Barack Obama claims his plan “will likely save or create three to four million jobs.” The House gave us a glimpse of what we’re in for last week with an $825 billion bill – page 3 of the bill states a goal “of using at least 50 percent of the funds for activities that can be intiated not later than 120 days after of the enactment of this Act “. This at least implies a desire to spend all of the money is one year – although the bill does allow for the spending of some of the monies into the later part of 2010.
If the number balloons to $1 trillion (not that unlikely as even the House’s top appropriator, David Obey (D-WI) feared that $825 billion was too low) then that’s a cost of $250,000 to $333,333 per job. The overall expenditure number doens’t include the $350 billion of TARP monies either, pushing the cost per job even higher.
At the end of the third quarter, US Gdp was $14.4 trillion and the number of people employed was 145 million – about $100,000 per job.
Other interesting comparisons: The Australian GDP is about $775 billion and supports 10.7 million jobs. The Canadian GDP is $1.2 trillion and supports a workforce of 17 million jobs. That about $72,000 per job in Australia and $70,000 in Canada. GDP per capita in both countries is much lower than that of the United States, which mostly accounts for the lower GDP per job ratio, but still should cause some pause.
For a more detailed breakdown refer to a post by my colleauge Jonathan Tollman.
Thee Federal Reserve lowered its key rate to 1%. Convinced that inflation is no-longer a problem, the Fed believes this is the time to help stave off a recession. This policy didn’t work well when Greenspan tried in 2001 – it helped the jump in oil price and drove the dollar to fall against other currencies – oh and it made lending for home super cheap.
Combined with aggressive lending from the Federal Reserve, a Fannie and Freddie newly reflushed with cash to buy up mortgage backed security , and the federal government going on a mortgage buying spree…
Does this sound like 2002-2006 all over again, just a bit bigger? Are our policymakers really this dense….this is truly criminal.
Chevron has plastered ads throughout the Washington, DC transit system that have slogans such as “I will unplug things more” or “I will use less energy” or “I will take my golf clubs out of the trunk” or “I will at last consider a hybrid.”
I have never seen a company basically say “please, don’t buy or use our product. Really, don’t.” Could anyone imagine Apple with an ad campaign that says “I will listen to less music”? Or GM or Toyota putting an ad out saying “I will drive less”?
I have no idea what Chevron hopes to accomplish with its campaign. Maybe its just misguided, maybe they think that it will lead to Chevron being perceived more positively. My guess is that the general populace won’t think any better of oil companies until gas prices fall and stay in the mid-$2 range. I’m not suggesting any sort of conspiracy for high gas prices, but consumers weren’t happy about $4 gas. Environmental groups will never see energy companies in a positive light until we can run the whole electric grid off one hamster running in a wheel. That’d probably be considered animal cruelty, so substitute free-marketer for hamster.
Maybe I should short some Chevron stock, just in case that its ad campaign is just a little too successful.
Thanks to Declan McCullagh for his article that highlights the non-financial portions of the bailout.
Particularly useful is his chart (with information from Reuters) that shows that all the various bailouts of this year will cost $1.8 trillion.
Here are some useful comparisons: the GDP of the UK is $2.1 trillion.
The GDP of Australia is $646 billion.
I wonder if it makes more sense to rent Australia for a couple of years?
The New York Times reports that California’s Governor just signed a state-wide transfats ban into law. This makes perfect sense. California is facing its usual annual budget axe grind and a $16 billion budget deficit.
This just ends out being another regulation that hampers economic activity in my home state. So first the state government bans economic activity that would help the tax base (although a smaller California government is ideal) and because navigating the California regulatory structure is insane, it makes it more difficult to operate a business in California and thus more people want to leave the state. It’s possible that California might not add any electoral votes during the next re-apportionment (although it seems likely to add one seat). That would be the first time since California joined the Union in 1850 that it wouldn’t pick up any electoral seats in a reapportionment.
To add to Alex Harris’ posting on ISP’s standing up for themselves….
Maybe the ISPs ought to use a pocketbook issue regarding net neutrality. Perhaps Comcast (or the next ISP to get hit with this) should respond to the FCC inquiry with something like:
“Yes, we managed P2P traffic, which is used mostly to deliver pirated porn, music and videos, and we stress the porn, to make sure our users could check e-mail, do financial transactions and make necessary purchases. If you’d prefer porn to block necessary traffic, then fine, we can do that. But we figured your finances were more important. Sorry.”
Just my $.02.
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