Tag Archives: Stimulus

Commentary

Private sector jobs are lost when government creates public sector jobs

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Here’s a story in National Review. (H/T ECM)

Excerpt:

In this paper, published in Economic Policy Journal, economists Yann Algan, Pierre Cahuc, and Andre Zylberberg looked at the impact of public employment on overall labor-market performance. The authors use data for a sample of OECD countries from 1960 to 2000, and they find that, on average, the creation of 100 public jobs eliminated about 150 private-sector jobs, decreased overall labor-market participation slightly, and increased by about 33 the number of unemployed workers.

Their explanation is that public employment crowds out private employment and increases overall unemployment by offering comparatively attractive working conditions. Basically, public jobs that offer higher wages, require low effort, and offer attractive fringe benefits attract many workers and crowd out private jobs. This is especially true when the public jobs exist in the private sector (transportation and education, for instance). The impact is bigger when these new employees are paid with new taxes.

The bottom line is that it is possible that, by increasing public employment, the stimulus money is further hurting private jobs.

And that’s why the unemployment rate is so high after a government spending-spree. The money for non-productive public sector jobs come from the productive private sector.

Commentary

First oil rig leaves USA for Egypt following Obama’s talk of drilling ban

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From the Houston Chronicle. (H/T Michelle Malkin)

Excerpt:

Diamond Offshore announced Friday that its Ocean Endeavor drilling rig will leave the Gulf of Mexico and move to Egyptian waters immediately — making it the first to abandon the United States in the wake of the BP oil spill and a ban on deep-water drilling.

And the Ocean Endeavor’s exodus probably won’t be the last, according to oil industry officials and Gulf Coast leaders who warn that other companies eager to find work for the now-idled rigs are considering moving them outside the U.S.

Devon Energy Corp. had been leasing the Endeavor to drill in the same region of the Gulf as BP’s leaking Macondo well, which has been gushing crude since a lethal blowout April 20.

But Diamond announced Friday it will lease the rig through June 30, 2011, to Cairo-based Burullus Gas Co., which plans to send the Endeavor to Egyptian waters immediately.

Devon is one of three companies that has cited the deep-water drilling ban in trying to ease out of contracts to lease Diamond rigs. Diamond, a drilling company, said it expects to make about $100 million from the deal, including a $31 million early termination fee it recovered from Devon.

Larry Dickerson, CEO of Houston-based Diamond, signaled that other of his company’s rigs could be relocated, too.

“As a result of the uncertainties surrounding the offshore drilling moratorium, we are actively seeking international opportunities to keep our rigs fully employed,” Dickerson said. “We greatly regret the loss of U.S. jobs that will result from this rig relocation.”

I went to sleep in the USA and I woke up in communist Venezuela.

You bash corporations, you lose jobs. Do you know what causes outsourcing of jobs? Attacking businesses with tariffs, regulations, lawsuits, and taxes. Environmental regulations, labor regulations, etc. That’s what causes outsourcing of jobs. If you want businesses to start here, to stay here and to move here from abroad, you create a business climate with low taxes, minimal regulations, and no unions. We should be drilling in ANWAR and building nuclear power plants, not kicking out oil rigs. We needed those jobs.

What about Obamacare?

From Investors Business Daily.

Excerpt:

“Independent experts have found that the new health law will increase the cost of health insurance and health care services,” the two doctor-senators say, noting the Congressional Budget Office concludes that “premiums for millions of American families in 2016 will be 10%-13% higher than they otherwise would be. This represents a $2,100 increase per family, compared with the status quo.”

Two thousand dollars more? Did something hidden in the 3,000 pages of the ObamaCare bill, which the White House and leading congressional Democrats moved heaven and earth to get passed, make those evil health insurers even greedier?

Or is it greedy Uncle Sam? As the senators point out, “According to an April 2010 memo from the Actuary of the Centers for Medicare and Medicaid Services, the medical device and pharmaceutical drug fees and the health insurance excise tax will generally be passed through to health consumers in the form of higher drug and device prices and higher insurance premiums, with an associated increase in overall national health expenditures.”

Add to that the fact that according to the Joint Committee on Taxation, much of ObamaCare’s new taxes will trickle down and end up being paid for by health care consumers. These include “the $60 billion tax on health plans, the $20 billion tax on medical devices and the $27 billion tax on prescription drugs.” Makes you wonder which party is on the side of the little guy.

Perhaps Obama was hoping that the businesses he is taxing would take the blame for the increases in premiums. That might have flown in the days before the Internet, but it doesn’t fly today. But it gets worse – much worse.

What about deficit-spending?

More from Investors Business Daily.

Excerpt:

Based on current estimates, today’s total federal debt of just over $13 trillion will hit $20 trillion by 2020. Beyond that, the coming retirement tidal wave of 65 million baby boomers will push Social Security and Medicare spending to stratospheric levels. America’s debts will become crippling.

