This is a Stimulus!? I thought it was a Democrat wish list.

I didn't see the energy post till now.

Just remember I told you so.

How is an electricity business destined to fail?
If there's one thing besides food and water we will be wanting for a long time in reliably increasing quantities, it's electricity.

airborne - that's exactly what it is. That's my problem with it. It's a spending bill for Democratic pet projects under the guise of a stimulus billso that it doesn't have to go through the necessary legislative proceedures that a spending bill would.

Don't get me wrong, this bill will create jobs - about 3 million of them. That's great, but 600,000 of them will be government jobs and if you take the non government jobs out of the picture the remaining jobs come at a cost of $600,000 per job createed ?!?!? That's not stimulus, that's wasteful. Lower the payrol tax for companies and see how many new jobs are created and see what the cost in lost revenue would be to the government in lost payrol taxes - I bet you'd find that there wouldn't even be a loss in the end.

How about fixing the mortgage crisis (which is what started the damn mess) at the individual level, rather than at the bank level. lower people's interest, whether they're upside down or not, take the hit, THAT will stimulate the economy by giving people who are actually paying their bills more money in their pocket.

It's not electricity, it's the means electricity is produced. All the "green" talk, whatever its scientific merits, is being co opted by people to make money out of nothing. They're making bricks without straw. It's much worse than farm subsidies. We're pissing away our money at inefficient kinds of energy like those God awful wind farms to enrich clever investors who take advantage of our stupid legislatures. It's certainly a good idea to look to the future for energy, but that's not what we're doing now.

It's maddening.

Brilliant once more, philcore.

Agreed...well put phil.

Wind farms are hardly inefficient. According to the U.S. Department of Energy: Cost per unit of energy produced was estimated in 2006 to be comparable to the cost of new generating capacity in the United States for coal and natural gas: wind cost was estimated at $55.80 per MWh, coal at $53.10/MWh and natural gas at $52.50. ...and as mass production ramps up and improvements in the technology continue the unit cost should drop even more... not to mention that such costs do not take into account environmental impacts (where clearly wind comes out ahead).

phil, I don't get your math... $600,000 per job * 3,000,000 jobs comes out to 1.8 Trillion dollars - when the package is about half that. But even if that calculation came out right, how do you expect labor to be the whole cost? Labor never is. The multiplier varies from industry to industry but it is often 4 or more. So... 900 billion dollar stimulus package divided by 3 million jobs comes out to $300,000/job... and when you figure that each job is accompanied by overhead expenditures (which themselves create jobs, by the way) that create that 4 multiplier I mentioned than you have an average of $75,000 per job. Hardly a high number. But, besides, we're not just creating jobs, we're not just paying people to dig holes and fill them up again, these jobs will create some rather significant work-products. What am I missing here?

one other thing - if simply lowering taxes was the magic bullet phil would like us to believe then we wouldn't actually be in this spot in the first place thanks to all those wonderful tax cuts that Bush instituted.

thanks Invictus and Darwyn!

One thing that I was happy about getting yanked out of the "stimulus" bill is the $250 Million for Hollywood execs. Seriously - how is that stimulus? That is blatent payback for their support of Democrats in the recent election. It's fine if you want to pay back obligations you feel are owed due to their support and contributions - but goddamnit don't take it out of MY money - use your own if you want to write Steven Spielberg a check for $25 Million. How the hell is that going to create jobs? Hollywood had their best January ever in '09 in the middle of the current recession! They're doing just fine! Turn out people are going to the movies instead of going out to dinner because it's cheaper. Some industries benefit in a bad economy, perhaps Hollywood is one of them.

And don't get me started about the $150million for ACORN!!! WTF?

You're wrong about it being inefficient. What it is, is developing, and sustainable, now.

By the way there's nothing wrong with nuclear I don't hear you deriding that...

@Philcore
"And don't get me started about the $150million for ACORN!!! WTF?"
The false claim is based on a misrepresentation of a provision that would appropriate $4,190,000,000 "for neighborhood stabilization activities related to emergency assistance for the redevelopment of abandoned and foreclosed homes." The bill would require that money be distributed through competitive processes and states that "not less than $3,440,000,000 shall be allocated by a competition" to "States, units of general local government, and nonprofit entities or consortia of nonprofit entities." It also provides that "up to $750,000,000 shall be awarded by competition to nonprofit entities or consortia of nonprofit entities to provide community stabilization assistance."

