Wednesday night, the House of Representatives overwhelmingly passed H.R.3567; The Welfare Integrity Now for Children and Families Act of 2011; which makes it illegal to use an EBT card in a strip club, liquor store or casino. The concern began, shortly after welfare recipients were issued funds electronically through ATMs, when Welfare Reform passed in 1996. Since then there has been a disturbing trend of welfare not being spent on the things people think welfare should be spent on.

And I don’t understand that concern. It is the theory of most Democrats that giving money to people stimulates the economy. It should be of no concern to anyone whether that money is used to stimulate patrons of a strip club, liquor store owners, or casino magnates (who BTW are often HUGE political contributors).

The bill is almost completely futile. It won’t insure that welfare money is not spent at a strip club; it only means that the ATM at the gas station across the street from the strip club is going to see a lot more traffic.

This is just the kind of government bias, that gives legitimate business a bad name. Certainly those girls are working as hard as any SEIU employee; whose pensions were paid out of stimulus funds, while they protested in Wisconsin. Money spent on bikini wax, cover stick, and glittery lingerie will trickle down through the economy just like any other stimulus package.

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“Why Are Obama’ Critics So Dumb?” That’s the question posed by Andrew Sullivan in the cover story of this week’s Newsweek.

But you’d have to be stupid, fanatical, and dishonest to argue–as Trig Truther Sullivan does–that Barack Obama’s failures are part of an ingenious “long game” that is destined to succeed.

If this is the best Obama’s supporters can do, Obama’s only hope for re-election is the weak Republican field.

Sullivan, who claims to care about national debt, begins by arguing, contrary to reality, that Obama’s massive $787 billion stimulus (actually, $862 billion) turned the economy around. He offers no proof other than the post hoc, ergo propter hoc fallacy familiar from basic economics. Sullivan also ignores the composition of the stimulus, which shoveled cash to cronies and bloated big states with their massive public sector obligations.

In addition, Sullivan claims that Obama’s auto bailout succeeded–when in fact it pushed aside property rights and subsidized failed “green” cars, rather than allowing car makers to rebuild through normal bankruptcy. He also commends Obama for continuing George W. Bush’s bank bailouts–but does not mention the Dodd-Frank financial “reforms” that enshrine “too big to fail,” hurt small businesses and fail to address Fannie Mae and Freddie Mac.

Next, Sullivan tries to defend Obama on taxes, pointing out that the president passed tax cuts as part of the stimulus. He ignores the numerous new taxes and tax increases that Obama signed into law–from higher cigarette taxes to the many ObamaCare taxes–as well as the glaring fact that Obama has been campaigning for the past several years on the promise to raise taxes on the rich, and would have done so if not for Congress. (more…)

Another tale of OPM addiction. OPM. Other People’s Money.

The problems with ‘green job’ creation and the incompetence of the federal government are both evident when analyzing how a “stimulus” program failed to produce jobs in Wisconsin.

Other than a couple government administrators and about a dozen tech college instructors, the Recovery Act’s Green Jobs Program has not created any jobs in Wisconsin.

Wisconsin received a $6 million award for its version of the green jobs program called Sector Alliance for the Green Economy (SAGE). The stated goal is the “greening” of Wisconsin’s workforce. On paper, the US Labor Department expected the money to help place 2,120 Wisconsinites into permanent jobs.

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The fact that Paul Krugman received the Nobel Prize in economics makes sense given that both Al Gore and Obama received the Nobel Peace Prize. But that is the only way that it makes sense.

In his December 29^th column in the New York Times, Keynes Was Right, he continues to make the case that the only reason we haven’t come roaring out of the Great Recession is because we spent too little.

Krugman cites the downturn of 1937 when FDR’s government programs were curtailed and unemployment rose. He says that unlike in that fateful year we should instead redouble our efforts and spend more to prime the economic pump. Austerity is insanity he says. We must spend more as Keynes would have advised, deficits (and inflation) be damned.

Build pyramids as Keynes said we should. So what if the they do not contribute, and probably detract, from the quality of the economy. It is the quantity of economic activity that we are interested in not quality. Get people employed doing whatever. This is the road to prosperity!

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From The Washington Post:

Since the failure of the company, Obama’s entire $80 billion clean-
technology program has begun to look like a political liability for an administration about to enter a bruising reelection campaign.

Meant to create jobs and cut reliance on foreign oil, Obama’s green-technology program was infused with politics at every level, The Washington Post found in an analysis of thousands of memos, company records and internal e-mails. Political considerations were raised repeatedly by company investors, Energy Department bureaucrats and White House officials.

