Charlie's Chatter

The US House of Representatives passed its version of the “economic stimulus” bill yesterday. Oddly enough, not a single Republican voted for it, which I did not expect. But good for them. In yesterday’s post I mentioned that I had read a few parts of a draft version of a US Senate version of this “economic stimulus” bill, and I commented on it. I have neither seen nor read any parts of the actual bill passed by the US House of Representatives, except for a very tiny part reproduced on this web site. However, I have read some other comments and opinions on this newly-passed House bill. As a result of all this, my latest up-to-date comments of some import are as follows:

• It seems clear that the House version of the bill consists mostly of expansions of existing federal programs, (often large expansions), and also some tax law changes. Sure, some of these “expansions” could instead be characterized as “new” projects or even “new” programs; but the choice of exact wording here is not of much consequence in this context. I note in this web article that the widely-discussed “infrastructure projects” for the “economic stimulus” package are only a small part of the total package. So yes, for the most part what we have here is apparently just more spending by the government on existing government programs and an increase in the number of government employees.   (One Republican Representative, Eric Cantor, was reported as saying that small businesses don’t want more government programs — they just need a break. They need meaningful incentives, so they can get back off the sidelines, put capital to work and create jobs.)
• Neverthless, the bill passed by the House does expect some of the money to be spent on (and by) entities other than the federal government. On the web page referenced above, a tiny part of the actual bill is reproduced. When you read that you can see that it sometimes calls for the use of “States, units of general local government, and nonprofit entities or consortia of nonprofit entities”. But how are these “entities” to be selected? Well, some conditions are specified in the bill, but they are so vague and general that they are hardly worth the paper they are printed on. Of note is that none of these enities are “private” or “for profit”. However, perhaps as a “sop” to some deserving constituents who have private businesses, there are also a couple of sentences in which “private sector” entities are mentioned as being candidates for some of all the money; however, nothing of significance is written down about the selection process. All of this means, of course, that politics will decide who gets selected and therefore who gets the pork. (Sorry, I mean the “money”). That means be nice to your Senator and Representative, and hire a lobbyist if you can afford one.
• When it comes to so-called “infrastructure” projects, such as building, repairing and upgrading bridges and roads, and even doing the same with actual buildings, perhaps it is best that the House bill does not have too much of that in it. Why? Because from what I have heard few such projects are “shovel ready”. That means that it will take many, many months if not one year or more for such projects to get started with actual construction work! You see, before actual construction work can get started, there are a host of preliminary steps required. Profit and non-profit entities must somehow be selected; that takes time. Environmental impact studies must be done, and those take time. Preliminary designs must be done; that takes time. And finally all kinds of final approvals and permits will be required before actual work starts, and all of that takes time. But considering the existing miserable shape of our economy, we supposedly do not have the time! We need help right now !

The United States economy was in poor shape even in 1940 and early 1941, despite some increase in manufacturing brought about by overseas orders due to the Second World War. But after Pearl Harbor when the United States went to war, the federal government “went to work” to do what was necessary to win the war. Among other things, this meant an absolutely huge increase in construction and manufacturing, including the manufacture of new types of weapons such as tanks and airplanes. The US entered the War at the very end of 1941, and ended it in August of 1945. That was a duration of only three years and 8 months. How the heck did we do all that? Today we seem to need at least half of that time just to get an actual shovel into the ground. (Don’t forget those environmental impact studies !)

