Fool Me Twice (14 page)

“Instead of adding new programs to an already bloated job training system,” Muhlhausen concluded, the president and Congress “should stop wasting taxpayer dollars by terminating these programs.”
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A failed Keynesian concept even more harmful than government “jobs training” was described by the Cato Institute's Thomas DiLorenzo at about the same time. In a February 1984 paper,
The Myth of Government Job Creation
,
¹²
he wrote:

The “cost” of government jobs programs, regardless of how they are financed, is therefore best viewed as the reduction of private sector production and the employment that production creates. Those who believe that government jobs programs can create jobs fail to realize or acknowledge that they also destroy jobs elsewhere in the economy. Government jobs programs alter the composition of jobs in the economy—more government employment, less private employment—but do not increase the number of jobs. Some may prefer a larger government sector relative to the private sector—and this is what government job programs give us—but it is misleading to pursue this objective under the guise of creating jobs.

“More government employment and less private employment”—a progressive's dream! And so, in the fourth component of its December 2009
American Jobs Plan
, the progressives called for the government's direct creation of jobs “by putting unemployed people to work in jobs that will benefit their communities.”
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“If the private sector can't put people back to work, then the public sector must,” the Economic Policy Institute declared.

Clearly, if unrestrained by Congress during a second term in office—or using the power of the presidency to circumvent Congress and issue executive orders—Obama would inevitably push these jobs programs or a variety of others like them.

As for terminating any existing programs, Democrats inside and outside Congress are adamantly opposed. In fact, the progressive Democrats' game plan is to introduce, re-introduce, and cut and paste jobs legislation until—like the 2009 stimulus package and the gargantuan 2010 ObamaCare bill (“Let's pass it and then we'll find out what's in it”)—they manage to force through more and more taxpayer-funded government-controlled jobs and entitlement programs.

A good example of government-as-job-provider boosterism comes from Dr. Philip L. Harvey, professor of law and economics at Rutgers University, who champions the “direct creation” of jobs in his 2011 Demos report,
Back to Work: A Public Jobs Proposal for Economic Recovery
:

The advantage of the direct job-creation strategy lies in its unique ability to serve the goals of anti-recessionary fiscal policy at the same time that it is serving the social welfare needs of jobless workers. There is no other anti-recession strategy that can do either of these things as well as a direct job-creation program, let alone combine them in a single programmatic initiative.
¹⁴

Clearly a Keynesian economist, Harvey claims that the direct creation of jobs by federal spending includes a “multiplier effect” of more jobs created per dollar because the government can target where jobs are needed at who needs them most. The government, he claims, can make jobs available immediately. And all this will be paid for without raising the federal deficit. Evidently Harvey envisions a revival of FDR's New Deal. Participants would fulfill community needs such as “construction work (e.g., the rehabilitation of abandoned or substandard housing), conservation measures (e.g., caulking windows and doors in private dwellings), the construction of new affordable housing units, the improvement of existing public parks, the construction of new parks, and the beautification and maintenance of indoor and outdoor public spaces.” Then it could be expanded to improve “the quality of public services in areas such as health care, child care, education, recreation, elder care, and cultural enrichment.”

And who would operate and oversee such massive programs for the necessary 8.2 million jobs Harvey projects would be required to reduce the unemployment rate to 4.5 percent? Government, government, government: federal, state, and local. Participants would be paid at “approximately the same wage that persons with similar qualifications and experience reasonably can expect to receive in the regular labor market.” But individuals would not be
guaranteed
the same wages they'd enjoyed in their last jobs. Rather, they would be paid the “prevailing wage for the positions they were offered based on their qualifications and experience.”

In his estimation, Harvey includes employer-provided health insurance and child-care services for the workforce. He presumes participants would have access to affordable health insurance and all workers would be guaranteed paid sick leave. Additionally, Harvey states the “easiest way to guarantee access to affordable housing would be to turn the Section VIII housing voucher program (or its equivalent) into a legal entitlement”—at an estimated annual cost of about $50 billion. Ultimately laying bare his socialist roots, Harvey calls his wage policy nonessential, but “the equal pay for equal work principle argues in its favor.” New Dealers, he concludes, generally favored reducing the number of hours worked rather than reducing the hourly wage.

Not to worry. Progressives in Congress have all this covered.

When the U.S. Senate voted on it, October 7, 2011, Barack Obama's sweeping jobs bill—the American Jobs Act of 2011—failed to pass.
¹⁵
Ten days later, October 17,
¹⁶
Sen. Robert Menendez (D-NJ) reintroduced the first piece of legislation from the package, the $447 billion Teachers and First Responders Back to Work Act.
¹⁷
But three days later, the Senate also voted this down.
¹⁸

Later that week, October 20, Democrats returned with another piece of the president's defeated jobs bill and introduced the $60 billion Rebuild America Jobs Act. It would have provided “an infusion of funding to rebuild roads, bridges, airports and rail, and create a national infrastructure bank that would leverage private and public capital to finance projects.”
¹⁹
On
November 3, the Obama administration “strongly supported” passage of the bill, claiming it would “put hundreds of thousands of construction workers back on the job and modernize America's crumbling infrastructure.”
²⁰
The bill would have poured an immediate $50 billion into U.S. highways, transit, rail, and aviation—but was defeated 51–49 in the Senate the same day.