Also can we drop the facade that the few bad apples who inflated their registration numbers to meet a quota really lead to people voting numerous times. I mean come on, please get some new arguments against why registering people to vote is a bad thing.

Registering people to voted more than once is a bad thing. Registering people who aren't eligible to vote is a bad thing. It's also wrong to give federal money to an ideological organization to carry out social development. Why not give the money to the Lions Club or some other uncontroversial group?

Wow - I leave for half a day and now everyone's an expert - I LOVE it!! well most of it.

first - on disagreements - of course we disagree. else we wouldnt have politics. invictus and dexter reflected the core of the philosophical differences when it comes to the role of the individual in the economy. one believes in self-interest (they are the T's for those who have read Kiersey) the other in the emotive capability of man (these are Kiersey's F's). the second type outnumber the first type (more Fs in the world than Ts 60-40) but the first type are far better at using (manipulating if you want to be pejorative about it) whatever tool they can to 'succeed' in 'convincing' the whole.


second - on taxes - as I said in an earlier post - the best response IMHO to a conservative "flat-taxer" is that if you want a better product (ie, the benefits of being rich) you have to 'pay' society (taxes) a premium for that opportunity. if you DONT want to buy that product - that's your choice - you can 'pay' a lower price and get an 'inferior' product. usually, the T's decide its worth the higher price. the F's are content with the lower quality product because they tend to achieve fulfillment from other sources (other products - spirituality, friendship, pot - whatever).

third - the taxes in the US, counter to conventional wisdom, are NOT that much lower than in Europe - we just get far less service from the government for our taxes. when you add federal income tax (avg for 50-100k income is 28%), to your payroll tax (ss, medcare - 12%), to your state income tax (3-5%), to your state sales (VAT) tax (5-10%), to other local taxes and fees (1-2%) - we in the US in the middle-income levels (50k to 250k) pay about 55-60% in taxes - very comparable to European social democracies. but europeans get free healthcare, free higher education, better labor protection, safer workplace, lower work hours, more vacation time, free daycare, etc etc etc. so the US worker gets the far worst deal in pure economic and utilitarian terms.

so why does the US citizen accept this disparity? 1) the US electorate is extremely ill informed (the T's use the 'tools' far better - they have the Luntz-style 'framing' down pat) 2) in every society the economic elite rule - but in the US, they have far more control because of the lack of gvnt regulation.... the result is that the top 5% actually pays a LOWER percentage of taxes.

how? A vast majority of their income comes from 'capital gains' (taxed at 15%) and dividends; they get far more of their 'income' as benefits (a company car, company computer, company travel, company vacations etc) so the price is paid by their employer not their private accounts; they also have favorable terms in the tax code ( which favor's capital over labor by a wide margin) for example, write-offs for re-investment, tax shelters, etc.

fourth - @invictus' comment: "I just believe people should keep their money, and if it needs to be taken everyone should give the same. Maybe that's naive and idealistic,". thats not idealism. thats utilitarianism. when you 'get' a lot more (as in product - you being well-off) you need to 'pay' more for it. and the only best store offering that higher standard of living is the US. so you should pay a higher price for that better product.

we will obviously disagree on this based on what we each define as 'idealistic' and 'fair' and 'just'. I find it quite unjust for one human being (take Paris Hilton) to travel to 3 continents on her birthday with a private jet and top-notch everything vs 2 billion human beings who live with $1/day. to me, THIS is unfair. to an average 'conservative' this is completely fine even if not fair. no one should interject.

@ philcore - I really relish the prospect of discusing thes important issues with a second well-informed and interested conservative - BUT (a big but) I would hope you reduce the invectives (s***) and ad-hominoms - back up your points with facts.

part of the issue is that I take issue with your 'facts' but i'll do that later - to start with, I'd like to say I agree with you that the rich get way too many loopholes (and I talk about that above). Europe has done a better job than the US in being 'fair' in this regard. I also agree with you about the well argued "maximizers" and "minimizers" in existence in society... BUT here is where we differ:

I think you cant 'get rid' of the minimizers with 'meritocracy'. in fact, I'd even say some 20% of humanity is pretty much useless (call me elitist - sorry). if the other 80% does not do something about this group (carry their dead-weight) this group turns into criminals and cost society even more (we pay some 40k per prisoner vs some 10k per student etc). so it would be cheaper (more utlitarian - more self-interested) if society just paid them to be lazy. (the 20% is exagerated and made-up)

the fact is - a VAST majority of human beings are NOT like this. they are either maximalists (10-20% of pop) or 'content' (60%) with 'earnging' their living. it HAS BEEN this way, and it will continue to be this way no matter what form of government we have.

so even in self-interest - conservatives should 'carry the dead-weight' because then they can have stability - which is THE most important factor in having a successful consumerist capitalist culture.

Furthermore - on the role of government: when invictus suggests its best to just pay zero income tax - he dismisses the role government plays. government not only pays for defense (which I presume you dont want cut) or entitlements (FDR style social safety net) but most important of all - JUSTICE. the reason for the american dominance in the world is actually our justice system. the fact that contracts are not based on who is stronger but on what has been agreed to and that the people 'believe' and will 'uphold' the 'system'. to achieve that - government must provide for that 'fairness' (through regulation - civil rights - justice - use of force/policing - defense - and infrastructure/roads/public buildings)

so I absolutely disagree with you that no government is the most stimulative. in fact - government is what keeps humanity and society from turning into a Hobbsian existence. this is the social contract we all sign by being 'citizens'.

Dexter - thank you for holding this conversation up single-handedly and I concur 100% with your energy point so I would expound further.

I know I wrote a ton - i'm sure most of it will be read by only me. but hey, i get off on this sort of thing (yes i'm weird like that) .

but more to come - some more comments worthy of a response.

@ airborne and philcore - stimulus and re-investment is more than a one-off pay for one job. ie - that 600k per job (if I were to accept your numbers) is creating a job that will LAST for deades. how so? for example, the 50bil on energy will create (hopefully) a new industry for the US to lead (ie steel/manufacturing/machinary/drugs/internet etc etc). the 20bil on school construction (10,000 schools i think) not only provides jobs for the ppl who do the building, but leaves behind schools where millions of kids will learn for decades and become a more productive labor force in the future).

@ phil - on the mortgage crisis - I totally agree that it needs to be addressed - this deserves an honest discussion - but this is not part of the stimulus - this is part of the 'bailout' (there's that masterful conservative framing again) . the problem is this is a 45-70 TRILLION dollar problem. so the solution has to be leveraged to work. why? because it goes deeper than the bad mortgages - it includes the credit default swaps that your fellow conservatives came up with in NY... the de-regulation your fellow conservatives championed and the bonus-merit-based system your fellow conservatives implemented (ie, make the compnay more profitable at ANY cost - even lies - and make more money as long as you can live on the margins, but within, the law - which by the way you manipulate though lobbying to serve your need. oh yeah, with 5.5 years of a Republican president and congress)

so what is the 'liberal' solution: the Baird proposal (the FDIC lady) kind of hits it - which is to keep people in their houses, and in essence force the companies to eat the losses - write-down their losses and hell go bankrupt. but republicans (not conservatives in this case) dont like this idea. they dont want the 'people' not the 'corporations' to take the 'responsibility' and the hit. the consumer should take the write-down / loss. just listen to McConnel's press-conference yesterday in defense of the banks and the bonuses on wall-street. its uncanny.

the problem is that (as the bankers have convinced us) if the banking sector fails - the entire economy will spiral down - we may face a 7trillion GDP instead of a 13.5 trillion GDP. that kind of scary fall - which may actually be pretty accurate.

but this economic conversation is an entire thing on itself - I could write 10-times as much as all i've posted above about the brokers (de-regulated middlemen since the early 2000s), the credit-rating agencies (who doubled as 'consultants' for these financial institutions on how to get higher credit ratings that THEY gave out), the corporate executives (who hid the 'true' value of their 'toxic' assets from their own shareholders), the regulators (remember Harvey Pitts - the foxes guarding the hen house), and the Republican (and some Democrats) who championed the derugulation (the repeal of the glass-stiegel act in particular but also the confrirmation of ppl like Pitts). AND of course the ill-educated (often on purpose) consumers who made really horrid decisions because they can barely add 2+2, nevermind figure out the cost of compunded interest in an interest only variable rate 30-year mortgage.