By some estimates, total U.S. commitments for entitlements total $107 trillion over the next 75 years or so. That’s an unpaid tax bill of $912,000 per household, or $351,000 for each child born today.

[…]Today, the federal government alone is spending around 25% of GDP, compared with its long-term average of 18%. If expected massive deficits are closed with taxes rather than spending cuts, it will require a 25%-plus increase in the real size of government.

That won’t be the end of it. Absent serious spending cuts, spending will rise to 32% of GDP by 2030, Congressional Budget Office data show. At current levels, taxes on Americans would have to rise 78% to pay for all that spending. Ready for that?

By the way, when state and local spending are added in, government in a few short years will take up more than half of all U.S. GDP. In short, the U.S. is essentially on the road to becoming just another stagnant, state-run welfare economy.

Suppose you were a young man with a decent salary. Should you make the decision to get married and have children? Children who will owe hundreds of thousands of dollars because Obama had to buy votes using taxpayer money? I guess Democrats don’t want to be bothered with love, marriage and parenting. I guess Democrats just want a check from the government.

News

MUST-READ: Wall Street bankers gave Obama millions in campaign contributions

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Republican House Minority Leader John Boehner reports on Obama’s new bank bailout bill.

Excerpt:

President Obama likes to say we need to clean up Wall Street.  But let’s be clear: He is pushing a job-killing bailout bill for Wall Street that benefits his top financial contributor from the 2008 campaign – a firm that just happens to be under investigation by the SEC for defrauding investors.

Despite the President’s rhetoric, his support for the Democrats’ bailout bills gives big Wall Street banks a permanent, taxpayer-funded safety net by designating them “too big to fail.”

[…]Goldman Sachs, recently charged with defrauding investors, was President Obama’s top Wall Street contributor during the 2008 election cycle, donating nearly $1 million to his campaign.

  • Securities & investment firms in general were the fifth largest contributor to President Obama’s 2008 campaign, donating nearly $15 million.
  • Big banks also donated more than $3 million to Obama during the 2008 election cycle.

And some details about what the new bank bailout does:

  • The Dodd Gives Wall Street a Pre-Existing $50 Billion Bailout Slush Fund. Sen. Dodd’s financial bailout bill would create a $50 billion ‘orderly resolution fund’ ($150 billion in Rep. Barney Frank’s bill) that could be repeatedly replenished from industry assessment.
  • The Dodd Bill Gives Wall Street a Treasury-Backed Credit Line.  The FDIC would be authorized to borrow from Treasury up to the amount of cash left in the ‘resolution fund’ plus 90 percent of the value of the assets of any and all too-big-to-fail firms in its control.
  • The Dodd Bill Provides a Government-Guaranteed to Wall Street Debt.  The FDIC would be authorized to guarantee the debt of any solvent bank, bank holding company, or affiliate in any amount subject only to an aggregate debt limit set by the Treasury Department.
  • The Dodd Bill Institutionalizes Unlimited Wall Street Bailouts.  The FDIC, as the resolution agency for too-big-to-fail firms, would be given wide latitude to use resources to make payments to anyone in any amounts, at their own discretion.

Now let’s hear more about the rich bankers from Goldman Sachs.

Goldman Sachs

This Newsbusters article explains Goldman Sachs’ connections to the White House:

  • White House Chief of Staff Rahm Emanuel used to work for Goldman Sachs.
  • Treasury Secretary Tim Geithner used to work for Goldman Sachs.

And the Washington Examiner reports that:

  • Former White House counsel Greg Craig is now employed by Goldman Sachs.

Wall Street banks like Goldman Sachs are often filled with Democrats.

Fannie Mae and Freddie Mac

And don’t forget that the government-backed companies Fannie Mae and Freddie Mac were run by Democrats, and they were also bailed out by the Democrats.

Excerpt:

Freddie and Fannie used huge lobbying budgets and political contributions to keep regulators off their backs.

A group called the Center for Responsive Politics keeps track of which politicians get Fannie and Freddie political contributions. The top three U.S. senators getting big Fannie and Freddie political bucks were Democrats and No. 2 is Sen. Barack Obama.

Now remember, he’s only been in the Senate four years, but he still managed to grab the No. 2 spot ahead of John Kerry — decades in the Senate — and Chris Dodd, who is chairman of the Senate Banking Committee.

Fannie and Freddie have been creations of the congressional Democrats and the Clinton White House, designed to make mortgages available to more people and, as it turns out, some people who couldn’t afford them.

Fannie and Freddie have also been places for big Washington Democrats to go to work in the semi-private sector and pocket millions. The Clinton administration’s White House Budget Director Franklin Raines ran Fannie and collected $50 million. Jamie Gorelick — Clinton Justice Department official — worked for Fannie and took home $26 million. Big Democrat Jim Johnson, recently on Obama’s VP search committee, has hauled in millions from his Fannie Mae CEO job.

Political contributions and bailouts. Is there a connection?