Here is an interesting article in The New York Times with some statistics showing manufacturing is leading the recovery. Seems to be the same with recently announced unemployment numbers declining. Its analysis is that neither side of the political spectrum in the US is happy. The Democrats still want to pass more stimulation and the Republicans don’t want to give Obama credit. That’s probably too simplistic (since a Republican senator is holding out right now trying to get more Federal money into his state–getting a slice of the Federal pie knows no political boundaries), but contains much truth. Anyway, here’s a rare shout out to manufacturing.
Manufacturing leading recovery
by Gary Mintchell | Feb 6, 2010 | Operations Management | 7 comments
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That’s because most of the "stimulus" money still hasn’t been spent yet and the money that has been spent isn’t going to things that create jobs like manufacturing. I spent two hours scouring Recovery.gov for money that went to NH. In one of the more flagrant examples, $2.5M went to the NH DOT. So far, $850k had been spent and they had reportedly created 1.5 jobs.
I read through hundreds of these projects, studying the projects and making careful note of the company who had won the contract and something because absolutely crystal clear. Here’s the thing about the government handing out money – it’s hard to get and it goes to the organizations that are already GOOD at applying for and taking government money. As such, it’s an illusion (at best) to think that this stimulus money will stimulate new business. It goes to the same cronies and the same companies already making money from the government. The difference is that they can get more money for doing largely the same thing. Furthermore, much more than half of the stimulus money went to government and academia. If you argue that this has a "trickle down" effect that will result in businesses hiring new employees, then you might as well just support tax cuts and remove the pimp from the equation.
My conclusion from an admittedly casual review of stimulus spending is that having the government hand out lollipops to their friends is about the least efficient means of economic stimulation you can think of. However, it does exceptionally well at growing the influence of government.
Nice analysis. I’m not a knee-jerk Republican on these matters and I’m a bit of a Keynesian believing that government can exert some influence over the economy, but I also studied "public administration" as part of my graduate school experience. I don’t believe bureaucracy (public or private) ever did a lot of good.
If you read the Federalist Papers, you can see that the Founding Fathers foresaw Congress becoming a body swayed by special interests. Couple that with the basic premise of politics — I use my position to further the interests of my friends — then you see what a mess Congress is. It’s all about how much money do I get for my friends.
I wish the "Tea Party" people and others who decry "too much taxes" would talk specifically about what spending they’d cut–beginning with what they’d give up. Everyone thinks that spending can be cut out of someone else’s benefit. How about they say, "I give up my social security and medicare" or "I give up police and fire protection" or something. Oh well, that’s politics. That’s why I study automation, leadership and theology–no more politics.
Exactly, Gary – that’s the danger of growing government. Once you establish spending baselines it’s horribly difficult to cut that spending. When somebody proposes a cut to a school budget, as an example, who suffers first? They cut sports, music, textbooks, etc… All stuff that affects the kids. It’s not the bureaucrat making $250k a year who’s in charge of making sure that the budget never gets cut, because that person is contacting all the local news reporters who write sad (and true) stories about how the kids will suffer from the budget cuts. Voters get enraged, overrides get passed, more bureaucrats get hired, and the cycle repeats.
To me, all you need to know about politics and voters is that poll after poll shows that at least 80% of voters think generic incumbents should be voted out of office, but then there is an 80% reelection rate among incumbents. It’s always the other guy that’s the problem.
Well said. I spent 8 years on the local school board. I started in a bad situation where administrators, especially in the central office, were arrogant, unresponsive and thought that the school board worked for them. We had "team 20" — the number of administrators in this small city school district. When I left (not just me, but 3 other business people), we had 16 administrators and a well-run district. I had not been off the board for a term when they were back up to 20 and I think more.
I’m told that one problem in local politics is that business people who know how to run things just don’t get involved in local offices any more.
Then the problem with Congress (and state legislatures) is districting. I live in the 4th Congressional District of Ohio. In my entire life, the representative has always been a Republican. One was very good–and instrumental in the passage of the 1964 Civil Rights Act. One was Mike Oxley–need I say more? Now we have a guy who is an intellectual light-weight but says the right things. He’s young and could possibly serve for 25 more years.
All elections are between 2 (or sometimes 3) people. You can read anything you want into the election (say like in Massachusetts), but it always comes down to the 2 running. If you don’t think you have a chance because of party affiliation in your district, then only idealists or masochists will run.
So when do you announce the formation of your exploratory committee?
You’re missing the whole point is that most governments aren’t interested in being better and more efficient. To most politicians, the solution is always more money. But throwing more money at a problem can just make everything worse. Also, there may be some differences between Ohio and CA; it’s obvious in California that the state government is out of control.
Here are a couple links on places that do it differently:
How many state schools and hospitals show the same interest in improving?
Finally, I wish you would add a "most recent comments" widget — I find them quite handy.
Oh, governments are not efficient, and I’d argue that overall we don’t want an efficient government. Evolving Excellence is a good source of information.
You can subscribe to comments. I’ll see about a recent comments widget when I get home.