Will Obama's Job Creation Plan Reduce Government Dependency?

[LowlyPion]

But will it work?

https://www.youtube.com/watch?v=m17pz0R_qZo

Will there be more money for traffic cams I wonder?

 

[leopard]

Renewable energy, nice!

 

[Phrak]

But will it work?

https://www.youtube.com/watch?v=m17pz0R_qZo

Will there be more money for traffic cams I wonder?

Wonderful vidio Pion! I can't thank you enough for raising my blood pressure 25 points.

 

[Astronuc]

This is more about job recovery than creating new jobs.

Will the jobs provide decent wages, or will they simply replace the low paying jobs lost?

 

[CaptainQuasar]

Creating higher paying jobs is certainly better, and talking about the fungibility of jobs is important when you're replacing one industry with another, for example, but in the situation we're in now I think it might sort of be looking a gift horse in the mouth to worry about pay rates if they actually manage to create 2.5 million jobs in the current economic environment.

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[Vanadium 50]

It's also perhaps worth pointing out that even the President has limited power in creating jobs. He can want to create 2.5M jobs, but it's not like the President has a button on this desk labeled "create more jobs". Otherwise, it would have been pushed before, probably by Herbert Hoover.

 

[Astronuc]

Creating higher paying jobs is certainly better, and talking about the fungibility of jobs is important when you're replacing one industry with another, for example, but in the situation we're in now I think it might sort of be looking a gift horse in the mouth to worry about pay rates if they actually manage to create 2.5 million jobs in the current economic environment.

⚛​

I think it is important to consider the quality of jobs. One could create twice as many jobs at half the wages/salaries for a given amount of expenditure, but it would mean that twice as many people have reduced spending.

In my area, the minimum price for new house is about $300K, and no builder wants to build for less, although there is one developer who want to build 'high density' housing, which is basically apartments and condos - which are usually small units of low quality - in which people are basically warehoused. I see in that a trend to warehouse the lower middle class just like the tenements/projects were used to warehouse the poor in NY, LA, Chicago and other metropolitan areas. Most kids around here expect to live at home or leave the area for places they can afford to live. On the other hand, college graduates are having a hard time finding well paying jobs. Nevertheless, I'd expect someone starting out to have 2 or 3 room-mates to share expensive and/or live in low cost housing like I did in grad school.

I expect that the 'job creation' comes from government spending on highways, bridges and tunnels, i.e. transportation infrastructure. From what I've seen, they need to improve the quality of design and construction, because a lot of what I've build recently has deteriorated rapidly to roughly the condition that existed when the new construction began - in less than one decade.

 

[Vanadium 50]

I expect that the 'job creation' comes from government spending on highways, bridges and tunnels, i.e. transportation infrastructure. From what I've seen, they need to improve the quality of design and construction, because a lot of what I've build recently has deteriorated rapidly to roughly the condition that existed when the new construction began - in less than one decade.

If that's the case, I wish him the best of luck. In my state, the construction companies have lobbied very hard to use the cheapest material possible. It's in their best interest to build a road, and have to rebuild it every ten years and not every twenty.

 

[CaptainQuasar]

I think it is important to consider the quality of jobs. One could create twice as many jobs at half the wages/salaries for a given amount of expenditure, but it would mean that twice as many people have reduced spending.

But if the larger number of jobs is the number that's needed, because there's a depression, then for half of those people it's not a matter of reduced spending, it's a matter of having a job at all. The people who are seeking jobs to boost their standard of living aren't the target of this effort I don't think. If the choice is between 2.5 million people having to take a job that affords them a lower standard than they're accustomed to, and 1.25 million people not having a job at all we want the first option, don't we?

If this was about strengthening the economy coming from a stable economic position I would totally agree with you, for sure.

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[mgb_phys]

If the choice is between 2.5 million people having to take a job that affords them a lower standard than they're accustomed to, and 1.25 million people not having a job at all we want the first option, don't we?

It depends - both versions have been tried.
Pay 1.25M people minimum wage to dig a hole and 1.25M to fill it in, at least they have jobs.
Pay 100K high wages to build aircraft carriers, they will spend that money on cars, restaurants, movies which will employ 2.4M people and create an economy.

 

[Jimmy Snyder]

There is nothing to stop the gov't from creating jobs if they want to. But history has shown that when they do, they create the wrong jobs. They lack the innovative mindset to funnel resources into new technologies. I expect you could create a lot of jobs by supporting the buggy whip industry. Or they could shore up those automakers whose costs are higher than anyone can afford and whose products are not wanted.

