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LAMBRO: Obama’s duct-tape economic plan
Recycled ideas cast a bleak future
President Obama’s second-term wish list to jump-start his stalled, job-starved economy looked a lot like his warmed-over, half-baked proposals of the past.
With rare exceptions, Mr. Obama’s State of the Union address was a costly laundry list of more big-government spending programs aimed at his party’s political base.
More job-training programs? There are 47 different federal job-training programs right now, costing $18 billion a year, according to the Government Accountability Office. There are 51 other programs that offer job-training assistance.
With the unemployment rate rising last month to nearly 8 percent and likely heading higher, and economic growth screeching to a halt in the fourth quarter, Mr. Obama is under pressure to come up with some new ideas to put America back to work and reboot the economy’s moribund growth rate.
The ideas he presented to Congress, though, were a hastily prepared, duct-taped patchwork of proposals that came right out of a 1930s-style Democratic playbook, including many that have been rejected on Capitol Hill in both chambers.
Perhaps the oldest liberal canard was his proposal to increase the minimum wage from $7.25 to $9 an hour by 2015, and index future increases to inflation. Nothing will destroy jobs faster, especially among teenagers, young adults, minorities and the middle class.
While these are the groups he’s targeted the most for assistance, they have suffered the most under his anti-job, anti-growth policies and have the highest unemployment rates.
A Democrat-controlled Congress raised the minimum wage by 10.6 percent in July 2009. “In the ensuing six months, nearly 600,000 teen jobs disappeared, even with nearly 4 percent growth in the economy,” says William Dunkelberg, chief economist for the National Federation of Independent Business, the nation’s small-business lobby.
Small businesses, which create the bulk of all jobs in our country, are struggling to survive in Mr. Obama’s weak economy. Raising their labor costs now will result in steep job layoffs, hiring freezes or both.
His costly, government-centered blueprint for new jobs has failed industrial policy written all over it. Ask Japan, which has tried every public works spending idea there is but is still sinking into a recession.
He wants $50 billion for more infrastructure projects in roads and bridges, on top of the $800 billion-plus he spent in his failed 2009 “stimulus” program; $15 billion to repair and tear down homes in blighted neighborhoods, an idea he proposed in 2011; a temporary $6 billion tax credit to assist communities hit hard by factory closings; and a $1 billion slush fund to develop “manufacturing innovation institutes” across the country.
He called for yet another green-energy fund on top of the scandal-ridden, multibillion dollar Energy Department fund that’s been bankrolling a lengthening list of politically connected energy deals that have since gone bankrupt.
Mr. Obama’s latest brainstorm is an Energy Security Trust paid out of federal oil and gas revenues to finance research into exotic biofuels from pond algae, an idea that was being funded under his earlier clean-energy programs that have wasted hundreds of millions of dollars.
One of them is a $150 million boondoggle from his 2009 economic recovery act that went to a battery cell firm, LG Chem Michigan (a subsidiary of South Korea’s giant LG), to make automobile cells. To date, battery production has not begun, the program is rife with mismanagement, and only half of the 440 jobs have been filled, according to an inspector general’s report. Instead, an audit found that much of the federal money went to pay workers who have spent their time playing cards and video games, watching movies and doing volunteer work at animal shelters and community groups.
Then there were the less-than-truthful claims sprinkled throughout Mr. Obama’s address that conveniently left out key statistics that show the economy’s performance under his policies have not lived up to his hype.
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