What is claimed to be an existing draft version of the “economic stimulus package”, as it is in the United States Senate, can now be found through these pages. There are over 400 pages in total, so I only had a chance to look closely at a very small part of it, with a much quicker look at about one-third of the remainder. Four things stand out:

1. The United States government already has literally thousands of different “programs” in place, programs designed to “help” us citizens. (Well of course these programs have been designed to help us! What else would you expect?)   Well, in any event, it is clear to me that the majority of this “economic stimulus package” consists of not much more than a relatively simple (but usually large) expansion of many of these existing programs. Let me list just a few of these existing programs, in very broad terms :
   • Programs for agriculture and farmers.
   • Programs for “aquaculture”, such as fish farms
   • Programs to “conserve national resources”
   • Programs for “rural” constituencies, such as rural housing and rural electrification
   • Programs for nutrition, especially for women and children.
   • Programs to provide what is called “Thrifty Food”.
   • Programs for Puerto Rico and American Samoa – Block Grants
   • Programs to provide more broadband telecommunications
   • Programs to manage and control coastal waters and inland waterways
   • Programs for State and Local Law Enforcement Assistance
   • Programs to improve health care quality, safety and efficiency;   (these are to include much added “Health Information Technology”).
2. As you might expect, a lot of the wording in this bill is legalese or “legal terminology”. However, there does not appear to be a whole lot of that, so it does not get too much in the way of understanding. Now that I think about it, there is not a really tremendous amount of detailed material in this draft bill to understand. That’s because there are very few actual and detailed specifics. For example, many times the proposed legislation for a program says things such as: « Until September 30, 2010 add $250,000,000 to the funds available for salaries and expenses, (or for “Construction”) », all this without specifying what those salaries will be or who will get them, and without specifying a single expense, (and without specifying what will be constructed).
3. The large majority of the proposed legislation in this draft bill is stated to be, in some way or another, included within many existing departments of the federal government. Sometimes the legislation calls for increased “expenditures” within these departments without really specifying what particular existing (or new) programs will use this increased funding. Some of these Departments include:
   • Department of Agriculture
   • Department of Commerce
   • Defense Department
   • Department of Education
   • Department of Energy   (includes an additional 14 Billion dollars for “renewable” energy “work”)
   • Department of Health and Human Services     (includes an additional half-Billion dollars for Native American Health Services and Health Facilities)

4. Finally, there are billions and billions of dollars which are added to already huge existing programs such as Medicaid, food stamps, and the “earned income credit” for those who do not pay income tax in the first place. These dollars are all welfare, no matter what label you want to put on them. They are hardly programs designed to stimulate the economy and increase business investment.

I must mention that I have read in other articles that the economic stimulus packages being proposed include such things as 40 million dollars for constructing and/or maintaining off-road vehicle routes, such as for ATV trails in forests and parks. I’ve read a few others just as ridiculous, given the current economic and financial crisis. However, I have not found any thing really that ridiculous in the draft bill that I looked at, although as I have already said, I did not look at the whole thing. In fact, I did not even glance at at least one-half of it. (I do think, however, that most of the so-called “green energy” initiatives are somewhat ridiculous, especially given the current economic and financial crisis.)

Conclusion : This “economic stimulus package”, at least the draft which I saw, is not much more than a large increase in many existing government boondoggles. It is interesting to note that the passages in this bill which seem to require the “purchase” and/or “use” of private sector goods and private sector personnel make little mention of exactly how these segments of the “private sector” will in fact be selected. That therefore means politics ! And for those of you who do not know what that really means, well then, it means that if you want a “piece of this huge money pie”, then you had better be in the good graces of your local Senator and Representative. Or you can hire a lobbying firm. Or do both.