 

[CaptainQuasar]

Buggy whips for all!

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[Moonbear]

I think it is important to consider the quality of jobs. One could create twice as many jobs at half the wages/salaries for a given amount of expenditure, but it would mean that twice as many people have reduced spending.

It's not reduced spending to have a job created where one did not previously exist. That's increased spending. Someone with no income now will have some income.

In my area, the minimum price for new house is about $300K, and no builder wants to build for less, although there is one developer who want to build 'high density' housing, which is basically apartments and condos - which are usually small units of low quality - in which people are basically warehoused. I see in that a trend to warehouse the lower middle class just like the tenements/projects were used to warehouse the poor in NY, LA, Chicago and other metropolitan areas. Most kids around here expect to live at home or leave the area for places they can afford to live. On the other hand, college graduates are having a hard time finding well paying jobs. Nevertheless, I'd expect someone starting out to have 2 or 3 room-mates to share expensive and/or live in low cost housing like I did in grad school.

That'll correct itself. Either they'll move to places like here where housing is cheaper and create new jobs in new locations, or when nobody is buying the $300K houses, the builders will realize they need to build $150 K ones or go bankrupt. Overpriced housing can also help revitalize run-down areas, because young professionals or couples starting out can't afford the established neighborhoods, so start buying into the run-down ones for their starter homes, and build them up and clean up the neighborhood in the process.

I expect that the 'job creation' comes from government spending on highways, bridges and tunnels, i.e. transportation infrastructure. From what I've seen, they need to improve the quality of design and construction, because a lot of what I've build recently has deteriorated rapidly to roughly the condition that existed when the new construction began - in less than one decade.

I doubt it. If unions were tossed out, maybe, but Obama is a union supporter, so won't be the one to do that. So, as long as the unions control highway construction, that's not going to be a place to create a lot of new jobs. It's a good idea and a good place for jobs, but unions are in the way.

 

[russ_watters]

It's also perhaps worth pointing out that even the President has limited power in creating jobs. He can want to create 2.5M jobs, but it's not like the President has a button on this desk labeled "create more jobs". Otherwise, it would have been pushed before, probably by Herbert Hoover.

Actually, the government [not the president alone] can just decree job creation. It's simple: they can literally go out and hire 2.5 million people and pay them directly.

The way this is actually going to work, though, appears to be only slightly different: with government contracted work. Public works projects, research projects, etc. If you decide build a new road, you take a bunch of construction workers who are currently idle and put them to work. And obviously, the government has pressed that button before.

Regarding cost, it is easy to calculate the direct cost: if you create 2.5 million jobs at an average of $75K per job (remember, what you get paid is much less than what it costs to employ you), that's $187.5 Billion. Now those people will take their government job and pay taxes on it, giving some of that money back to the govt. And many of those people would have been on welfare and/or unemployment compensation, giving more of it back. In the grand scheme of things, $187B not a terrible sum of money, but let's hope he creates useful jobs with it.

There is a secondary effect of artificial job creation, though: via supply and demand, it increases the cost (salary) of other workers in those industries. Now that sounds good, but then that decreases profits, causes layoffs, causes inflation, etc.

So am I actually in favor of this or against it? I'm not sure. In general, I dislike government intervention into the economy, though.

 

[mgb_phys]

It's simple: they can literally go out and hire 2.5 million people and pay them directly.

And thus, the DMV was born

Now those people will take their government job and pay taxes on it, giving some of that money back to the govt. And many of those people would have been on welfare and/or unemployment compensation, giving more of it back.

And in the case of the DMV in expensive mental health facilities.

In the grand scheme of things, $187B not a terrible sum of money, but let's hope he creates useful jobs with it.

It's about the budget for the army's Future Combat Systems program (and so historicaly about 25% of the final cost).
These smart weapons could easily be replaced by DMV clerks.

 

[Vid]

I don't know about other states, but here in Louisiana I see public works projects being a major boon to the economy. Most of the workers in South Louisiana are general labor workers that support the oil industry. An increase in public works projects would allow unemployed general labors to find good well paying jobs. Considering that average wage in Louisiana is only 30k, these jobs would be a huge boost to an economy torn apart by recent hurricanes. Not to mention that fact that public works projects are already needed since a lot of infrastructure was torn apart by these storms.

