American Subsidy Madness, Ctd. (UPDATED)

A couple weeks ago, I lamented the hundred billion dollars in annual business subsidies that the US government doles out every year.  Today from Cato's Thomas Firey comes another eye-opening - and sigh-worthy - stat about the United States' addiction to spending: the 2.4 trillion - with a "T" - dollars in borrowed money that the US government has spent on "stimulus" measures since 2008:

[The Stimulus] was just one of several fiscal stimulus bills that Washington adopted, beginning with the February 2008 Economic Stimulus Act and continuing through to early this year. Some of those bills were explicit stimulus measures; others were ostensibly intended to address other policy goals, but were engineered to provide fiscal stimulus by borrowing and spending money now, and then using future government revenues to pay off that borrowing (perhaps when God grants St. Augustine chastity and continence)...

#	Name	Stimulus (Billions)	Became Law	Public Law	Note
1.0	Economic Stimulus Act of 2008	$167	2/13/2008	110-185	A ”timely, targeted, and temporary fiscal stimulus.”
1.0.1	Unemployment Compensation Extension Act of 2008	$5.7	11/21/2008	110-449	Extends unemployment insurance, using borrowed funds so as to provide stimulus.
2.0	American Recovery and Reinvestment Act of 2009	$819	2/17/2009	111-16	This package of public works projects, tax breaks, unemployment insurance extension, and other spending would keep unemployment below 8%.
2.0.1	Cash for Clunkers Extension	$2	8/7/2009	111-47	Continues the subsidy for new car purchases that was first enacted as part of ARRA.
2.1	Worker, Homeownership and Business Assistance Act of 2009	$44.7	11/6/2009	111-92	Extends and expands the homebuyer tax credit program.
2.2	Temporary Extension Act of 2010	$8.1	3/2/2010	111-144	Extends unemployment insurance, using borrowed funds so as to provide stimulus.
2.3	Hiring Incentives to Restore Employment Act	$17.6	3/18/2010	111-147	AKA the “Jobs for Main Street Act,” this “jobs bill” would ”spur job growth and strengthen the private sector.”
2.4	Continuing Extension Act of 2010	$18.1	4/15/2010	111-157	Extends unemployment insurance, using borrowed funds so as to provide stimulus.
2.5	Homebuyer Assistance and Improvement Act of 2010	$145	7/2/2010	111-198	Extends the deadline for submitting paperwork for homebuyer credit.
2.6	Unemployment Compensation Extension Act of 2010	$33.9	7/22/2010	111-205	Extends unemployment insurance, using borrowed funds so as to provide stimulus.
2.6.1	United States Manufacturing Enhancement Act of 2010	$3	8/11/2010	111-227	Reduces or suspends various import duties.
2.7	Small Business Jobs Act of 2010	$85.4	9/27/2010	111-240	Expands SBA loan programs and provides other small business assistance.
3.0	Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010	$916.8	12/17/2010	111-312	A package of tax breaks, including a cut in the Social Security payroll tax, an extension of the Bush income tax rates, and an extension of unemployment insurance.
3.1	Temporary Payroll Tax Cut Continuation Act of 2011	N/A	12/23/2011	112-78	Extends the Social Security payroll tax cut, extends unemployment insurance, and other provisions.
4.0	Middle Class Tax Relief and Job Creation Act of 2012	$167.6	2/22/2012	112-96	Extends the Social Security payroll tax cut, among other provisions.
SUM:		$2,433.9

That is a truly breathtaking figure - even for someone like me who tracks this stuff pretty closely and has thus become pretty numb to crazy US budget figures.  And this, of course, is on top of the myriad "regular" subsidies (e.g., the billions of taxpayer dollars spent yearly on federal government support for agriculture) that are part of the annual US budget.  It all leaves me with one simple question:

When exactly is this government "stimulation" supposed to pay off?

UPDATE: And just so we're totally clear here, Cato's Tad DeHaven helpfully reminds us today that America's subsidy addiction is a bipartisan affliction:

Last week, the House Energy and Commerce Committee passed the “No More Solyndras Act.” As Taxpayers for Common Sense notes, however, the bill should probably be called the “More Solyndras Act” because it would still allow the Department of Energy to approve loan guarantee applications that were submitted by Dec. 31, 2011....

Sensing an opportunity to embarrass Republicans, Rep. Ed Markey (D-MA) offered an amendment that would have completely ended the Title 17 loan guarantee program. Most of the committee’s Republicans promptly embarrassed themselves by joining all Democrats in voting down the amendment 3-39. Republicans Mike Pompeo (Kansas), Michael Burgess (Texas), and Steve Scalise (Louisiana) were the only members to vote to abolish the program.

This isn’t the first time that Republicans have joined Democrats to save the program. Back in June, an amendment that would have shut down the Title 17 loan guarantee program failed 136-282 with 127 Republicans joining 155 Democrats to defeat it. Only 54 percent of freshmen Republicans from the so-called “Tea Party Class” supported the amendment.

Sigh.