on energy - I wanted to also add one thing. one of the costs of oil/natural gas/coal aside from the vast enviornmental impact which is not part of the 'cost' is the defense spending it requires.

and dont get me started on a company like ExxonMobil which just made $ 45 BILLION in pure profits (not revenue) in 2008 - in THIS economy while our citizens were paying $4 a gallon and being tricked by stupid tricks like repeal of gas-tax (an 18 cent savings) and off-shore drilling (drill-drill-drill) - these guys were bilking Americans for their cash.

look - YOUR Republican President with YOUR fellow conservatives ruled the roost for the last 8 years.

the results speak for themselves. Debt has gone from 5 trillion to 10 trillion. a surplus of 120 billion in 2000 was turned into a 450 billion deficit in 2008. the US moral and economic leadership in the world is worst than its been since before WWI. and the highest income disparity since ... well... since feudalism.

@ nick and Dexter - thank you so much for going to actual data to prove your points vs pulling stuff out of thin air. I wish I did that more often. I tend to argue on the theoretical level (I am an N) vs the specifics... but I want you to know its because I have read and seen statistics that people like yourselves pull out. thank you.

@ phil, invictus, darwyn - thank you for not backing down and forcing us to disprove your points with data and arguments lol.

I can fully respect your libertarian tendencies - and I can almost feel your pain in having to defend a line of thinking that has been dragged through the mud over the past 8 (or maybe 28) years that it has actually been put into practice.

This present discourse has far exceeded the edification I initially strove for in my introductory remarks (that one is for you kaner)

My line of thinking has hardly been put in practice over the last 8 or 28 years. Bush was just a statist who felt bad about it.

Invictus, that brings me back to a previous unanswered request (may have been in another thread)... please provide an example of a political leader that has put into practice your libertarian/conservative line of thinking and shown that philosophy to be effective in real-world application - ideally, both in the short and long term. Reach back into history - use other countries if you like... give me an example of how dramatically good and powerful this political philosophy is. ...and then you can tell me who you voted for in 2000 and 2004. (you score some points in my book voting for Ron Paul in '08 - but again, has this philosophy been tested and proven?)

Well, for one thing I couldn't vote in 2000 or 2004.

The basic ideas were in practice for much of American history prior to the Great Depression. The national government did very little and taxed very little till the New Deal. There wasn't even an income tax before Woodrow Wilson.

So I guess I cite every historical government before the rise of the idea of a activist government. People are fully capable of taking care of themselves without a nanny state shifting around resources.

I suppose I can't name a purely libertarian leader because for the real structural changes to be implemented there almost needs to be a dictator to tear it all down and set it up again the right way. How's that for a paradox?

I can say flat taxes have worked in Eastern Europe where they've been applied. Russia's gone from Upper Volta with missiles to Saudi Arabia with missiles.

It's also kind of an unfair request to make. Where has textbook communism been tested and proven?

@babak: "BUT (a big but) I would hope you reduce the invectives (s***) and ad-hominoms - back up your points with facts."

Only a stupid liberal would accuse me of an ad-hominum attack!

...


wait for it ...


badap pshhhhhhh

just kidding - figured I'd throw a real AH out there as an ironic defence of your accusation.

But really - where did I ever seriously throw out an AH?

@Dexter - I did say - "subrtracting the government jobs of 600k" so the number is reall $600K * 2.4M jobs = roughly $14.5 trillion which by some estimates is the after-interest cost of the spending package - ahem, I mean "stimulus" package.

again, I don't have a real problem with the creation of jobs even in areas like alt-energy research. I think that we should also be drilling and throwing up nuclear and wind and solar too - whatever it takes to be independent. And that costs money, but creates jobs ... fine. BUT it's not an economic stimulus to a broken economy that is felt nation-wide to put a few scientists and engineers and construction crews to work. That's just plain old spending. But if we've got the money ... I think it's a worthwhile venture - surely money better spent than providing aid to OTHER countries to subsidize abortions! I'm not even pro-life, and I think that's ridiculous! But I digress ...

My point is, for 1.4 trillion dollars, surely there are better ways to put more people to work than a few million infrastructure types.