I do not know if this web article is supposed to be a kind of news report or an opinion piece. In any event, this article is a terrible, almost nasty piece of writing, and it certainly is at least misleading. First off, note the title of the article : Obama Cleans Up After Bush. That title clearly and strongly implies that Bush somehow “dirtied things up” or “messed things up”, and that Obama is now “straightening this all out”. Good gosh, what a nasty attack on Bush that title is, not to mention its value as propaganda for the uninformed or the mentally-challenged. (Yeh, I know, the expression “mentally-challenged” is a politically-correct way of referring to a person who is for whatever reason just plain stupid.)
    The writing style of the author of the article is straightforward, assertive, and even somewhat aggressive; it is a writing style in which the author appears to be just naturally reporting an important piece of news. Well, although I myself am very unhappy with much of what Bush has done during his presidency, this article contains too much that is misleading and even nonsense, or close to nonsense. The article itself can be briefly summarized as an attack on Bush for many things that he and his administration did which supposedly damaged the environment, now and in the future. But Obama is now attempting to counteract these things in order to protect the environment, (or, as environmentalists would say, to “save the planet”). The author is almost certainly both a Bush-hater and an ardent environmentalist. As I already stated, although I am very unhappy with much of what Bush has done, (and even somewhat angry), I would not attack him with sleazy and underhanded writing. (As one example, the article states that some Bush regulations allowed “federal agencies to bypass expert advice from federal scientists on whether proposed projects would have an impact on endangered species, essentially cutting the heart out of the act“. Note the slick use of the phrase “expert advice”; surely no level-headed person would “bypass” what is expert advice! Also note the phrase “cutting the heart out”, which is a very strong expression, clearly implying a wish to not simply damage, but to destroy. Now that kind of writing is very misleading, if not downright incorrect and nasty.)
    The author attacks Bush for regulations which supposedly threaten the environment. As one example, the author writes that Obama was able to block a “pair of new air-quality rules, including one that would prevent the regulation of greenhouse-gas emissions from oil refineries“. I guess these latter rules were originally promulgated by Bush. But this author’s statement is clearly misleading at best, damaging at worst. Note that the statement implies that “Bush’s rules” would apparently prevent any and all regulation of greenhouse-gas emissions from refineries. That is not correct. I worked as a chemist in a very large chemical plant for almost 20 years, and my work there ended 23 years ago. During my last 10 to 12 years working in that plant, I knew that there was an increasing amount of many new government rules and regulations that required chemical plants and refineries to take steps to reduce all kinds of potentially harmful emissions, to include waste water and also gases emitted from almost any and all “smokestacks”. Is the author of this article implying that Bush regulations would have stopped all of the rules applying to the emission of greenhouse-gases from refineries? He seems to be, but if so, that can’t be correct!
    The author also attacks Bush for regulations which supposedly threaten plant and animal species, among the latter being the gray wolf. Well Mister author, let me tell you exactly who is the real endangered species as of this moment! This species is any American who is not already financially secure and at least reasonably well-off. I suspect that the majority of Americans are thus an endangered species as I write this. By “endangered” I do not mean that they are in danger of dying within the next few years. I do mean that they are in danger of losing their jobs (if they still have one) and then becoming poor, and in some cases even destitute. And for that we have to thank people like the environmentalist author of the article and also our governments, to include the Bush administration and now the Obama administration. The Bush administration has already spent absolutely huge amounts of money in an attempt to “solve” our financial and economic crisis, to little or no effect. So what is the Obama adminsration proposing? Essentially the same thing – spend absolutely huge amounts of money, even more than Bush did. Yeh, that’s going to help alright. The so-called stimulus package of the Obama administration, the so-called “American Recovery and Reinvestment Plan“, although not entirely fleshed-out at this time, clearly is not much more than a huge increase of “pork” – money that will be spent usually to satisfy people and businesses who are at least reasonably well-connected with their Representatives and Senators. This includes money to somehow “weatherize” houses, money for more childcare programs, money for so-called “green” initiatives, etc. etc. This also includes money for the National Endowment of the Arts; after all, we can not ignore starving artists! What bullcrap most of this is. This web article gives some details, many of them frightening to me. Huge amounts of money will be spent, money which the government does not have, but which they will effectively “print”, either by borrowing or by simply having the Fed “buy” more US Bonds. And let’s not forget the money from the TARP program which still remains to be dished out. This article shows how politicians used their power and influence (including that harmful politician Barney Frank) to “help out” (give money to) banks in their districts, even banks that would otherwise not have been eligible for any “help”. To sum up, all of this will not help the majority of Americans; instead it will leave them in worse shape months and years from now. It is these Americans who are truly the endangered species !