The records, some previously unreported, show that when warned that financial disaster might lie ahead, the administration remained steadfast in its support for Solyndra.

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In the year since the Tea Party arrived in Congress, the movement has managed to change the debate on Capitol Hill, but not the way Washington works.

The Tea Party has stopped President Barack Obama and the Democrats from bailing out profligate state governments, from passing new so-called “stimulus” spending, and from raising tax rates. It has even begun to win bipartisan support for major entitlement reform.

However, the Tea Party has failed thus far to stop the overall growth in the size and cost of government. It passed over a dozen bills that would accelerate economic growth and create new jobs, only to see those bills languish in Harry Reid’s Senate.

In both the debt ceiling and the payroll tax debates, the Tea Party saw its sensible bills rejected in favor of absurd compromises–then found itself being blamed for congressional gridlock.

The key to the Tea Party’s fortunes has been its relationship with the very establishment it dislikes. Where it has found common ground–for example, with House budget chair Paul Ryan–it has been able to promote its agenda of limited government. But when the Tea Party has clashed with Republican leaders–starting with key Senate races in 2010–Democrats have won by dividing conservatives from moderates, House from Senate. (more…)

Remember back in August 2010 when Congress passed the $10 billion “Education Jobs Bill” to create or save some 300,000 teaching, police and firefighter jobs?

Then-Speaker Nancy Pelosi said the legislation “has a direct relationship to the strength of our communities, the education of our children, the safety of our neighborhoods, the stability of the economy of our states, and really points directly to our prospects for the future.”

Turns out the “edujobs” bill also has a direct relationship to the bonuses teachers in Tennessee’s Marshall County school district may soon receive.

Several board members want to use leftover stimulus dollars to hand out one-time bonuses of $500 to teachers and $300 to full-time school staff. They reason that employees have gone without pay raises over the past few years, and the bonuses would help boost morale, reports the Marshall County Tribune.

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High, persistent unemployment and a sluggish economy underscore what all but the most-dedicated supporters of Barack Obama know to be true: The president’s 2009 stimulus program was a massively expensive bust.

Understanding why the stimulus failed is an important step in understanding how the government can—and cannot—goose economic recovery. To get a better sense of how and where the stimulus went wrong, Reason.tv focused on Silver Spring, Maryland, a suburb of Washington, D.C., that’s home to a large number of government contractors and other recipients of money earmarked for the sorts of “shovel ready” projects that were going to bring the economy back to life.

President Obama’s top economic advisor Larry Summers laid out ground rules for how stimulus dollars should be spent: The funds must be ”targeted” at resources idled by the recession, the interventions must be ”temporary,” and they needed to “timely,” or injected quickly into the economy.

None of that turned out to be true. “Even if you were to believe that government spending can trigger economic growth,” says Veronique de Rugy, Reason columnist and senior research fellow at the Mercatus Center, “the money is never spent in a way that’s consistent with the conditions laid out by the Keynesians for it to be efficient.”

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Much has already been revealed about the Obama administration’s cronyism when it comes to the Department of Energy. 80% of Department of Energy green loans are tied to President Obama’s most prolific donors including the now infamous Solyndra solar panel company and the Robert Kennedy Jr connected Brightsource which also deals in solar energy.

The tentacles of President’s green cronyism extend beyond the Department of Energy though. The Navy recently launched its largest biofuel test ship as part of an effort to reduce the Department of Defense’s dependence on fossil fuels (emphasis added):

The Navy is investing more than $500 million in the budding biofuel industry with the hope that it will be able to supply enough alternative fuel so the maritime branch can cut its dependence on fossil fuel by 50 percent over the next decade, said Cmdr. James Goudreau, director of the Navy Energy Coordination Office.

The biofuel that went into the destroyer was a 50-50 blend of petroleum and a hydro-processed algal oil produced by San Francisco-based Solazyme, which has been changing the genetic makeup of algae to construct a new generation of fuels.

The US Navy reports that this roughly half a billion dollar  investment is the “single largest purchase of biofuel in government history”:

Responding to that challenge, in August 2011, the Secretaries of Agriculture, Energy and Navy announced an intention to invest up to $510 million during the next three years in partnership with the private sector to produce advanced drop-in biofuel to power military and commercial transportation. While that investment awaits Congressional action, today’s announcement uses the existing authority – leveraging Defense Department procurement – to support this energy security goal.

[...]