The August 2011 progressive blueprint of the BlueGreen Alliance (BGA)—
Jobs21! Good Jobs for the 21st Century
—uses similar language. It calls for investment in America's highways, rail, transit systems, and biking and walking infrastructure to make America “more energy independent and globally competitive.” BGA claims 13,700 jobs would be created or sustained (more jobs “created or saved”) with a mere $1 billion investment. It also calls for a whopping six-year, $550 billion reauthorization bill to create a total of 7.7 million jobs.
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(It's unclear how that multiplier works.) BGA also calls for a $1 billion investment to create or sustain 20,000 jobs for high-speed passenger and freight rail—and to reduce oil dependence and pollution.

BGA's claims are based on a group of progressive reports, principally
The Job Impact of Transportation Reauthorization: Research and Ideas for Shared Prosperity
, by Ethan Pollack of the Economic Policy Institute (June 2010), as well as another June 2010 report by Pollack, a May 2010 report by the Economic Policy Institute and the BlueGreen Alliance, and an October 2010 report by EPI's Pollack and Becky Thiess.

In the original “stimulus” bill, Obama included $8 billion for high-speed rail and called for $1 billion per year for five years in his proposed budget to get his projects “off the ground.”
²²
Grant awards were designated to lay the “groundwork for 13 new, large-scale high-speed rail corridors across the country … part of a total of 31 states receiving investments, including smaller projects and planning work that will help lay the groundwork for future high-speed intercity rail service,” as the White House claimed in April 2009.
²³

Grant awards were not announced until nine months later (January 28, 2010). Almost two years after that, in November 2011, the U.S. Department of Transportation announced that 2012 was “shaping up to be the year of
significant high-speed activity.” Contracts had been let by states for design work, planning work, construction materials, and supplies.
²⁴

A closer look at one of these high-speed rail projects is instructive.

Stanford University economist Thomas Sowell wrote at the end of January 2012 about California's prospective “Bridge to Nowhere.”
²⁵
Sowell pointed to Japan's famous high-speed rail system between Tokyo and Osaka, in “one of the most densely populated countries in the world.” The “bullet train” carries 130 million riders a year. He compares this to the proposed first leg of California's system, the route between Fresno and Bakersfield. Tokyo has a population three times that of San Francisco and Los Angeles combined. Fresno and Bakersfield are much smaller communities in the agricultural San Joaquin Valley. The 2010 population for all of San Joaquin County was 685,306.
²⁶
“You can bet the rent money that high-speed rail traffic between Fresno and Bakersfield will never come within shouting distance of covering the operating costs,” Sowell wrote. “Some people have analogized putting such a rail line between these two towns to the infamous ‘bridge to nowhere' in Alaska.”

Why
is
the project in the sparsely populated Valley? Politics. It's about politics. If the high-speed train started where California's governor, Jerry Brown, and Obama wanted it to go—between the mega coastal cities—environmentalists, and politicians connected with environmentalists, would lie down on the tracks to stop the trains, Sowell wrote. Instead, California gets federal taxpayer dollars, and Brown and Obama look like heroes.

Another section of the Rebuild America Jobs legislation claimed it would

take special steps to enhance infrastructure-related job training opportunities for individuals from underrepresented groups and ensure that small businesses can compete for infrastructure contracts.

BGA gives its recommendation to programs like those found in the Green Jobs Act to expand federal, state, and local support for “green industry career programs in high schools and community colleges.”
²⁷

The Green Jobs Act of 2007 (GJA) was introduced by then representative Hilda Solis (D-CA)—who is now the secretary of labor—and Rep. John Tierney (D-MA). GJA authorized up to $125 million in funding to establish
national and state job training programs, which would be administered by the U.S. Department of Labor. GJA became part of the Energy Independence and Security Act (the “2007 Energy Bill”) signed by President Bush in late 2007.
²⁸
Congress appropriated $500 million for the Green Jobs Act through the stimulus bill in February 2009.

The final item in the Rebuild America Jobs bill threw $10 billion into the creation of an “innovative American Infrastructure Financing Authority” to “leverage private and public capital and to invest in a broad range of infrastructure projects of national and regional significance, without earmarks or political influence.” (The topic of creating an infrastructure bank is covered in the following chapter.)

But from where would this $10 billion come? Entirely through a surtax on Americans making over $1 million per year. But as Scott Wong at
Politico
noted, the bill “is almost certainly doomed given that Republicans are unified against any tax hikes.”
²⁹
Wong was correct. For the third time within a month, progressive Democrats failed to get a jobs bill passed in the Senate.
³⁰

One particularly trenchant comment came from a retired clergyman in the Philadelphia area, James A. Glasscock. Obama's proposals were merely updated versions of Franklin Roosevelt's Depression-era Works Progress Administration, he wrote. The projects were “not a long range plan for economic stability and job creation” but would rely entirely on borrowed money. “It is not free money.”
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“Ironically, the legislative plan that President Obama proposes in 2011 in his Rebuild America Jobs Act borrows heavily from the blueprints adopted by Fascism and National Socialism, and FDR's New Deal,” Glasscock continued. “The end results of the Depression years of the 1930s remain with us in 2011, because our national politicians have not learned any lessons of the past.”

One such politician is Sen. Frank R. Lautenberg (D-NJ), who introduced the 21st Century Works Progress Administration Act on September 7, 2011. The old/new legislation would “immediately put Americans to work rebuilding our nation and strengthening our communities,” Lautenberg claimed when he introduced it.
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Across the country, we continue to benefit from projects completed under President Roosevelt's WPA, which employed more than three million Americans during a time of great need. A 21st Century WPA would tackle our nation's job crisis head-on and accelerate our economic recovery.
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