Eideard

It was the British economist John Maynard Keynes who famously wrote that ideas, “both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed, the world is ruled by little else.” Right now, I’m worried about the damage that might be done by one particularly wrong-headed idea: the notion that, in stark contrast to Keynes’s teaching, government spending destroys jobs.

No, that’s not a typo. House Speaker John Boehner and other Republicans regularly rail against “job-killing government spending.” Think about that for a minute. The claim is that employment actually declines when federal spending rises. Using the same illogic, employment should soar if we made massive cuts in public spending—as some are advocating right now…

It is easy, but irrelevant, to understand how someone might object to any particular item in the federal budget—whether it is the war in Afghanistan, ethanol subsidies, Social Security benefits, or building bridges to nowhere. But even building bridges to nowhere would create jobs, not destroy them, as the congressman from nowhere knows. To be sure, that is not a valid argument for building them…

For example, the large fiscal stimulus enacted in 2009 was not “paid for.” Yet it has been claimed that it created essentially no jobs. Really? With spending under the Recovery Act exceeding $600 billion (and tax cuts exceeding $200 billion), that would be quite a trick…In fact, according to Congressional Budget Office estimates, the stimulus’s effect on employment in 2010 was at least 1.3 million net new jobs, and perhaps as many as 3.3 million…

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The world’s largest human migration — the annual crush of Chinese traveling home to celebrate the Lunar New Year, which is this Sunday — is going a little faster this time thanks to a new high-speed rail line.

The Chinese bullet train, which has the world’s fastest average speed, connects Guangzhou, the southern coastal manufacturing center, to Wuhan, deep in the interior. In a little more than three hours, it travels 664 miles, comparable to the distance from Boston to southern Virginia. That is less time than Amtrak’s fastest train, the Acela, takes to go from Boston just to New York.

Even more impressive, the Guangzhou-to-Wuhan train is just one of 42 high-speed lines recently opened or set to open by 2012 in China. By comparison, the United States hopes to build its first high-speed rail line by 2014, an 84-mile route linking Tampa and Orlando, Fla.

Speaking at that site last month, President Obama warned that the United States was falling behind Asia and Europe in high-speed rail construction and other clean energy industries. “Other countries aren’t waiting,” he said. “They want those jobs. China wants those jobs. Germany wants those jobs. They are going after them hard, making the investments required.”

Indeed, the web of superfast trains promises to make China even more economically competitive, connecting this vast country — roughly the same size as the United States — as never before, much as the building of the Interstate highway system increased productivity and reduced costs in America a half-century ago…

On a recent Wednesday, the 2:50 p.m. bullet train glided smoothly out of Guangzhou’s station and within four minutes was traveling more than 200 miles an hour. Practically every seat on the 14-car train was full of migrants heading home for Chinese New Year…

China’s response to the Great Recession was to invest federal funds in infrastructure capable of moving people as well as commodities. The Bullet Train project was targeted at 2020 in the original plan. When the recession hit, the emergency decision was made to accelerate construction.

Hundreds of thousands of workers got instant jobs. Manufacturers of components – global and domestic – benefitted from the new pace of production. And we’re told by conservative beancounters we should worry more about deficits than jobs or results.

Daylife/Getty Images used by permission

Companies in the U.S. expanded in January at the fastest pace in more than four years as orders and employment increased.

The Institute for Supply Management-Chicago Inc. said today its business barometer climbed to 61.5, the highest level since November 2005, from 58.7 last month. Readings greater than 50 signal expansion.

Government stimulus has spurred gains in demand here and abroad that are reducing inventories, paving the way for manufacturers to step up output. Ford Motor Co. is among companies that are beginning to hire again, setting the stage for stronger spending in coming months…

The group’s gauge of orders climbed to 66.4 from 64.4 the prior month and its measure of employment jumped to 59.8, the highest level since April 2005, from 47.6…

Economists watch the Chicago index for an early reading on the outlook for overall U.S. manufacturing, which makes up about 12 percent of the economy. Its membership includes both manufacturers and service providers, making the gauge a measure of overall growth…

The world’s largest economy expanded at a 5.7 percent pace from October through December, its fastest growth in six years, the Commerce Department reported today. Economists surveyed this month forecast the world’s largest economy will grow 2.7 percent this year.

This sort of information grows and changes endlessly at sources like Bloomberg. Everything from planning to investing, economics to traffic management decisions depends on accurate information, useful forecasting.

From Shanghai to San Jose, Milan to Birmingham, people actually building commerce are a couple of days ahead of this post – and your Congressman, your governor, might just skim a 1-paragraph condensation 4 to 8 weeks from now.

