So much for shovel-ready projects

posted at 10:12 am on January 11, 2010 by Ed Morrissey

Democrats insisted that they would usher in a wave of new jobs by speeding up spending on infrastucture, especially road construction.  All across the US, signs began appearing that heralded the local traffic snarl as a product of the American Recovery and Reinvestment Act — Porkulus, as we came to call it.  Did it do anything to create or even “save” jobs?  The Associated Press says no (via Desmond L):

Ten months into President Barack Obama’s first economic stimulus plan, a surge in spending on roads and bridges has had no effect on local unemployment and only barely helped the beleaguered construction industry, an Associated Press analysis has found.

Spend a lot or spend nothing at all, it didn’t matter, the AP analysis showed: Local unemployment rates rose and fell regardless of how much stimulus money Washington poured out for transportation, raising questions about Obama’s argument that more road money would address an “urgent need to accelerate job growth.” …

AP’s analysis, which was reviewed by independent economists at five universities, showed that strategy hasn’t affected unemployment rates so far. And there’s concern it won’t work the second time. For its analysis, the AP examined the effects of road and bridge spending in communities on local unemployment; it did not try to measure results of the broader aid that also was in the first stimulus like tax cuts, unemployment benefits or money for states.

“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 reviewed AP’s analysis.

Even within the construction industry, which stood to benefit most from transportation money, the AP’s analysis found there was nearly no connection between stimulus money and the number of construction workers hired or fired since Congress passed the recovery program. The effect was so small, one economist compared it to trying to move the Empire State Building by pushing against it.

This is important for two reasons.  If Obama tells the country that his stimulus plan worked, this analysis shows that it didn’t.  Of course, we hardly need that anyway; Friday’s jobs report shows clearly that the economy has bled jobs at a constant rate all through 2009.  The only reason the unemployment rate stayed at 10.0% was because so many people stopped looking for work at all.  The number of people in the job market dropped to its lowest level since 1985.

The second reason?  Obama is about to offer the hair of the dog for the national hangover.  He wants Porkulus II, with even more spending on road construction that didn’t dent the employment picture at all the first time.  AP’s analysis shows that it won’t create or save jobs the second time around, either.

In fact, the road-construction stimulus has a lot in common with Cash for Clunkers and the homebuying credit.  All are temporary and limited attempts to get a one-time spike.  It’s almost like a checklist rather than a strategy for creating long-term growth, a way to look busy without doing much of anything at all.  Obama is stealing roadwork from the next few years and front-loading it into 2010.  Not only will that not create much employment now, it will create a depression in the road-construction industry for the next several years.

It’s time for this administration to admit that it has no idea what it’s doing.  Obama needs to fire his economic advisers and start listening to people who understand how to create long-term growth rather than government-managed misery.


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Comment pages: 1 2

What’s so utterly stupid about stimulus funds for quote Shovel-Ready Projects, is that shovel-ready projects only become shovel-ready by having funding in place. And since the dustbowl now has a whole bunch of asphalt mixed in it, repaving projects just don’t put that many people to work as compared to the 1930′s. Not that we’d expect a Progressive to actually come up with a novel idea…

BKeyser on January 11, 2010 at 12:39 PM

Who needs infrastructure in a third world economy?

mmmmm mmmmm mmmmm mmmmm

bluegrass on January 11, 2010 at 12:43 PM

If you REALLY want to stimulate the economy;

Fund and Mandate at least 1 Nuclear Power Plant in each state based on population and need. (You many not need to build one next to the Hoover Dam.) As many as 100.

No Medicaid funding for a State until the projects are permitted.

With the prospect of cheap power available everywhere, industries will grow.

barnone on January 11, 2010 at 12:48 PM

It’s time for this administration to admit that it has no idea what it’s doing. Obama needs to fire his economic advisers and start listening to people who understand how to create long-term growth rather than government-managed misery.

Dammit, Ed, stop being such a fool. Obama knows exactly what he’s doing. You just refuse to believe he’s evil enough to do it. Well, he is brother.

Extrafishy on January 11, 2010 at 12:51 PM

I am not against suburban sprawl, but if you want to live out there, pony up the cash for your own roads.

WashJeff on January 11, 2010 at 10:32 AM

Most roads are built using gas taxes. So they already are.

MarkTheGreat on January 11, 2010 at 12:56 PM

what’s an example of a green job?

blatantblue on January 11, 2010 at 10:23 AM

I painted my kitchen greed.

Does that count?

MarkTheGreat on January 11, 2010 at 12:58 PM

…people who understand how to create long-term growth rather than government-managed misery.

The Porkulus’ purpose is to redistribute money from the middle class to the (Democratic) lower middle class to buy their lifelong votes. He’s giving away free food in barrios and propping up union jobs in Michigan and California. That’s the purpose. The only people who are miserable are the foot rustlers and bitter clingers, and his party is fine with that.

PattyJ on January 11, 2010 at 1:01 PM

If they pass a second porkulus then they will have officially met Einstein’s standard for insanity, per this AP report. Unless the result was the one they wanted.

curved space on January 11, 2010 at 12:30 PM

They’ve been passing “stimulus” bills during every economic downturn since the depression. Not one of these bills has worked.

An economics professor of mine once joked that the best lagging indicator of economic recovery, was the fact that congress was debating a stimulus bill.

MarkTheGreat on January 11, 2010 at 1:06 PM

I painted my kitchen greed green.

Does that count?

