain of debt … not when our Congress is held in such low esteem. 

This is a time to roll up our sleeves.  To look forward with determination.  And to take the first steps toward building a better future for our kids and grandkids.  

Across the country right now, we are witnessing a repudiation of Washington … a repudiation of Big Government … and a repudiation of politicians who refuse to listen to the people. 

Of course, this campaign is not yet over.  To folks out in the West, where the polls are still open, seize this opportunity to be heard … to reject the spending sprees, the bailouts, the backroom deals, the takeovers and all the nonsense … and to join your fellow Americans in putting Washington on notice.

Because for far too long, Washington has been doing what’s best for Washington – not what’s best for America.

Tonight, that begins to change.  

With their voices and their votes, the American people are demanding a new way forward in Washington.  And I’m here tonight to tell you that our new majority will be prepared to do things differently… to take a new approach that hasn’t been tried before in Washington – by either party. 

·         It starts with cutting spending instead of increasing it. 

·         Reducing the size of government instead of expanding it.

·         Reforming the way Congress works and giving government back to the people. 

·         And for all those families asking ‘where are the jobs?,’ it means ending the uncertainty in our economy and helping small businesses get people back to work. 

The people’s priorities will be our priorities.  The people’s agenda will be our agenda.  This is our Pledge to America … this is our pledge to you!

While our new majority will serve as your voice in the people’s House, we must remember it is the president who sets the agenda for our government.  The American people have sent an unmistakable message to him tonight, and that message is:“change course.”  

We hope President Obama will now respect the will of the people, change course, and commit to making the changes they are demanding.  To the extent he is willing to do this, we are ready to work with him.  

But make no mistake, the president will find in our new majority the voice of the American people as they’ve expressed it tonight: standing on principle, checking Washington’s power, and leading the drive for a smaller, less costly, and more accountable government. 

These are the principles our new majority will stand for, and we hope you will stand with us in the hard work that lies ahead.  Because we are humbled by your trust in us.  And we recognize that with this trust comes the responsibility to listen, and listen we will.  

Let’s start right now by recognizing this is not a time for celebration.  This is a time to roll up our sleeves and go to work. 

We can celebrate when small businesses are creating jobs again.   

We can celebrate when the spending binge in Washington has stopped.  

And we can celebrate when we have a government that has earned back the trust of the people it serves … when we have a government that honors our Constitution and stands up for the values that have made America, America: economic freedom, individual liberty, and personal responsibility. 

I hold these values dear because I’ve lived them.  I’ve spent my whole life chasing the American Dream. 

I started out mopping floors, waiting tables, and tending bar at my dad’s tavern.  I put myself through school working odd jobs and night shifts.  I poured my heart and soul into a small business.  And when I saw how out-of-touch Washington had become with the core values of this great nation, I put my name forward and ran for office.

So I want to close by thanking my wife, Debbie … my girls, Lindsay and Tricia … my brothers and sisters … and all my friends and neighbors in Ohio for giving me the chance to serve and the opportunity to stand before you now ready to lead.

Thank you.  God bless you, your families, and the United States of America.