Whenever I want to get the straight stuff on a political controversy, I ask a small business person.
They'll be straight with you. They stay in business being straight with customers, unlike bigger businesses that have tens of thousands of customers and can afford to lose a few along the way when being straight is sometimes optional to save face or whatever.
So, I found it quite refreshing that a small business person would say the Obama stimulus plan is working.
A Free Press story on Nov. 28 carried a story about the energy tax credit.
Here's what Dale Brenke of Schmidt Siding and Windows in Mankato had to say about the Stimulus
“ There’s a lot of political controversy about the federal stimulus program that is providing this tax credit,” Brenke says, “ but it has saved thousands of jobs in this sector in Minnesota.”
Two years ago, eight Schmidt Siding and Windows employees were laid off during slow times for specialized remodelers, Brenke says. But since the tax credit program, all those employees have been recalled.
“ We’re just one business,” Brenke says. He cites lumberyards in the area, plus other contractors and remodelers in town. The number of jobs saved or added just keeps growing, he says.
In addition, the companies in Minnesota that make windows and doors are also feeling a huge boost because of the federal energy efficiency tax credit program, part of the American Recovery and Reinvestment Act better known as the Stimulus Act. Among those companies is Lindsay Window in North Mankato, Brenke says.
“ This act has helped a whole host of energy efficiency businesses in Mankato, and across the state,” he says
Thank you Dale!
I'll write this story as many times as Foxnews says the stimulus didn't do anything.
Now some will argue that the stimulus didn't "create" any jobs. But the Obama administration has consistently used the terms "saved" or "created" so even in the above case, if it didn't create any jobs for Schmidt, it indeed did save jobs.
Eight people who didn't have jobs, got them back. I'm guessing they don't care if you describe them as "created" or "saved."
The bottom line: they were earning money again, off unemployment and boosting the economy.
The stimulus worked.
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ReplyDelete"Marvin Windows cancels profit sharing for it's plant employees for the first time in years. Anderson windows makes it's fourth set of layoffs in 2 years."
I'm glad that one small, local business is benefiting from the "Energy Tax Credit Program", but whenever government tries to artificially engineer the economy it, more often, helps a select few while hurting many others while compromising the long-term recovery of free markets. Just like 'cash for clunkers' these industries will jolt back to reality when the 'free money' stops coming. One can argue that the stimulus worked, sure. But for who and at what cost? The answers are an increasing government bureaucracy and a shrinking private sector.
Between December 2008 and December 2009, the federal government added nearly 100,000 new positions while last year, 1.3 million federal employees received bonuses totaling $408 million, up $80 million over 2008. Now there are 7.9 million fewer working Americans today than there were in December 2007.(Wash. Examiner 7/10)
As long as the private sector, and newspapers, are cutting jobs, freezing pay, and mandating payless furloughs a strong argument can be made that the Stimulus didn't produce real, long-term solutions.
Christopher G. Kind
Mankato, MN
Is this a joke? So, we take a nahdful of small business in Southern Minnesota that have customers taking advantage of a tax credit which in turn boosts prospects for these small businesses and - poof - the economy stands firm and upright. To use an old Minnesota phrase - what a crock.
ReplyDeleteFor every stimululative positive, you can cite an avalanche of circumstances where there is a stimuluative negative. Take for instance the old 169 bridge over the MInnesota River in Shakopee. When the new crossing was built 15 years ago, the old bridge was converted to a walking bridge. The only thing a person can access by walking across this bridge is the archery range on the other side of the river. So, we are spending hundreds of thousands in 'stimulus funds' to repair this walking bridge. Or how about the walking bridge built in the Louisville swamp between Jordan and Shakopee? $250,000 in stimulus funds to build a walking bridge in one of the most remote areas of Minnesota. Or - this one is my favorite - the $400,000 for a project at Buffalo University in New York for a study called 'Malt Liquor and Marijuana: Factors in their Concurrent Versus Separate Use'. This is no joke - the reference number is 1R01AA01658001A in the ARRA website. So, what were the conclusions of this groundbreaking study that paid participants to drink beer (which no doubt recycles that money in to the ecomony - imagine the 'saved' or 'created' jobs!!!)? The study concluded that those who drink malt liquor beer AND smoke dope get higher than those people who just drink malt liquor. It is no surprise that when the President was in Buffalo early this year, he cited other stimulus grants...
Editor Spear, for you to conclude that the stimulus worked based on such a small and narrow slice of economy is completely disingenous. Sure, the stimulus may have worked in certain and rare circumstances, but the amount of money that was wasted on walking bridges and ridiculuous university studies and other government sponsored work. What happened to tha auto companies after Cash For Clunkers ended? What happened to home sales after the home purchase tax credit expired? As for the energy tax credit, this also shows part of the problem with the Obama Administration. They are trying to incent people through tax credits. Take for instance the small business tax credit rolled out last year as part of Obama's Job Summit (where he told us he was focused like a laser on creating new jobs). Would a small business hire someone for $40K including benefits, just to get a one-time $2K tax credit? Of course not, especially if no new business was forthcoming to justify the hire because the small business is still out $38K without the materializtion of $38K worth of new business.
THis is the essence of Obamanomics - to borrow money and dole out to favored constituencies and use the tax code to transfer wealth and incent certain behaviors the government wants. The stimulus did not work. Just as Clinton's stimulus did not work and just like GWB's THREE stimulus packages did not work. You cannot replace private economy expenditures with government pump-priming no matter how many times Paul Krugman says it works. Government stimulus never leads to long term economic growth because the fallacy of Keynesianism is that it never tells you that when you prime demand on one hand with government incentives and spending you reduce demand on the other because the money has to come from somewhere. The stimulus has been an absolute immutable failure.
Patrick - The Free Press could use a 'reporter' who 'reports' more than they advocate. A hammer weighted with hard facts bangs many more nails in the coffin of truth. Nice!
ReplyDeletePatrick. Try to keep your comments shorter as it will be easier for readers. If you have several topics, do separate posts.
ReplyDeleteA point of clarity perhaps on my post. I'm not intending to say the stimulus worked in a sense that everything is right with the economy or economic policy for that matter.
Just pointing out that in some cases -- the one I mention -- the stimulus did work.
Just trying to refute a little bit the notion some people may have that the stimulus did ABSOLUTELY NOTHING.
Funding a bridge that's not needed isn't really a argument for whether putting money into consumers hands works or not, but one about how people choose to spend government money.
I don't disagree that the stimulus worked in certain areas. There are going to be rays of hope in every government expenditure especially $862 billion worth of spending. The problem is that private citizens invest for an economic return, but government invests for a political return which is to say government will direct money that aids in the re-election of the politicians who hold stimulus purse string.
ReplyDeleteTo that end, you make my point in your last point about 'putting money in to consumers hands'. You can't put money in consumers hands without taking that money from other consumers hands. Government stimulus is the ultimate in the zero-sum game which will never lead to sustained economic growth.