Good grief, what a mess. Surely almost everyone now knows that our economy is in a terrible state, possibly the worst since the Great Depression. And this mess appears to be global. But what is frightening to me are the reactions to this mess, and five of these stand out:

• To date the United States government has spent absolutely huge amounts of money in order to “help” the economy. This “help” started over 7 months ago when most taxpayers got “stimulus checks” from the government, most checks ranging from $600 on up. This was then followed by the “bailouts” of the insurance company AIG and the “bailouts” of dozens and dozens of banks and other financial institutions, at a total price tag approaching one trillion dollars! Then we had a short-term “bailout” of GM and Ford, which will no doubt be increased under the Obama administration. And as we should now know, Obama and the Congress are working on a new and extremely large “stimulus” package, something that will cost at least another one trillion dollars. Good grief, our national debt is now ballooning out of control, and God knows where and when it will stop!
• Too many citizens believe that government “help” is not only something that is desirable, but is in fact something that is definitely required. With almost no objections, the only disagreements about all this concern the details of this “help” – exactly how much money will be “spent”; when it will be spent; and on what this money will be “spent”.
• Except for a very, very few exceptions, all commentators, politicians and economists more or less agree that increasing government involvement and spending is required, again differing only in the details. One of the worst in this regard is Paul Krugman, the liberal commentator and economist who recently won the Nobel Prize; he insists that the government must spend much more money that it is currently planning to spend. Another pundit said today that “we tried the free-market capitalist system for the past 30 years, and it failed; now we must try the government”. Wrong !   During the last 30 years our economy was certainly not a “free-market capitalist” economy, but rather what is often called a “mixed” economy. That is, it has been an economy in which much of which happened (or which did not happen) has been dictated in one manner or another by governments. In fact, the sub-prime crisis, which I and most economists believe started this current mess, was largely caused by government rules and regulations, such as the increasing insistence that banks make more home loans, even to poor people who really did not qualify for such loans. In many cases, banks then had no other choice. And let us not forget Fannie Mae and Freddie Mac, institutions originally created by the government and heavily influenced by it ever since; these quasi-governmental agencies bear major responsibility for the subprime mortgage crisis, not to mention the politicians such as Barney Frank who continued to support them even in the face of mounting problems. All of this would almost be funny if it were not so serious, but some of the disagreements concern the very “words” that are used. For example, some say that much of this is not a “bailout” but is instead just a “stimulus”, or “loans”, or “credits”, or “rebates”, or even “guarantees”. This is all frightening to me.
• Although I was not alive except at the very end of the Great Depression, I know much about it because I have read a lot about it. It was a terrible time for the majority of Americans, and I fear that we are now headed for another depression, mostly because of very large and increasing government interference. For the most part, it was many ill-conceived government actions that caused and prolonged the Great Depression. I will not go into details here, although a few can be found on my web site.
• Finally, too many people believe that our next president Barack Obama will “save us”. During my 60+ years on this earth I have never came across such widespread adulation for a newly-elected president, with only John F. Kennedy coming a bit close. How often have you heard or read publicity for Obama in which phrases such as “history-making event” and “history in the making” are used? Why even the coming presidential inauguration is often said to be a huge and important history-making event, (and not just because Obama is an African-American)! As just one example of all of this, see this previous post of mine.   So many citizens believe so much in the skill, intelligence and worthiness of Obama that for those beliefs alone they think that Obama will “fix” almost everything within a year or two. Yesterday evening I went out to eat with about one dozen friends and acquaintances, and the conversation turned briefly towards the coming inauguration of president-elect Obama. About half of these people expressed strong opinions that things would soon get better, thanks to Obama. (The other half said nothing.) By the way, none of these people were African-Americans. They were, however, all over 60 years old.

For additional good opinions on all of this, I suggest reading this article and also this article.