Tucked in the massive stimulus bill passed by the House Appropriation Committee is a $4.5 billion appropriation for the Army Corps of Engineers. While the vast majority of the appropriation is for the construction of new water resource projects and for the backlog of maintenance of existing water resource projects, there is also a $25 million appropriation for the Corps of Engineers regulatory program. The Corps regulatory program is the cadre of bureaucrats responsible for processing permits under Section 404 of the Clean Water Act – in other words wetlands permits.

Presumably, the Corps is justifying the increase in their regulatory budget by claiming a backlog in processing permits. But if Congress were serious about creating jobs, a more effective approach would be for Congress to force the Corps to follow their own permitting regulations. Corps regulations specify that a permit is supposed to be processed within 60 days of receiving a completed application. Forcing the Corps to actually process the permits in the required 60 days would be a far more effective approach than pouring more money down a regulatory rat hole.

Who would have imagined that the honorable Barney Frank, head of the House Financial Services Committee and chief culprit in the Fannie Mae/Freddie Mac disaster, would manipulate the bank bail-out for the benefit of his friends!?

Reports the Wall Street Journal:

Troubled OneUnited Bank in Boston didn’t look much like a candidate for aid from the Treasury Department’s bank bailout fund last fall.

The Treasury had said it would give money only to healthy banks, to jump-start lending. But OneUnited had seen most of its capital evaporate. Moreover, it was under attack from its regulators for allegations of poor lending practices and executive-pay abuses, including owning a Porsche for its executives’ use.

Nonetheless, in December OneUnited got a $12 million injection from the Treasury’s Troubled Asset Relief Program, or TARP. One apparent factor: the intercession of Rep. Barney Frank, the powerful head of the House Financial Services Committee.

Mr. Frank, by his own account, wrote into the TARP bill a provision specifically aimed at helping this particular home-state bank. And later, he acknowledges, he spoke to regulators urging that OneUnited be considered for a cash injection.

I am truly shocked, shocked to find politics going on on Capitol Hill!

According to the Congressional Budget Office, “Bailout to Nowhere” money for the proposed new infrastructure stimulus won’t be spent within the next two years–far too late to do anything about an ailing economy (granting for the moment that such spending is stimulative rather than destructive, which it isn’t). According to the Washington Post:

Less than half the money dedicated to highways, school construction and other infrastructure projects in a massive economic stimulus package unveiled by House Democrats is likely to be spent within the next two years, according to congressional budget analysts, meaning most of the spending would come too late to lift the nation out of recession.

A report by the Congressional Budget Office found that only about $136 billion of the $355 billion that House leaders want to allocate to infrastructure and other so-called discretionary programs would be spent by Oct. 1, 2010. The rest would come in future years, long after the CBO and other economists predict the recession will have ended.

We’ve called for numerous options to grow infrastructure. Erecting new power-line capacity, broadband options, toll-roads and other infrastructure is best accomplished through relaxation of general regulatory barriers, and concerted removal of the artificial walls between the great infrastructure industries (water, power, telecom, sewer, rail, electricity, etc) so that the private sector can carry out the projects rather than the goverment complex of consultants, contractors and politicians.

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.

Not all stimulus programs are created equal. If the goal of the latest economic bailout package that Congress is considering is as President Elect Obama has declared, job creation, there is a significant disparity between many of the programs.  While only 39 of the variously appropriated federal programs even attempt to quantify the number of jobs that they would create, there is a huge disparity in how effective various programs are at job creation – ranging from $1,000,000 per job created down to $16,000 per job created.

For a bill that is designed to stimulate job creation, it is disgraceful that Congress would appropriate any money for programs where the agency has not even attempted to estimated the number of jobs that the appropriation would generate. For the few programs that have estimated the number of jobs created there are obviously some that are economically more efficient than others. And Congress should certainly direct resources to those programs that would maximize the job benefit for the buck. At a minimum, Congress should focus on those programs that are more rather than less efficient. If a program cannot even estimate the number of jobs that if would create, that program certainly doesn’t qualify for emergency economic recovery legislation. Congress should insist on knowing how many jobs a program is estimated to generate before appropriating huge sums of American taxpayer dollars.

Here is a list of programs from the stimulus bill and  the estimated cost per job.

Before President Barack Obama gave his inaugural address, it had been reported that he was heavily studying John F. Kennedy’s speech at the inauguration in 1961. And no doubt Obama’s “call to service” will be compared to Kennedy’s inaugural that contained the famous lines: “Ask not what your country can do for you. Ask what you can do for your country.”

On the good side, Obama did hail “doers” and “risk takers” in his speech and talked about how they have improved our way of life. That’s important, given the bipartisan urge to stamp out all risk-taking in the wake of the financial crisis. Perhaps that’s a good sign that will Obama will look at the ability to take risks as an important consideration in policy matters.

Unfortunately, though, Obama mainly talked about individuals as a means to achieving collective goals. Left out were individual American dreams of building a business or a better life — which is what fights against state tyranny from the British stamp tax to Jim Crow laws have really been about.

So the best rebuttal to this aspect of Obama’s inaugural is actually the late great economist Milton Friedman’s rebuttal to Kennedy’s “ask not.” It came from the introduction of Friedman’s seminal book Capitalism and Freedom, published in 1962, one year after Kennedy’s inauguration. In this passage, Friedman rips the concept of “national purpose” that permeated the inaugural addresses of both Kennedy and Obama:

In a much quoted passage in his inaugural address, President Kennedy said, “Ask not what your country can do for you - ask what you can do for your country.” Neither half of the statement expresses a relation between the citizen and his government that is worthy of the ideals of free men in a free society. The paternalistic “what your country can do for you” implies that government is the patron, the citizen the ward, a view that is at odds with the free man’s belief in his own responsibility for his own destiny. The organismic, “what you can do for your ‘country” implies the government is the master or the deity, the citizen, the servant or the votary.