Pockets of America are haltingly on the mend, and the Beth Court cul-de-sac here is one of them. A dozen lives unraveled on the block during the recession; now the empty houses are full, and Mr. Winkler and the other fathers are working again.

The remnants of financial disaster linger. Many neighbors have no credit cards. Repossessed family cars have not been replaced. Vacation destinations remain for most the stuff of advertisements in newspapers from which coupons continue to be clipped.

But hanging on has been replaced, in part, by holding steady.

The teacher who got a pink slip last spring has been hired by a new school, and the guy on the corner who had struggled for months with the bank over his mortgage finally got a loan modification. The lawn of an empty house, littered with broken bikes and weeds over the summer, has been made pristine once more by its new owners…

Beginning last January, The New York Times made regular visits to Beth Court, about 60 miles east of downtown Los Angeles, to chronicle how the foreclosure crisis had reshaped a middle-class neighborhood. Four of the eight houses went through foreclosure, and the others barely escaped the same fate. Beth Court was a microcosm of a nation in deep recession, a block of neighbors whose bad choices — often with the complicity of lending agencies — came crashing into a global economic downturn.

Now, a year later, California’s unemployment rate continues to grow, its housing market remains depressed and the state’s fiscal situation is dire. But the economic and policy shifts that are slowly changing parts of the country are also making a mark here…

RTFA. Interesting, anecdotal tales. Not especially different from my own little community of about a hundred families.

We know who’s still out of work and who isn’t. And the good news is that there is good news. More pickup trucks heading out at the crack of dawn to a jobsite instead of sitting in the driveway.

Googling for a minute, here’s a home for $95K just east of Indianapolis

Most affordable: Indianapolis

Median home price: $105,000
Median income: $68,100
Affordability score: 94.5%

America’s most affordable housing market is the 33rd largest metro area in the United States, with 1.7 million people…

The turmoil in the auto industry, which Indianapolis had been closely associated with, has hurt the city. But increased diversification, which has made pharmaceutical companies, banks government agencies and insurers all important employers, has helped keep job losses in check. The unemployment rate was just 7.7% in September, according to the Bureau of Labor Statistics, well below the national rate of 9.8% that month.

Least affordable: New York City

Median home price: $425,000
Median income: $64,800
Affordability score: 19.2%

Home prices can be staggeringly high in many New York City metro area communities, but median income is not commensurately high; it’s under $65,000. That combo makes it the country’s least affordable major metro area…

After holding up better and longer than most housing markets, sales and prices around New York City have started to experience greater declines. The market there is highly influenced by what’s happening on Wall Street; when financial markets sneeze, the real estate industry there says “God bless you” with feeling.

Here in New Mexico, we’re still <8% unemployment rate – for citizens and legal residents.

A regional biggy in home construction – who simply pulled up and went on vacation when the bottom fell out of sleazy sub-prime mortgages – reappeared a few weeks ago in Albuquerque. Debt-free, still solid ownership of the land where they had previously started subdivisions, they've sold 3 lots in a week and have started moving dirt. And the mortgages are worth more than paper, this time.

Daylife/Getty Images used by permission

The best symbol of the $787 billion federal stimulus program turns out not to be a construction worker in a hard hat, but rather a classroom teacher saved from a layoff.

That’s reason enough for the Republican Party to throw a hissy-fit. Rating education a higher priority than infrastructure? There’s nothing to be skimmed off for lobbyists or military contractors.

On Friday, the Obama administration released the most detailed information yet on the jobs created by the stimulus. Of the 640,239 jobs recipients claimed to have created or saved so far, officials said, more than half — 325,000 — were in education. Most were teachers’ jobs that states said were saved when stimulus money averted a need for layoffs…

Hard hats could surpass teachers next year, as more construction projects get under way. In Florida, for instance, one of the biggest infrastructure projects is its plan to build the Indian Street Bridge in Martin County. But with a big, complex project like that, it takes a while before construction can start. That project, which will cost more than $72 million, claims to have saved or created just one job so far…

Officials did not count jobs that were indirectly created by the $84 billion pumped into the economy through tax cuts so far, or from the billions of dollars’ worth of unemployment benefits and aid to states for Medicaid. If those were included, the administration estimated, the tally of jobs saved or created would rise to more than 1 million…

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The best-known product of LANL

No one knows for sure what is buried in the Manhattan Project-era dump here. At the very least, there is probably a truck down there that was contaminated in 1945 at the Trinity test site, where the world’s first nuclear explosion seared the sky and melted the desert sand 200 miles south of here during World War II.