MarkTheGreat on January 11, 2010 at 12:58 PM

FIFM

MarkTheGreat on January 11, 2010 at 1:07 PM

AP’s analysis, which was reviewed by independent economists at five universities, showed that strategy hasn’t affected unemployment rates so far.

Maybe that’s because the highway construction business wasn’t suffering from unemployment in the first place? The unemployment in construction we’ve been seeing is in the housing business, but (correct me if I’m wrong) the people who build houses are not the same people who lay asphalt.

Buy Danish on January 11, 2010 at 1:39 PM

rockmom on January 11

Me think its worse than that (hard to believe, I know).

On average the people of the USA buy 142.5 billion gallons of gas per year.

The Federal excise tax on fuel is 18.4 cents per gallon

The Federal excise tax on fuel is for“roads/ infrastructure”

Note: this is not the ONLY tax on fuel.

There are also state and local taxes on fuel, I would assume that state and local taxes on fuel is also for “roads/ infrastructure” .

Taxes by state + Federal excise tax on fuel

http://en.wikipedia.org/wiki/Fuel_tax

Example: California 64.5, New York 63.4, Texas 38.4, Alaska 18.4 (no state tax), District of Columbia 38.4

Considering the condition of our “roads/ infrastructure” where TF did the money go!

DSchoen on January 11, 2010 at 1:41 PM

All of these Pork Signs
Have a striped “TIGER” logo…
What is this “TIGER”?

Haiku Guy on January 11, 2010 at 1:53 PM

Putting America to Work?

Perhaps a lesson in physics would be appropriate.

This Adminsitration is expending effort.

It is not accomplishing anything.

Thus, no work….just effort; expense of energy.

coldwarrior on January 11, 2010 at 1:56 PM

I am a contractor for a company that is in the “Green job” business designing lower cost solar panel manufacturing. I can tell you this, these sustaining green jobs in manufacturing will be done oversees. Only the engineering is done here in the USA and that is not sustaining.

Electrongod on January 11, 2010 at 2:09 PM

It’s time for this administration to admit that it has no idea what it’s doing. Obama needs to fire his economic advisers and start listening to people who understand how to create long-term growth rather than government-managed misery.

Ed, it’s time for you to admit that you’re incredibly naive. You know, it’s one thing for Allahpundit to play dumb about Obama… He’s always giving undeserved benefit of the doubts to Democrats, mocking Palin and Beck, etc. He’s got some problems.

But why are you playing dumb too? Do you really believe Obama is trying to improve the economy? Do you actually believe that this has been his goal? Do you not believe his own words that he is trying to “fundamentally transform” the country? I don’t know if you guys are afraid of being called conspiracy theorists (actually, that is part of Allahpundit’s problem), but you’re aiding the problem by not using your large soapbox to expose what’s really going on in this country.

BTW, just a reminder to anyone who missed my prediction I’ve been making for a while… Expect a notable dip in the unemployment numbers, bringing them below 10% in the coming months when the insanely massive census project hires over 1 million TEMPORARY workers… Just in time to trick people for the midterms, BTW.

RightWinged on January 11, 2010 at 2:29 PM

barnone on January 11, 2010 at 12:48 PM

[Applause]!

Nuclear power is a gift that keeps on giving. Build a nuke and it turns uranium into wealth for 30 years or more, as long as it doesn’t go ridiculously over budget.

Repairing roads is fine and often necessary, but it’s just maintenance and it creates no new wealth.

And considering that:

1. The economy is just a huge, dynamic physical system; a vast, complex network for distributing goods and services.

2. All dynamic physical systems require energy to run.

Then if you build nukes, you pump more energy into the economy, or at least reduce the cost of energy, and the economy will expand.

I’d also add that you have to give the economy *freedom* to expand by reducing regulatory restrictions. And you also need to reduce taxes to stop bleeding energy out of the system.

See, it’s all just physics.

ZenDraken on January 11, 2010 at 2:55 PM

What exactly is that person on the orange sign shoveling BTW: our dollars into a hole?

Just more shit!

jgdp on January 11, 2010 at 3:09 PM

What exactly is that person on the orange sign shoveling BTW: our dollars into a hole?
Just more shit!

jgdp on January 11, 2010 at 3:09 PM

dirt onto our coffins after a stay in the new Obamacare Hospital where they play “Don’t Fear the Reaper” on the elevator and charge you for the shovel and pine box on the way in….

ted c on January 11, 2010 at 3:15 PM

hotheads–these 40 lb brainstems are a group that we need to understand better and fight with knowledge. Thomas Sowell has a new book, “Intellectuals and Society” and it is a scholarly, but scathing rebuttal at the failure of intellectuals in terms of economic and social policy. I just started it and it’s a book about intellectuals, not for intellectuals (although highly recommended).

It’s more revealing than Liberty and Tyranny was about statist liberal plans, how they go about urban planning, how they see economic resources, freedom etc. Check it out.

ted c on January 11, 2010 at 10:26 AM

+1

Got mine on order from Borders ted c. Can’t wait to get it and review it.

alohapundit on January 11, 2010 at 4:13 PM

Well, at least they created a few jobs by making the signs.

JellyToast on January 11, 2010 at 4:29 PM

I note that AP has rewritten, somewhat, the piece, and that the administration’s defense is now featured early on:

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.”

Paul_in_NJ on January 11, 2010 at 4:33 PM

We are bidding on one of these ARRA funded jobs now. There is an unbelievable amount of money being wasted in this little tiny job that isn’t going to make a difference to anyone. Stacks and stacks of paperwork and it’s way over-engineered.

boomer on January 11, 2010 at 8:25 PM

Comment pages: 1 2