 

[mgb_phys]

It's also an industry that has been hit by the construction downturn, so there is a lot of spare capacity in everything from the quarries, through the cement plants, the plant hire and specialists like engineers/surveyors.
Irrespective of govt bailouts this is a really good time to start large civil eng projects.

 

[misgfool]

Renewable energy is nice, but how much is Obama going to invest in research and construction of nuclear plants?

 

[Ivan Seeking]

I doubt it. If unions were tossed out, maybe, but Obama is a union supporter, so won't be the one to do that. So, as long as the unions control highway construction, that's not going to be a place to create a lot of new jobs. It's a good idea and a good place for jobs, but unions are in the way.

Why? Unions don't want jobs?

 

[Ivan Seeking]

Renewable energy is nice, but how much is Obama going to invest in research and construction of nuclear plants?

I don't know if any budget plans have been announced, but his position generally is as follows:

• Safe and Secure Nuclear Energy. Nuclear power represents more than 70 percent of our noncarbon generated electricity. It is unlikely that we can meet our aggressive climate goals if we eliminate nuclear power as an option. However, before an expansion of nuclear power is considered, key issues must be addressed including: security of nuclear fuel and waste, waste storage, and proliferation. Barack Obama introduced legislation in the U.S. Senate to establish guidelines for tracking, controlling and accounting for spent fuel at nuclear power plants. To prevent international nuclear material from falling into terrorist hands abroad, Obama worked closely with Sen. Dick Lugar (R‐IN) to strengthen international efforts to identify and stop the smuggling of weapons of mass destruction. As president, Obama will make safeguarding nuclear material both abroad and in the U.S. a top anti‐terrorism priority. In terms of waste storage, Barack Obama and Joe Biden do not believe that Yucca Mountain is a suitable site. They will lead federal efforts to look for safe, long‐term disposal solutions based on objective, scientific analysis. In the meantime, they will develop requirements to ensure that the waste stored at current reactor sites is contained using the most advanced dry‐cask storage technology available.

http://www.barackobama.com/pdf/factsheet_energy_speech_080308.pdf

One of his primary areas of interest has been the tracking and management of nuclear materials globally.

 

[mgb_phys]

It doesn't create jobs quickly enough.
Even assuming you can bypass the 20 year delay of the zoning / public inquiry process, it takes many years of design before you are actually paying union members to pour concrete.

There is a rather large precedent for a president to use renewable energy to create jobs.

 

[Astronuc]

Barack Obama introduced legislation in the U.S. Senate to establish guidelines for tracking, controlling and accounting for spent fuel at nuclear power plants.

Umm - we've had a system in place for the last 30+ years that identifies and tracks spent fuel. I even have two older versions of the database, and the previous company for whom I worked maintained that database until recently. We don't need a new set of rules.

The big problem to date is Harry Reid and the other opponents to Yucca Mountain repository.

We have safe transportation and storage containers, and the means to deliver the spent fuel to Yucca Mountain or any other interim storage site.

 

[Ivan Seeking]

Umm - we've had a system in place for the last 30+ years that identifies and tracks spent fuel. I even have two older versions of the database, and the previous company for whom I worked maintained that database until recently. We don't need a new set of rules.

The big problem to date is Harry Reid and the other opponents to Yucca Mountain repository.

We have safe transportation and storage containers, and the means to deliver the spent fuel to Yucca Mountain or any other interim storage site.

I would assume that Obama is looking for higher standards.

 

[Ivan Seeking]

This is a good example of what worries me about nuclear power. This is hardly an unreasonable demand, but even that was too much to ask.

Obama sponsored legislation that would have required nuclear plant owners to notify state and local authorities of radioactive leaks, but the bill failed to pass in the full Senate after being heavily modified in committee.[75]

http://en.wikipedia.org/wiki/Barack_Obama#cite_note-74

When residents in Illinois voiced outrage two years ago upon learning that the Exelon Corporation had not disclosed radioactive leaks at one of its nuclear plants, the state’s freshman senator, Barack Obama, took up their cause.

Mr. Obama scolded Exelon and federal regulators for inaction and introduced a bill to require all plant owners to notify state and local authorities immediately of even small leaks.

...While he initially fought to advance his bill, even holding up a presidential nomination to try to force a hearing on it, Mr. Obama eventually rewrote it to reflect changes sought by Senate Republicans, Exelon and nuclear regulators. The new bill removed language mandating prompt reporting and simply offered guidance to regulators, whom it charged with addressing the issue of unreported leaks...

http://www.msnbc.msn.com/id/22971762/

 

[mheslep]

There is nothing to stop the gov't from creating jobs if they want to. But history has shown that when they do, they create the wrong jobs. They lack the innovative mindset to funnel resources into new technologies. I expect you could create a lot of jobs by supporting the buggy whip industry. ...

