This seems vaguely familiar: AP - Unemployment unchanged by projects
WASHINGTON – A federal spending surge of more than $20 billion for roads and bridges in President Barack Obama's first stimulus has had no effect on local unemployment rates, raising questions about his argument for billions more to address an "urgent need to accelerate job growth."
An Associated Press analysis of stimulus spending found that it didn't matter if a lot of money was spent on highways or none at all: Local unemployment rates rose and fell regardless. And the stimulus spending only barely helped the beleaguered construction industry, the analysis showed.
With the nation's unemployment rate at 10 percent and expected to rise, Obama wants a second stimulus bill from Congress including billions of additional dollars for roads and bridges — projects the president says are "at the heart of our effort to accelerate job growth."
Transportation Secretary Ray LaHood defended the administration's recovery program Monday, writing on his blog that "DOT-administered stimulus spending is the only thing propping up the transportation construction industry."
Road spending would total nearly $28 billion of the Jobs for Main Street Act, a $75 billion second stimulus to help lower the unemployment rate and improve the dismal job market for construction workers. The Senate is expected to consider the House-approved bill this month.
But AP's analysis, which was reviewed by independent economists at five universities, showed the strategy of pumping transportation money into counties hasn't affected local unemployment rates so far.
"There seems to me to be very little evidence that it's making a difference," said Todd Steen, an economics professor at Hope College in Michigan who reviewed the AP analysis.
And there's concern about relying on transportation spending a second time.
"My bottom line is, I'd be skeptical about putting too much more money into a second stimulus until we've seen broader effects from the first stimulus," said Aaron Jackson, a Bentley University economist who also reviewed AP's analysis.
It's familiar because I wrote the exact same thing.... except that was last November....and without an official study. And I'm not really boasting. I don't have some special power of logic or ability to predict the future. All I did was apply a couple, rather simple logical mathematic and economic principals. The credit should really go to the wisdom gained from reading a couple dusty old papers on economics...
The problem here is that logic is not necessary to generate social policy, or political capital. Being seen to be 'doing something' to fix the economy, does not require logic and rationality, evidence from results, or much of anything at all. Simply doing something, and being seen: That's politics. Thomas Sowell refers to this phenomenon as The Vision of the Anointed (the title of one of his excellent books, which I am reading). What mattered with the Stimulus was the Vision => not the results.
I guess I should have bet some money on it. Actually, I guess we all did. Almost $1 Trillion, in fact...
As far as The Vision of the Anointed is concerned, here are some quotes, for those interested in the concept:
"One of the most important questions about any proposed course of actions is whether we know how to do it. Policy A may be better than policy B, but that does not matter if we simply do not know how to do Policy A. Perhaps it would be better to rehabilitate criminals, rather than punish them, if we knew how to do it. Rewarding merit might be better than rewarding resultsif we knew how to do it. But one of the crucial differences between those with the tragic vision and those with the vision of the anointed is in what they respectively assume that we know how to do. Those with the vision of the anointed are seldom deterred by any question as to whether anyone has the knowledge required to do what they are attempting." -- P. 109
"In the tragic vision, individual sufferings and social evils are inherent in the innate deficiencies of all human beings, whether these deficiencies are in knowledge, wisdom, morality, or courage. Moreover, the available resources are always inadequate to fulfill all the desires of all the people. Thus there are no "solutions" in the tragic vision, but only trade-offs that still leave many unfulfilled and much unhappiness in the world." -- P. 113
"The presumed irrationality of the public is a pattern running through many, if not most or all, of the great crusades of the anointed in the twentieth century--regardless of the subject matter of the crusade or the field in which it arises. Whether the issue has been 'overpopulation,' Keynesian economics, criminal justice, or natural resource exhaustion, a key assumption has been that the public is so irrational that the superior wisdom of the anointed must be imposed, in order to avert disaster. The anointed do not simply to have a disdain for the public. Such disdain is an integral part of their vision, for the central feature of that vision is preemption of the decisions of others." -- P. 123-124
"In their zeal for particular kinds of decisions to be made, those with the vision of the anointed seldom consider the nature of the process by which decisions are made. Often what they propose amounts to third-party decision making by people who pay no cost for being wrong--surely one of the least promising ways of reaching decisions satisfactory to those who must live with the consequences." -- P. 129
"The vision of the anointed is one in which ills as poverty, irresponsible sex, and crime derive primarily from 'society,' rather than from individual choices and behavior. To believe in personal responsibility would be to destroy the whole special role of the anointed, whose vision casts them in the role of rescuers of people treated unfairly by 'society'." -- P. 203
"A California farmer can always show the television audience the abundant crop he has been able to grow because of federal water projects. But no one can videotape the crops that would have been grown elsewhere, at less cost to the economy, if there were no federal subsidies to encourage the use of water delivered at great cost into the California desert instead of water delivered free from the clouds elsewhere." -- P. 257
"In the anointed we find a whole class of supposedly 'thinking people' who do remarkably little thinking about substance and a great deal of verbal expression. In order that this relatively small group of people can believe themselves wiser and nobler than the common herd, we have adopted policies which impose heavy costs on millions of other human beings, not only in taxes, but also in lost jobs, social disintegration, and a loss of personal safety. Seldom have so few cost so much to so many." -- P. 260
"There are no solutions; there are only trade-offs." -- P. 142
"To those with the vision of the anointed, the question is: What will remove particular negative features in the existing situation to create a solution? Those with the tragic vision ask: What must be sacrificed to achieve this particular improvement?" -- P. 135
In case you were wondering - I hold to the tragic vision. How about yourself?