The free man will ask neither what his country can do for him nor what he can do for his country. He will ask rather “What can I and my compatriots do through government” to help us discharge our individual responsibilities, to achieve our several goals and purposes, and above all, to protect our freedom?

To the free man, the country is the collection of individuals who compose it, not something over and above them. He is proud of a common heritage and loyal to common traditions. But he regards government as a means, an instrumentality, neither a grantor of favors and gifts, nor a master or god to be blindly worshipped and served. He recognizes no national goal except as it is the consensus of the goals that the citizens severally serve. He recognizes no national purpose except as it is the consensus of the purposes for which the citizens severally strive.

So this inauguration, when we celebrate another peaceful transfer of power and congratulate President Obama for his impressive journey to the White House, lovers of liberty should ask what can we do to protect our freedom and lift goverment barriers to achieving our several individual purposes.

Over in the UK, their own financial mess is reaching genuine crisis levels. With a trillion dollar national debt, a currency crisis and their own bank bailout (the model Paulson followed) having conclusively failed, Britain is on the edge of bankruptcy:

The country stands on the precipice. We are at risk of utter humiliation, of London becoming a Reykjavik on Thames and Britain going under. Thanks to the arrogance, hubristic strutting and serial incompetence of the Government and a group of bankers, the possibility of national bankruptcy is not unrealistic.

The political impact will be seismic; anger will rage. The haunted looks on the faces of those in supporting roles, such as the Chancellor, suggest they have worked out that a tragedy is unfolding here. Gordon Brown is engaged no longer in a standard battle for re-election; instead he is fighting to avoid going down in history disgraced completely.

The tastefully-named Iain Martin is obviously angry, but he has every right to be. Gordon Brown encouraged Britain to gamble much more of its national income on his watch than America did, all the time proclaiming he had put an end to “boom and bust.” Brown’s bust is now so large it wouldn’t look out of place in a Russ Meyer movie.

That is why Brown and his cronies will be watching today’s inauguration with an audacious hope in their hearts:

In this gloom, the Prime Minister has but one slender hope: that somehow, by force of personality, the new President Obama engineers a rapid American recovery restoring global confidence, energising the markets and making us all forget this bad dream.

If this is the case, it is plain that officials of Her Majesty’s Treasury have not read the So-Called Stimulus Bill.

UPDATE: More on Britain’s plight from the excellent Andrew Lilico.

How much will President Obama’s plans for economic stimulus and other federal spending cost the American taxpayers? We do the math.

Our friends at the Ayn Rand Center for Individual Rights are hosting what promises to be a fascinating public lecture on the state of the U.S. economy and what it means for the future of capitalism. Former CEO and current Board Chairman of BB&T bank, John Allison, will explain the interventionist government policies that brought us where we are today and their anti-capitalist underpinnings.

Location and Details:

The Financial Crisis: Causes and Possible Cures
Thursday, January 29, 2009

National Building Museum—Great Hall
401 F Street NW
Washington, DC 20001
Red Line Metro, Judiciary Square

Doors open: 6 PM
Lecture and Q & A: 6:30 PM

This event is FREE and open to the public.

Scrolling through the $825 billion dollar monstrosity, my first question is–how many unemployed construction workers do they think there are? Don’t they realize that they will be competing with the private sector beyond those currently unemployed?

We signed our name to a blank check. (CEI opposed it.) Now they want us to sign again and again—bailout, stimulus, whatever they’re calling it today.  But as Martin Hutchinson said, “Stimulus plans also raise the chance of a Great Depression because of the deficits they cause.”

The Wall Street Journal reported today that Americans are in favor of Obama’s stimulus with 89% in favor of deficit spending to create more renewable energy and energy efficiency.

Here’s some hard questions that should be asked about those “green” projects, though:

1. How long will it take the projects to break ground?

2. How many permanent jobs will be created and at what cost?

3. Of those permanent jobs, are they sustainable without government subsidies? EIA has reported that solar energy is subsidized to the tune of $24.34 per megawatt hour, wind $23.37 and “clean coal” $29.81. By contrast, normal coal receives 44 cents, natural gas a mere quarter, hydroelectric about 67 cents and nuclear power $1.59.

4. What is the current unemployment rate of the industry to be “stimulated?”

5. You won’t catch me signing up to build a wind turbine or highway, so who will you be employing?

6. Is that national electrical grid going to bring inexpensive coal-fired power to needed US industries? E and E reports that Frederick Butler, president of the National Association of Regulatory Utility Commissioners, acknowledged that “strategically sited” transmission lines could bypass power plants in coal states, while running through countryside laced with wind farms to promote clean energy.

Finally, as environmental economist John Whitehead cautioned yesterday in Salon:

“The Wall Street Journal’s economic forecast survey concludes that a big fiscal stimulus will lead to positive economic growth by the third quarter of 2009. But without the fiscal stimulus positive economic growth will be restored by the beginning of 2010. Speeding up the recovery is important in the short run, but there are also long-run risks associated with excessive government spending. At some large debt to gross domestic product ratio, lenders may no longer buy our government bonds and interest rates could spike.”