But now a team of workers is using $212 million in federal stimulus money to clean up the 65-year-old, six-acre dump, which was used by the scientists who built the world’s first atomic bomb. They are approaching the job like an archeological dig — only with even greater care, since some of the things they unearth are likely to be radioactive, while others may be explosive.

The dump has become part of the $6 billion stimulus program to clean up the toxic legacy of the arms race, which is one of the biggest sources of direct federal contracts in the $787 billion stimulus act. More than $1.9 billion is being spent at the Hanford site in Washington, the home of the nuclear reactor that made the plutonium for the atomic bomb that was dropped on Nagasaki. Another $1.6 billion is being spent cleaning up a Savannah River site, in South Carolina.

After the stimulus bill passed, some Republicans questioned the wisdom of devoting so much money to nuclear cleanups, noting that the Department of Energy’s environmental management program had been bedeviled by cost overruns in the past…

Work that was delayed, diverted, disputed by conservative beancounters for decades. There is nothing more frustrating than political hacks who lament disbursing funds for the clean-up of their pet weapons – more than the life and safety of ordinary citizens affected by radioactive detritus.

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What sort of counterfeit do you need?

It would not ordinarily go down in the annals of crime. But when Robert Fitzsimmons was arrested this summer and accused of cashing a check made out to his long-dead father at a Pay-O-Matic check cashing store in Manhattan, he became one of the first people in the country accused of stealing some of the $787 billion in federal stimulus money.

At issue was one of the millions of $250 stimulus checks that were sent to all Social Security recipients in May; Mr. Fitzsimmons was accused of cashing one that was made out to his late father, according to a complaint filed in Federal District Court in Manhattan, which goes on to accuse him of stealing Social Security money for at least four years. His lawyer, Julia Gatto, said he intended to plead not guilty.

Compared with the immense size of the stimulus program, the actual number of arrests so far has been microscopic. Earl E. Devaney, the chairman of the Recovery Accountability and Transparency Board, the watchdog for stimulus money, said recently that federal prosecutors were looking at only nine stimulus-related cases, including accusations of Social Security fraud and of businesses improperly claiming to be owned by women and members of minorities.

“Quite frankly, I’m a little surprised it’s that small,” Mr. Devaney testified recently before the Senate, explaining that his office passes along questionable expenses to the various federal inspector general offices following the money, as well as to the Department of Justice. “I know, from talking to them, they’re very interested in sending some very loud signals early, as often as they can, with this money.”

The small number of cases is partly a function of how much stimulus money has been spent so far, and how it has been spent. While more than $150 billion of it has been pumped into the economy, according to a recent report by the White House, some $62.6 billion of that was in the form of tax cuts. Of the rest, $38.4 billion was sent to states for fiscal relief; $30.6 billion was spent to help those affected by the recession by expanding unemployment benefits and other safety-net programs, and $16.5 billion was spent in areas like infrastructure, technology and research.

Will the fraud investigators check up on what the states do with the money?

As much as I may distrust my fellow citizens, I trust state governments even less. They practically invented graft.

And that ain’t all…

Brazil has come out of recession after its economy grew in the April-to-June quarter.

The largest economy in Latin America expanded by 1.9% in the second quarter from the previous three months.

Data also showed Sweden emerged from recession on Friday, a sign that economies are starting to recover from the global economic downturn. Other countries that have come out recession include the eurozone’s largest economies, Germany and France.

Most countries have enacted large stimulus packages to pull themselves out of the slump.

Brazil has poured money into large-scale public infrastructure projects, cut taxes on new cars and passed tax breaks on companies and individuals.

The return to growth means that Brazil’s recession was comparatively short, amounting to just two quarters of negative growth.

I guess they never learned to lie, cheat and steal over housing values, derivatives, etc., etc..

Daylife/AP Photo used by permission

White House staff and congressional lawmakers are meeting today to try to find a way to keep the U.S. government’s “cash for clunkers” program running, White House spokesman Robert Gibbs said.

The popular program remains in operation, Gibbs said.

“If you were planning on going to buy a car this weekend, using this program, this program continues to run,” Gibbs said at a morning White House briefing. “If you meet the requirements of the program, the certificates will be honored.”

Gibbs said the Obama administration and congressional leaders are working today “to find and develop ways to continue to fund” this $1 billion program, which may be out of cash after a week of operation.

The incentive program, formally known as the Car Allowance Rebate System, provides credits of as much as $4,500 to new-auto buyers who turn in an older vehicle to be scrapped. Lawmakers had expected the $1 billion program to generate about 250,000 sales and to have enough money to last until about Nov. 1.

Har!

Especially good for a laugh at the dimwits who said this was a waste of time. Tell that to the folks who bought new cars – and the dealers who sold them!