“This historic contract is a major step forward for America’s energy security and the advanced biofuel industry in our country. Solazyme has delivered more than 360,000 liters of 100 percent algal derived renewable diesel to the U.S. Navy for their fuel certification program to date. The United States leads the world in advanced biofuel technology, and the Departments of Agriculture, Energy and the Navy have been instrumental in coming together to spur commercialization and grow our lead,” said Jonathan Wolfson, CEO, Solazyme. “We are honored to be working with the U.S. Navy and DLA-Energy in driving forward the Navy’s effort under Secretary Ray Mabus to source 50 percent of its energy from renewable sources by 2020. And we are proud to be teaming up with Dynamic Fuels on this contract.”

Solazyme is not just any biofuels company, and its continued partnership with the Navy is not without crony connections. Its strategic advisor is T.J. Glauthier, Obama donor and part of President Obama’s transition team, as Solazyme’s website states (emphasis added):

TJ Glauthier is an advisor and corporate board member in the energy and “clean tech” sector. He advises companies dealing with the complex competitive and regulatory challenges in the energy sector today. He also served on President Obama’s White House Transition Team, where he focused primarily on the energy portion of the economic stimulus bill.

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Billionaire George Soros gave advice and direction on how President Obama should allocate so-called “stimulus” money in a series of regular private meetings and consultations with White House senior advisers even as Soros was making investments in areas affected by the stimulus program.

It’s just one more revelation featured in the blockbuster new book that continues to rock Washington, Throw Them All Out, authored by Breitbart News editor Peter Schweizer.

Mr. Soros met with Mr. Obama’s top economist on February 25, 2009 and twice more with senior officials in the Old Executive Office Building on March 24^th and 25^th as the stimulus plan was being crafted.  Later, Mr. Soros also participated in discussions on financial reform.

Then, in the first quarter of 2009, Mr. Soros went on a stock buying spree in companies that ultimately benefited from the federal stimulus.

• Soros doubled his holdings in medical manufacturer Hologic, a company that benefited from stimulus spending on medical systems
• Soros tripled his holdings in fiber channel and software maker Emulus, a company that wound up scoring a large amount of federal funds going to infrastructure spending
• Soros bought 210,000 shares in Cisco Systems, which came up big in the stimulus lottery
• Soros also bought Extreme Networks, which, months later, said it was expanding broadband to rural America “as part of President Obama’s broadband strategy”
• Soros bought 1.5 million shares in American Electric Power, a company Mr. Obama gave $1 billion to in June 2009
• Soros bought shares in utility company Ameren, which bagged a $540 million Department of Energy loan
• Soros bought 250,000 shares of Public Service Enterprise Group, 500,000 shares of NRG Energy, and almost a million shares of Entergy—all companies that  came up winners in the Department of Energy taxpayer giveaway that produced the Solyndra debacle
• Soros bought into BioFuel Energy, a company that benefitted when the EPA announced a regulation on ethanol
• Soros bought Powerspan in April 2009.  Just weeks later, the clean-energy company landed $100 million from the Department of Energy
• In the second quarter of 2009, Soros bought education technology giant Blackboard, which became a big recipient of education stimulus money
• Soros also bought Burlington Northern Santa Fe and CSX, both beneficiaries of Mr. Obama’s plans for revitalizing the railroads
• Soros bought Cognizant Technology Solutions, which scored stimulus funds in education and health care technology
• Soros also bought 300,000 shares of Constellation Energy Group and 4.6 million shares of Covanta, both of which landed taxpayers’ money through the stimulus, the former of which bagged $200 million

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On the same day that the Supreme Court announced that it would take up the challenge to President Obama’s healthcare reform law, Kathleen Sebelius, secretary of the Department of Health and Human Services (DHHS) launched the Health Care Innovation Challenge, a competitive program that will award up to $1 billion in taxpayer-funded grants to applicants who will “implement the most compelling new ideas to deliver better health, improved care, and lower costs to people enrolled in Medicare, Medicaid and CHIP…” At a press conference, on Monday, Ms. Sebelius said, “Efforts like these to improve the health of communities and reduce cost while sparking the economy are a priority of the Obama administration.”

Using the Obama administration’s new theme of “We Can’t Wait,” a slogan which refers to Congress’ inability to obtain the votes to pass the president’s Jobs Act, the secretary said, “In recent weeks, Congress has failed to act on the full jobs agenda, so we will continue to do what we can.”

A new Rasmussen poll, however, indicates that most American voters oppose the Obamacare jobs plan, and believe the president should wait to enact the plan in order to reach an agreement with Congress. 63% of those polled said that the president should wait to work with Congress.

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Reuters recently offered an apologetic profile on Solyndra figurehead, RockPort Capital Managing Partner, and Solyndra Board Member David Prend.

The article, a fawning exhibition of non-investigative journalism, referred to Prend as the “Guru of Green.” Reuters neglected to question whether Prend’s close government connections had created conflicts of interest as he secured multi-million dollar government loans and grants for his investments.

