Friday, May 29, 2009

Creating jobs and employing people, or, Bastiat x 100 

A project that costs $100 million (though I'd guess this number probably doesn't include the land costs) to save almost $1 million a year? There's a name for that�a lousy investment. And creating 200 jobs? Not really. The project employed 200 people. Not the same thing.
Russ Roberts discussing this solar panel project that is supposed to also reduce the same amount of pollution as 4,000 new cars, out of a total cars sold in the U.S of over nine million annually. (Hey, I thought government was trying to sell more cars?) I originally spotted this on David Strom's Twitter feed.

I'm often reminded in these explanations of "jobs created or saved" of the Steve Martin line on how to be a millionaire. �(After reading the transcript, I thought "I just found Tim Geithner's accountant.") �Anyone can create a job; the Kirby salesman who pours dirt on your carpet creates a job for a guy with a vacuum cleaner. �But to do that, you first have to destroy value by soiling the carpet. �Government can create jobs by burying banknotes in bottles in coal mines, but even if they print the notes it eventually destroys value through the inflation tax. �

The Administration has put out (under watchful sheriff Joe Biden's signature) a list of 100 projects for 100 days of the ARRA. �I think this one might be #84. �Here's a couple others:

#15 links to a Nashua (NH) Telegraph article which features a road firm that says it was going to lay off 75 workers until they got some Uncle Sugar:
Continental Paving, Mark Charbonneau's family-run business, landed a $10 million contract to reconstruct and pave a section of the F.E. Everett Turnpike in Bedford, as part of a larger project to connect the highway with Manchester-Boston Regional Airport.

Continental's contract came out of a $130 million package of stimulus money targeted to build and repair highways and bridges in New Hampshire.

The $10 million contract and the ability of similar companies to land stimulus-funded work enabled Continental to keep its 300-person staff intact, Charbonneau said. Without any stimulus-driven projects, the many companies in the state's road construction industry would have been competing for fewer contracts, and Continental would have had to lay off 75 workers, he said. ...

Continental Paving is only one of a few New Hampshire companies that at this time can concretely measure whether the economic stimulus package will keep as many as 16,000 people working in the Granite State.
I drove that road very recently. The road is there, it works just fine. NH has a 6.3% unemployment rate, well below the national average. �And how long will that work last? �What's the added value of the repaved, reconstructed road? �And why do we believe Mr. Charbonneau has "concretely measured" the impact of the economic stimulus? �He really was laying 75 workers off? �For how long? �The money comes out to $133,333 a job "saved". �Again, like the solar panels, seems like a lot of money for a job that probably takes a few months, to reconstruct and pave a road that already works.

#49 is a story about jobs saved at Anderson Windows of Bayport, MN, where the plant is bringing back 250 of 560 workers laid off last winter...�
...a move made possible in part by the tax credit for energy-efficient home improvements. Andersen Windows also cites the first-time homebuyer credit as another factor, as this tax credit helps to get existing homes off the market so that builders can start building again.
�But the company has laid off workers five times since 2007, and shed over 4,000 jobs. �It was possible that come April, the company would have called back some of those workers; according to KARE 11, only fifty of the job cuts were permanent, all of those in the office and management staff. It instead recalled them in March (at least 180 of them.) �How long were those jobs going to be gone if there was no stimulus? �

Gary Gross works on #6. �$22 million is being used to restore some engines are cars for Amtrak. �
At best, the restoration projects will keep union people already working for Amtrak busy a little while. Because people understand that the money that�s spent on this project is onetime money, the efffect will be limited. People that get this type of money understand that this money won�t come in month after month.
He's right, and that's good work, Padewan.

I'd encourage other readers to go out and find the stories behind the other 96-97 projects Sheriff Biden is trolling for the media to use. �Dig in and ask yourself: �What value is created? �What value was destroyed? �How many of the jobs created are temporary jobs and how many are permanent? �What happens after the project is completed? �

Many years ago it was said:
Let us get to the bottom of things. Money creates an illusion for us. To ask for co-operation, in the form of money, from all the citizens in a common enterprise is, in reality, to ask of them actual physical co-operation, for each one of them procures for himself by his labor the amount he is taxed. Now, if we were to gather together all the citizens and exact their services from them in order to have a piece of work performed that is useful to all, this would be understandable; their recompense would consist in the results of the work itself. But if, after being brought together, they were forced to build roads on which no one would travel, or palaces that no one would live in, all under the pretext of providing work for them, it would seem absurd, and they would certainly be justified in objecting: We will have none of that kind of work. We would rather work for ourselves.

Having the citizens contribute money, and not labor, changes nothing in the general results. But if labor were contributed, the loss would be shared by everyone. Where money is contributed, those whom the state keeps busy escape their share of the loss, while adding much more to that which their compatriots already have to suffer. ...

As a temporary measure in a time of crisis, during a severe winter, this intervention on the part of the taxpayer could have good effects. It acts in the same way as insurance. It adds nothing to the number of jobs nor to total wages, but it takes labor and wages from ordinary times and doles them out, at a loss it is true, in difficult times.

As a permanent, general, systematic measure, it is nothing but a ruinous hoax, an impossibility, a contradiction, which makes a great show of the little work that it has stimulated, which is what is seen, and conceals the much larger amount of work that it has precluded, which is what is not seen.
Apply this, young Jedi, to the hundred.

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