And the point about lowering taxes Dex - to say that the lower tax cuts under Bush didn't HELP the economy for the last 8 years is to only look at the last 8 months and project backwards with blinders! We have had one of the biggest booms in recent times under Bush - so much so, that like the .com bubble of the late 90's stupid, greedy people started subscribing to the greater fool theory - including the financial institutions who thought - this couple making 90K a year can qualify for this $400k house with it's ARM that will readjust to a payment of $4500/month over the next 5 years, because this $400K house will be worth $1M in the next 5 years if the current trend continues. ... uhhhh ... sound familiar?

sure yahoo's Market cap is $30B and they have never made a profit - but if this internet trend continues, they are poised to be a $60B in a year and I'll double my money (this was right around 1999, by the way - and my numbers might be off, I didn't actually look up the market cap of Yahoo in 99)

Point is, people continuosly fail to see bubbles. Hell - look at the gas prices during the summer - how many "experts" were predicting that when it was $4/gal that by the end of the summer it would be to $8/gal - that's when I thought it would be a good time to short oil futures - but I didn't know how.

The problem with the financial markets, is that the stupidity of the individual investor didn't just hurt the individual investor when the bubble burst, it hurt us all, because of the impact on the credit markets.

ok I digressed again to show the bubble parallel - but the point is, just because you hate Bush, don't for a second think that this current situation is his fault or that of his party, just because it happened durring the last 6 months of his presidency. There are plenty of other things to blame him for, after all - global hunger, AIDS, the 9/11 attacks, racism, slavery, the crusades, global warming, the Spanish Inquisition, the burning of the Alexandria library, whatever - he is clearly the most evil person to have ever walked the earth - I get it, I've watched NBC, CBC, ABC, CNN, and MSNBC for the last 8 years, I know he is truley the devil. But really - the economic crisis we now face ... more to do with greedy investors and corrupt CEOs than Dems or Reps or Bush or Obama.

phil - The current economic crisis has "more to do with greedy investors and corrupt CEOs than Dems or Reps or Bush or Obama." An interesting thing for a conservative/libertarian to say... someone who has faith in the ever-wise markets handling all problems if the government simply got out of the way (which it did starting about ten years ago when the safeguards in place since 1932 were removed). I certainly agree that greedy investors and corrupt CEOs are a big part of this - just as drug-king-pins are a big part of drive-by killings... question is what are we going to do to prevent these things from happening? I favor robust policing and transparent accounting practices. (Policing and enforcing of accounting practices takes government). You? How do you suggest that we prevent such nonsense from blowing up in our faces? How do you suggest that we deal with corruption? Perhaps we can't categorically prevent all bubbles... but this one was preventable.

As far as a better way to put people to work and stimulate the economy - name it. Most conservatives that I hear are convinced that WWII took us out of the depression... well, what was that if not a whole crap-load of government spending backed by huge debt? The beauty of both the pre-WWII measures and these measures when compared to WWII is that we're building things and educating people - it's not feeding a war machine. I assume that you also credit WWII with working an economic recovery... so, if that's the case, please explain how this plan is overall worse than paying people to build munitions and other people to destroy infrastructure and kill people? ...I mean other than the fact that this current proposed program is far smaller as a percent of GDP.

Invictus, I don't have an example of communism working (at least not one any better than Cuba - which is a success in some ways - a failure in others). Are you admitting that Libertarianism is as extreme and idealistic and unlikely to work as Communism is on the other end of the spectrum? I happily submit several countries in Europe as examples of successful application of social democracy (which is what I favor). Some of the most educated, healthiest and wealthiest populations are in social democratic countries.

Wow - I was just being funny using an ad hominum as a defence to the accusation of using one, but now that I re-read to see if I ever really did that I can't help but notice the hypocracy of the accuser ... Here are some examples:


"Would you prefer that these kids all go without? of course as a conservative, you think that 5 year olds should pick themselves up by their 'bootstraps'."

"it includes the credit default swaps that your fellow conservatives came up with in NY... the de-regulation your fellow conservatives championed and the bonus-merit-based system your fellow conservatives implemented "

"look - YOUR Republican President with YOUR fellow conservatives ruled the roost for the last 8 years."

teapot ... kettle?