Prend lobbied the Director of the White House Office of Energy and Climate Change Policy, Carol Browner, for Solyndra’s doomed $535 million DOE loan and presidential endorsement. Prend also visited the White House at least twice and discussed two companies with Browner while lobbying for Solyndra. (The White House refuses to release the second company’s name.)

Prend’s other investments suggest that he is benefiting from taxpayer support for far more than just two companies.

Prend is a board member for scandal-plagued concrete sealant manufacturer Hycrete. Around 2008, Hycrete received a $2 million Corps of Engineers earmark from Rep. Pete Visclosky (D-IN) shortly before company executives donated $20,000 to his campaign and the DCCC. In July 2009, former Hycrete CEO David Rosenberg was invited to a WH Summit on Energy Innovation and Jobs where Obama praised Hycrete as a job creation leader.

Prend was apparently involved in another RockPort Capital investment, Soliant Energy. Soliant went bankrupt even after receiving a $4 million DOE grant. Prend also apparently sits on the board of SustainX, which recently secured a $5.39 million DOE grant. (more…)

This one ought to make the “down staters” happy.

That’s right, everyone’s favorite “budget-friendly” pals, Mayor Rahm Emanuel and Governor Pat Quinn, have a “great deal” for you!  It’s a new $1 billion CTA Red Line renovation, and Chicago taxpayers only have to pick up 4% of the bill!!!

The rest of the state will kick in $646 million from a grant from the $31 billion Illinois Jobs Now program that Governor Quinn signed into law in 2009. In other words, all the increased taxes and fees “everyone” has been paying all across the land of Lincoln will now go towards more than 60% of the renovation costs for Chicago’s mass transit line.

According to Crain’s Chicago Business, the renovation will cover 11 stations and include new track and power systems. Sadly, $1 billion doesn’t go as far as it used to, and fairly large portions of the line’s most dilapidated sections will remain in their current dilapidated condition.

From Crain’s:

“Since I became governor, I have focused on creating  jobs and improving transportation service for our citizens. This major investment in the CTA’s Red Line does both,” Mr. Quinn said.

“These investments will make our city a more enticing place to live, to start a business, to raise a family,” Mr. Emanuel said. The city will provide $44 million for the project. The source was not immediately known.

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BG contributor Charlie Gasparino in The New York Post:

Jon Corzine appears to have committed more than a few sins in the runup to the demise of MF Global, including possibly using client money to pay for the risky trades that forced his brokerage firm into bankruptcy over the weekend. But possibly his biggest sin was his steadfast belief in the power of government.

The former New Jersey governor and Goldman Sachs chief executive went wrong by assuming that a government bailout would somehow turn his firm’s bet on some of the worst investments in the world — the sovereign debt of Italy and Spain — into gold. That absurd faith has doomed many chief executives — Dick Fuld of Lehman Bros. chief among them, just a little more than three years ago.

And, more than any of the other shenanigans that may have taken place during the ill-fated firm’s final hours, it’s what did in Corzine and MF Global.

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Last week in New York City, during my Intelligence Squared debate about stimulus, I pointed out that Germany is doing better than the United States and explained that they largely avoided any Bush/Obama Keynesian spending binges.

One of my opponents disagreed and asserted that I was wrong. Germany, this person argued, was dong better because it was more Keynesian thanks to “automatic stabilizers” that resulted in big spending increases.

This claim was made with such certainty that I wondered if I made a mistake.

Well, we were both right about Germany doing better. In the past few years, it has been enjoying yearly growth of about 3.5 percent while growth in the United States has remained below 3 percent.

But who was right about the key issue of whether Germany has been more Keynesian? At first, I was going to be lazy and not bother combing the data. But then I got motivated after reading an excellent post about Germany’s pro-growth reforms, written for National Review by Veronique de Rugy of the Mercatus Center.

So I looked up the data on annual government spending in the United States and Germany and discovered that I was right (gee, what a shock). As the chart shows (click to enlarge), the burden of government spending has increased faster in the United States. And that is true whether 2007 or 2008 is used as the base year.

To make sure the comparison was fair, I sliced the numbers every possible way. But the results were the same, regardless of whether state and local government spending was included, whether TARP spending was included, which base year was selected, or whether I used annual spending increases or multi-year spending increases.

In every single case, the burden of government spending grew faster in the United States from 2007 to 2011.

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I’ve criticized the Congressional Budget Office for generating biased and inaccurate numbers. These are the clowns, after all, who say deficit spending stimulates the economy in the short run but they also rely on a model which seemingly predicts 100 percent tax rates maximize growth in the long run.