President Obama's (and Others') Clueless Love of Chinese Infrastructure Spending

Over the last few weeks, President Obama has traveled the country campaigning on the taxpayers' dime trying to sell parts of his Big Jobs Plan.  In order to sell a chunk of that plan - a massive new government spending spree on domestic infrastructure - Obama last week repeatedly cited China's infrastructure spending as the prime example of how the United States is desperately falling behind and needs to catch up:

Congress is expected to vote this week on a part of the jobs bill that would fund $50 billion for roads and bridges and $10 billion for other infrastructure projects. Obama said these projects would ease the unemployment rate, which was 9.1 percent in September, and rebuild America’s decaying infrastructure.  

“It makes absolutely no sense when there’s so much work to be done" and more than a million construction workers unemployed, Obama said, standing in front of the Francis Scott Key Bridge, which has been declared structurally deficient...  

Obama said Americans are paying nearly $130 billion a year to use bridges and roads that are out of date and unequipped to serve today’s society. He said the U.S. could be paying workers to rebuild these roads and compete with other countries transportation systems.  

Europe invests twice as much of its overall economy as the U.S. does on transportation infrastructure, Obama said, while China invests four times as much. “How do we sit back and watch China and Europe build the best bridges and high-speed railroads and gleaming new airports, and we’re doing nothing?” Obama asked.

Envy over Chinese infrastructure spending certainly isn't isolated to President Obama, or even Democrats.  Indeed, China's huge infrastructure expenditures are routinely cited by sinophobes of both parties as a clear indicator that the Chinese are eating our economic lunch these days.  For example, here's noted JapanChina-obsessive Clyde Prestowitz lamenting the disparity between the US and Chinese infrastructure budgets in his attempt to convince the American people that the US government should create an "Infrastructure Bank":

Just to maintain the current [US] transit and highway systems will take about $100 billion above current annual revenues for the next 25 years. To improve the system would take $150 billion annually. China, with an economy less than one-third the size of the U.S. economy, is spending about $1 trillion on upgrading its infrastructure. The total U.S. bill for a modern infrastructure would probably be on the order of $5 trillion to $10 trillion over the next quarter-century. That's a lot of money, and it's unlikely to come from either increased taxes or reduced government expenditures. It could, however, come from an Infrastructure Bank that could use an initial government-funded capitalization to leverage private capital on a project-by-project basis.

But don't hold your breath on this. It's not going to happen because of the policy issue.

Leaving aside for a moment the fact that the supposedly horrible state of the United States infrastructure is a highly questionable assumption, let's focus instead on the notion that China's massive infrastructure spending is something the United States should emulate.  Yes, sure, they're spending a lot of money on roads and bridges and rail lines, but beyond the sheer dollar-value, are these projects worth the money and, more importantly for our current purposes, worthy of US praise and imitation?

Well, if a high-level member of China's own planning commission is to believed, the clear answer to those questions is "no."  In a recent, eye-opening interview with Caixin, Chinese Academy of Sciences (CAS) academic and National Planning Expert Committee member Lu Dadao thoroughly explained that China's infrastructure system is rife with problems and in desperate need of reform. The entire interview is worth reading, but here are some of the highlights:

Caixin: What's the status of China's transportation construction initiative?

Lu: It's mainly about excessively big, redundant construction and unfair competition, as well as a lack of coordination between different modes of transport. First, look at expressway construction. In 2008, the nationwide total mileage plan was adjusted up to 100,000 kilometers. That year alone we built 6,433 kilometers and invested a total 600 billion yuan. Nationwide expressway mileage is expected to grow to a staggering 180,000 kilometers, if we add provincial and national building plans.

Personal vehicle traffic levels are too low on some expressways built over the past five years. Considerable stretches of expressways completed in central and western regions are usually empty, simply basking in the sun. Thus, expressway construction has suffered from excessive expansion. It's gotten out of control. Second, over-expansion for coastal port development planning and construction has clearly led to excessive competition between ports. China's port throughput capacity reached 4 billion tons in 2008, yet coastal communities continue to compete in the race to build large-scale berth and shipping container ports. Every port authority makes lofty claims about becoming a coastal or international hub for commercial shipping.

Additionally, many regional airports are being built blindly, with huge investments but no feasibility studies. This has led to major losses. In 2008, national subsidies to small- and medium-sized airports reached 9.3 billion yuan. But by 2020, we'll have added another 100 or so airports, mainly regional airports. Every year recently, construction has begun on about 20 regional airports, and more are waiting to be approved.

Moreover, there's been a surging wave of railway construction projects, including intercity rail linking big cities, suburbs and small cities in some provinces, regions and municipalities. Our research group found there will not be enough traffic to support the big, city-centered railway transportation systems after they are completed....

Currently, China's expressway network accounts for 1.62 percent of total road network mileage, which is higher than in either Europe or America. In eastern regions, the expressway ratio is as high as 2.4 percent, and in the west it has reached 1.16 percent. This sort of road network clearly reflects one fact: Expressways, which play a backbone transportation role, are mismatched against other kinds of roads. The total expressway length is too great. A reasonable expressway mileage ratio is around 1.2 percent.

Caixin: Why has China's transportation construction program been excessive?