@Dexter: "An interesting thing for a conservative/libertarian to say... someone who has faith in the ever-wise markets handling all problems if the government simply got out of the way"

As a conservative I believe in restricting the government to the obligations and duties set forth in the constitution. I believe in spending less than you make and letting your constituants keep what you don't TRULEY need to run the country. As a libratarian, I believe, quite simply in individual freedom AND individual responsibility. The two go hand in hand in my opinion.

Being Conservative and/or Libratarian or some blen of the two is not the equivilant of being an extreme free market type - I get that when free markets do their thing to the extent that they tend to do with no intervention, the innevitable result is monopolistic markets. That sucks for everyone other than the guy at the top of the monopoly. I won't hold to any ideal so strongly that I will be blind to its detrimental effects. I love the free society that America has fostered with some necessary intervention along the way. I want it to remain as free as possible without ruining the fabric of the society itself (Which will happen is pure capitalism, pure communism or pretty much pure anything is forced on it)

"question is what are we going to do to prevent these things from happening? I favor robust policing and transparent accounting practices. (Policing and enforcing of accounting practices takes government). You?"

absolutely. I think that the bastards who allowed this to happen at the expense, not only of their own company, not only of the millions of shareholders in their company, but the country as a whole - but odly enough, not to themselves or their personal net worth - should frankly spend a lot of time behind bars.

"How do you suggest that we prevent such nonsense from blowing up in our faces? How do you suggest that we deal with corruption? Perhaps we can't categorically prevent all bubbles... "

If I knew that and could communicate it well, I'm pretty sure I'd be a lot more important (and hopefully richer) than I currently am. Suffice to say that I agree with you here.

"but this one was preventable."

Absolutely it was! That's what is so infuriating.

I just wanted to mention that anyone who is interested in what credit default swaps really are and how they effect the current capital market structure should read this article.
http://www.rgemonitor.com/globalmacro-monitor/255257/everything_you_wanted_to_know_about_credit_default_swaps--but_were_never_told

You may also want to look into role that unrestricted capital flows into profit-maximizing investments lead to the huge increase in demand for CDO's. The demand leading banks to demand more mortgages to bundle, this leading to mortgage companies issuing mortgages like they were going out of style because they knew there would be buyers.

To blame greed is to blame the capitalist system itself. (Not necessarily a bad thing)

Mixed markets FTW!

By the way I just wanted to mention that I know the article is from the RGE monitor which is Nouriel Roubini's site so I'm aware of the basis but I think the article is enlightening regardless.

trying to split up the replies to keep them self contained - sorry for the tripple post if that offends anyone

@babak - "I think you cant 'get rid' of the minimizers with 'meritocracy'. in fact, I'd even say some 20% of humanity is pretty much useless ... if the other 80% does not do something about this group ... [they turn] into criminals and cost society even more so it would be cheaper ... if society just paid them to be lazy"

Babak - I think you are very well versed in your economic theory - but you would benefit from adding some social psych to your studies. Let's assume your 80% / 20% is accurate (I have no reason to doubt it and it sounds reasonable). The 80% could just pay the 20% to be lazy, but what are the incentives? Incentives are EVERYTHING when it comes to influence and motivation. A rat will dunk a basketball or litterally shock himself to death provided the right incentives.

I think that 15% of your 20% CAN be useful members of society if they are propperly incentivized. AND probably 50% of your 80% will become lazy if they are improperly incentivized. I don't know the solution to properly incentivize the 15/20 in the lazy group - we figure that out and we will be well on our way to recovery - but I do know how you can negatively incentivize 50 of the 80% in the hard working group ... by showing them that they DON'T have to work to get the same necessities of life. The other 80% will pay for them too ...

oooh wait - before someone accuses me of bad math ... if 50 of the 80% go to the other side, there will no longer BE 80% paying for 20%, there'll be 30% paying for 70%

and then figure out the incetives for the 30% - wow, they're starting to look bleak, huh? Here's how you incentivize them. Build a wall around your city and point the guns inward. Imprison people who criticize your brilliant idea of 80% paying for 20% because it worked on paper. Kill your political opponents who try to explain to people that there is a better way. Now you incentivize with fear, which is also very powerful, but really, it kinda sucks major ass, don't you think?

We just need to find a way to propperly incentivize the lazy 15% who will work, and make the prospects of being supported by the government because you are in the bottom 5% so bleak that no one is actually incentivized by it, but that we are treating them humanely and with respect.