The Obama Administration's Economic Bragging: Another Response

by Pejman Yousefzadeh on February 17, 2010

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My friend and colleague, Francis Cianfrocca, has an op-ed for CBS News that further refutes Obama Administration spin regarding its stimulus package. Key passage:

Our borrowed stimulus dollars that we’ll have to pay back someday, and will likely have to start paying much higher interest rates on much sooner than someday, are going to sectors that don’t need the help anyway. You might as well take the world’s investors’s money and plow it into overvalued US housing. Oh wait, we’re doing that too, thanks to taxpayer-supported Fannie Mae and Freddie Mac.

So now the New York Times considers it newsworthy that 21 states, including Mississippi, are doing something shocking with some of their stimulus money: they’re directly supporting the creation of private sector jobs.

Republican governor Haley Barbour did this by creatively reinterpreting a tiny sliver of Mississippi’s stimulus grant that was intended to support welfare payments. This is different from Obama’s genius idea of giving tax credits for hiring people. (Just like Cash for Clunkers, that idea doesn’t change the economics of hiring, and the credits are mostly awarded for people that would have been hired anyway.)

Rather, the Mississippi program directly pays the salaries of qualifying new hires, on a steadily decreasing scale from 100% upfront to zero after nearly a year. I’m a business manager, and so far everything Washington has proposed, including expansions of SBA loans, has left me cold. For the first time, I found myself saying “YES. If I had that program, I’d hire people tomorrow.”

Don’t you think this ought to be the FIRST thing we should do with stimulus money, rather than the last?

One hopes that someone in the Obama Administration will read Francis’s commentary, and act on it. And by “act on it,” I don’t mean “have Robert Gibbs come out to the press room and trash Francis Cianfrocca.”

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