I'm looking for the evidence that the government can create any net jobs by mailing checks, wrong, right, or in between. The standard rule is something like 40k jobs created per $B spent, but then that money has to first be taken out of the private sector where it robs a like number of jobs there. Furthermore interest has to paid on that money if spent in deficit as it is now.

 

[Ivan Seeking]

The money is obtained through foreign credit. We used this to pay for the wars as well.

Of course we just print more money as well.

 

[mheslep]

Though the foreign purchased share of US debt is increasing, the majority of US debt is still held and purchased by US citizens and entities, and the majority of that US share comes directly through the investment of the US Social Security trust fund.
http://www.treasurydirect.gov/govt/reports/pd/feddebt/feddebt_ann2007.pdf

In any case, whether the capital investment pool diverted to the US government is domestically sourced or foreign, that capital is not then available to create jobs in the private sector.

 

[Astronuc]

This is a good example of what worries me about nuclear power. This is hardly an unreasonable demand, but even that was too much to ask.

http://www.msnbc.msn.com/id/22971762/

Then MSNBS article is about the legislation in response to the discovery of some long term leaks in which some tritium left the site.

At least as disturbing for local residents was the revelation that Exelon believed the tritium came from millions of gallons of water that had leaked from the plant years earlier but went unreported at the time. Under nuclear commission rules, plants are required to tell state and local authorities only about radioactive discharges that rise to the level of an emergency.

I don't know the specifics, but it was subsequently discovered and people notified. In order to make a report a problem, one has to discover the problem.

If there is a malfunction at plant, it is usually reported, and usually in a daily event report. And sometimes reports are retracted when it turns out not to be a significant or reportable event.

The DOE monitors the nuclear utility industry and tracks enriched U (in its various forms), other special nuclear material, and ultimately the disposition of spent fuel. It is comprehensive and held to high standards. The database NMMSS management has been moved to a new group because one of the enrichment companies bought the company that was previously managing it and there was a conflict of interest in having access to the database, since it allows anyone who understandst the data to see exactly the demand for enrichment services.

Also bear in mind, there is a big difference between the commercial nuclear industry and the government DOE/DOD programs. The DOE has sometimes worked to standards below that required of the commercial industry (e.g. Rocky Flats had a big problem with accountability of Pu-239, and they could not account for kg's or roughly enough to make a warhead or so).

 

[drankin]

As far as the gov't "creating" jobs (assuming this means gov't jobs), I'm concerned about a significant amount of Americans relying on the gov't in order work. Millions of us do but a good amount is by contract to private companies. All this would do is require more taxes from Americans as we will be more dependent on the gov't for services that we typically get from the private sector. I don't see a lot of evidence that working for the gov't inspires entrepreneur enterprise which is a significant reason we are a world power. I haven't been following the latest "plan" that Obama has cooking but from distance it makes me nervous.

 

[mheslep]

From the MSNBC piece

..."This legislation is not about whether tritium is safe, or at what concentration or level it poses a threat,” he said. “This legislation is about ensuring that nearby residents know whether they may have been exposed to any level of radiation generated at a nuclear power plant as a result of an unplanned, accidental or unintentional incident."...

Perhaps a change to some other finite limit other than the 'emergency' levels than the current law requires was arguable, but an 'any level' or amount standard is completely impractical as a policy. That statement is either a pander to the anti-nuclear crowd, or it announces a misunderstanding of nuclear power.

 

[cronxeh]

This plan will not work. 8% unemployment in 2009 here we come!

 

[mheslep]

As far as the gov't "creating" jobs (assuming this means gov't jobs), I'm concerned about a significant amount of Americans relying on the gov't in order work. ...

One in six now, working directly for some level of government.
http://www.independentsector.org/PDFs/npemployment.pdf

 

[mgb_phys]

Add in all those working in the defence industries, which are effectively government jobs, and it gets worse.

 

[Ivan Seeking]

It worked once as Roosevelt's Works Projects. The mistake that Roosevelt made was that he failed to capitalize the banks, which we have already done.

 

[drankin]

Add in all those working in the defence industries, which are effectively government jobs, and it gets worse.

But those are private contracts. My company does a lot of military aerospace work. I don't think that necessarily counts. I'm more concerned about working directly for Uncle Sam. Excluding military.