There is little doubt that shovel ready is, well…. It isn’t. Not a new revelation for the Obama administration. In 2009 and 2010 this space addressed the lunacy of projects being shovel ready and in October of 2010 the President admitted to it. The President reprised his admission, in an attempt at humor. The Presidents gaff is not the issue. The big picture and its symptoms are the issue.
Anyone, anyone involved in a significant project can attest to the wide variety of approvals that must occur: historic district commissions, zoning boards, county commissioners, EPA impact studies, utility tie in approval, public hearings, design approvals, architectural sign offs, permits, licenses and, heaven forbid, waiver applications that tend to duplicate the initial effort. In each case the approving authority has an agenda; the agendas differ dependent upon the stage of the approval process. It may take years to go from drawings to “shovel ready”. The administration demonstrated either rampant incompetence or rampant ignorance of how these things work; neither a good sign. Recall the dismissive attitude aimed at any and all who questioned the structure and impact of shovel ready or the stimulus as a whole. You may appreciate the irony that what limited shovel ready is a result of Democratic policies applied over decades at all levels of government based on “government knows best”.
A small fraction of the stimulus was aimed at infrastructure leading to immediate skepticism regarding stimulus impact and job creation. That skepticism was well founded. A vast majority of the stimulus went to immaterial tax cuts, social programs and maintenance of public employee populations; hence “jobs saved” was a necessary talking point to cover the reality of a strategy that called for limited, targeted employment support; not creation. Whether a reflection of misunderstanding or outright misdirection; neither applies a positive brush stroke to the economic big picture.
The legions of now departed economists, Keynesians all, to a person, got it wrong. Not a single aspect of the economic impact of the stimulus was projected correctly. What of that? Representative of a fundamental failing in thought process, group think by the best of the economic best or an ideological drive that must, by its nature, ignore or twist facts and economic history?
“Small business is the engine of job creation” so they all said; less than 3% of the stimulus was geared to small business. The tax cuts provided the average American with enough extra cash for a family pizza once a week, immaterial economically, but the President can and does point to a broad tax cut. The payroll tax holiday is fine, but again in the context of the full scale of economic challenges it, as well, is essentially immaterial; immaterial in the context that not a single macro economic indicator has improved of late for more than a 30 to 60 day period, consistently falling back on new lows.
Health Care legislation has (first-hand knowledge here) resulted in significantly higher costs. The higher costs are expected to continue based on mandates in the law and industry preparation for the eventual full impact of Health Care legislation. A significant plurality of employers with the resources to fully evaluate the impact of Health Care will drop company based coverage when Health Care moves into full swing in 2013 and 2014. Waivers, 1301 so far, are supplied to major supporters of the legislation who have seen the light and now do see what’s in the bill as Speaker Pelosi predicted. Just one problem Madam Speaker, they don’t love it. Did anyone read this thing at the time? Was passing the critical threshold toward a single payer system simply too exciting to allow the intrusion of other considerations and anticipation of consequence?
And yet, Democrats in Congress hold fast to the commitment to tax the rich, punish corporations selectively and more spending. Simply stated, “double down on failed policy”.
If the issue is the budget, the President’s budget went down 97 – 0 in the Senate. There is no Presidential plan to solve the Medicare crisis. There is no White House plan to improve employment. In terms of regulation the Chief of Staff, Mr. Daly has significant trouble “justifying the unjustifiable” to the Business Roundtable. Not a positive metric. Surprise Mr. Daly, logic is not in play resulting in your justification difficulties.
Jamie Diamond castigates Fed Chair Bernanke on the Frank/Dowd financial regulation requirements to the point that Mr. Bernanke’s answers border on the incomprehensible. Could Mr. Bernanke be having trouble “justifying the unjustifiable” as well?
What we know is “unjustifiable” does not result in a change of perspective or policy. How’s that working for you?
For our media; every downturn is “unexpected”. Every bad number is “unexpected”. Really, how many bad numbers will it take to establish the pattern in these folk’s minds?
At some point in time the symptoms add up to a limited number of available perceptions; gross incompetence, gross disregard or the presence of an overriding agenda that must damage existing financial systems beyond repair, opening the way for ever increasing central planning, government intervention and management of the economic system. While not a fan of conspiracy theories; the perception of an unstated driving agenda is difficult to avoid based on nothing more than actions, results, the absence of new directions and ongoing castigation of whomever does suggest a new direction.
So the bottom line is; what we’ve done has failed and what the opposition purposes is unacceptable. The much pointed to, at the time, debt reduction commission has not had so much as a response from the Oval Office, no conversion to legislation; no qualification of the suggestions. Meaning what; that where we are represents acceptable results?
The real issue is that failures are broad based and the same trajectory of failure exists in relation to foreign policy, energy, entitlements and social support programs. That is the issue.