About the only nice thing that can be said about this collection of bureaucrats is that they’re consistent, though I’m not sure being wrong all the time is something to brag about – especially when even cartoonists start to make fun of CBO’s flawed approach.

This is why I’ve argued it may be best to shut down CBO and also written that – at a minimum – sweeping reform of the Capitol Hill bureaucracy is a test of GOP seriousness.

I’m not alone in my disdain for CBO. In a column for The Hill, Veronique de Rugy of the Mercatus Center makes two excellent points about the Congressional Budget Office: 1) the general inability of economists to predict (we’d be rich if we knew how to do that) and 2) the use of inaccurate models.

The CBO’s consistently flawed scoring of the cost of bills is used by Congress to justify legislation that rarely performs as promised and drags down the economy. Whether it scores the recent healthcare bill or the cost of the Capitol Hill Visitor Center, an ambitious three-floor underground facility, the price for taxpayers always ends up larger than originally predicted. …Like many economists, its analysts suffer from a misplaced belief in their forecasting prowess. …CBO relies heavily on Keynesian economic models, like the ones it used during the stimulus debate. Forecasters at the agency predicted the stimulus package would create more than 3 million jobs. …But unemployment stubbornly remained around 10 percent. What was wrong with the CBO’s numbers? …the stimulus and the ACA should serve as yet more evidence that Congress should take budget scores and economic projections with a grain of salt. What looks good in the spirit world of the computer model may be very bad in the material realm of real life because people react to changes in policies in ways unaccounted for in these models.

Let’s now move from the general to the specific. Peter Suderman reports from Reason on new research suggesting that costs for just one provision of Obamacare may be far higher than predicted by the jokers at CBO.

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Unsurprisingly, one of the few interest groups advocating for the “American Jobs Act” is the American Federation of Teachers. Despite claims that “the money is not for us as teachers,” everyone knows that’s a farce. Nobody suggests teachers shouldn’t be paid, but they shouldn’t patronize taxpayers by suggesting that increased spending on government schools isn’t for the teachers.

The unions and Obama administration have been running the full-court press to gin up enough pressure on Congress to act on the bill. Despite the speeches, advertising campaigns and photo ops, they can’t even get enough Democrats in the Senate to kick it out of that chamber.

Joe Biden has been carrying the water for the administration. In a recent conference call with union leaders, he claimed students in a Baltimore school are “dodging falling ceiling tiles” during their school day.

More recently, AFT President Rhonda “Randi” Weingarten visited a Yonkers school and decried the conditions those students are in. A photo published by the union shows students sitting in a basement with paint peeling off the walls and a large air conditioning system looms directly over head.

“We can hear the rats when they run” through the ventilation system, the union quoted a student as saying.

Across the country, unionists infer that the money for public education has simply vanished. It’s absurd. The reality is America is continuing to spend more per student on education than at any other time in history. So where is it all going? Are the rats carrying bags of money away?

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From the Associated Press:

A federal investigation found that at least $7 million in federal stimulus money intended to provide jobs for unemployed Oregonians instead paid wages to 254 foreign workers.

The Oregonian reports the money went for forest cleanup jobs in central Oregon in 2009 when unemployment was over 11 percent.

Contractors told federal regulators they could not find enough local workers for the jobs and brought in foreign workers.

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From the Associated Press:

President Barack Obama and his allies in the Senate promise to press ahead with separate votes on pieces of his failed $447 billion jobs measure despite unanimous opposition from Republicans. But there also are signs of slippage among Democrats and evidence the strategy isn’t working with voters.

Future votes on individual pieces of the measure, however, aren’t likely to fare better than a pared-back jobs measure designed to boost hiring of teachers and first responders that Republicans and a handful of Democrats scuttled on Thursday.

Obama’s revised plan failed on a 50-50 test vote that fell well short of the 60 needed to break a filibuster. Three Democrats abandoned Obama on the vote and two more who voted with the president said they couldn’t support the underlying Obama plan unless it’s changed.

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From the Associated Press:

United against Barack Obama, Senate Republicans voted Tuesday night to kill the jobs package the president had spent weeks campaigning for across the country, a stinging loss at the hands of lawmakers opposed to stimulus-style spending and a tax increase on the very wealthy.

Forty-six Republicans joined with two Democrats to filibuster the $447 billion plan. Fifty Democrats had voted for it, but the vote was not final. The roll call was kept open to allow Sen. Jeanne Shaheen, D-N.H. to vote. The likely 51-48 eventual tally would be far short of the 60 votes needed to keep the bill alive in the 100-member Senate.

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