Lu: The main cause is a lack of consideration for China's national conditions, its stage of socio-economic development, and development trends. More than 30 years of high-speed economic development have caused China's GDP, population and urban population to expand rapidly. But China's per capita GDP is still quite low, and we can't use European or American per capita indicators such as transportation capacity or road length as a basis for the scale and rate of our development.

Caixin: Profit-driven but unrealistic "leapfrog" development has been widely mentioned in official documents. Are the pursuit of GDP growth and performance stars for government officials driving the transportation campaign?

Lu: Of course. Some local leaders think a big highway investment will play a large role in boosting the local economy. The search for profit and returns on short-term investment is prominent. Wild enthusiasm among local governments for transportation development often forces central government plans to be adapted to local plans. Plans for some local government transportation networks may be redone after new leaders are appointed. In addition, the limitations of current management authority have led to fragmentation among various modes of transport, which relevant government departments have a hard time coordinating....

Caixin: After the Wenzhou train crash, everyone has been concerned about the next step for high-speed rail planning and construction in China. What kind of plan do you think high-speed rail construction should follow?

Lu: Our view is that high-speed railway development in China has only begun. We still lack practical experience in safety and economic efficiency, as well as coordination with civil aviation and expressways, and we need to consolidate existing domestic and international experience. Internationally, the rational operating range for a high-speed railway is considered to be between 180 and 800 kilometers. On either end of this range are the operating ranges of expressways and aviation, respectively.

Caixin: There is a lot of talk about reforming various government departments. How do you see relations between transport authorities and other institutions?

Lu: Transport-related departments are currently too strong. Each has its own, strong planning and design institutions. But authorities in charge of comprehensive coordination are too weak and cannot negate the plans of functioning departments, such as the transportation ministry. There is no overall coordination for transportation construction, and department goals are neither unified nor coordinated. In this atmosphere, enthusiasm is stoked inside various departments, and the result is that each department launches individual, large-scale projects that greatly increase the overall scale and contribute to imbalance in the transport structure....

Behold, the miracle of central planning!  On the bright side, China's vaunted economic plans are at least consistent: now they have creepy ghost highways to connect their creepy ghost cities.  Heh.

But seriously, considering all of these problems, I'm sure that the Chinese government has pulled back on the infrastructure spending in order to implement the necessary reforms that Lu has proposed, right?

Errr:

Fresh funds appear to be flowing into China's beleaguered railway sector more than three months after a deadly train crash, which embarrassed Beijing and prompted it to reassess key aspects of the rapidly built system.

China's state-run Xinhua news agency, quoting unnamed sources, said on Tuesday that the Ministry of Railways expects a 200 billion yuan ($31.45 billion) funding injection soon, though it didn't indicate the source of the support. Calls to the Railway Ministry Tuesday evening weren't answered.

Also Tuesday, bullet-train and locomotive maker CSR Corp. said the ministry late last month made a key 6 billion yuan ($954 million) payment for equipment. Also, in recent weeks, the Railway Ministry itself raised 40 billion yuan selling domestic bonds.

Railway-sector stocks have been buoyed in recent days on hopes that money is being unlocked, in a possible sign that construction halted on thousands of miles of track may resume. Any fresh commitment to railway spending by Beijing is likely to be seen by financial markets as the latest sign authorities are moving to underpin the economy in the face of slowing growth.

Railway work in recent years has been a proud Chinese achievement, and a key aspect of the country's spending on infrastructure construction. But spending slowed this year after the collision in July of two bullet trains that killed 40 people and appeared to undermine the safety of the system. The disaster added to pressures that already included tighter Chinese monetary policy as well as closer scrutiny in the wake of scandals and equipment snafus.

Money has appeared tight at the Ministry of Railways, one of China's largest government institutions. After the July crash, analysts began to question how it might pay its long-term debts: Standard Chartered Bank estimated its debts at the end of the first quarter of 2011 at $300 billion and a debt-to-assets ratio above 58%. By October, railway contractors said work on thousands of miles of track and tunnels had been halted due to cash shortages, a slowdown that in some cases left migrant workers stranded.

Though the July crash prompted authorities to promise a full safety review of the high-speed railway system, Beijing hasn't announced a pullback from its commitment to modernizing the railway, including adding new freight capacity.

Still, there is no sign China's railway troubles are over.

Top railway officials, including the minister, were fired this year by Communist Party investigators on charges of corruption, though little information has been disclosed publicly. Speculation has also swirled that the central government could revamp the agency, possibly by separating its operation responsibilities from oversight roles.

Safety questions continue to hover over high-speed trains following the July accident in the eastern city of Wenzhou. It led to a recall of certain locomotives and a pledge by Beijing that inspections would be undertaken. One sign that clouds still linger: Beijing hasn't yet released a report of a probe into the July 23 crash that was expected in mid-September.

To summarize: government mismanagement of China's supposedly-awesome infrastructure spending has resulted in many wasteful - and often dangerous - bridges, highways and railways.  And despite serious problems surrounding China's vaunted rail program, the government is quietly dumping even more money into the current, broken system in order to maintain arbitrary GDP and employment benchmarks.  But, hey, I'm sure that they've, like, totally fixed all of that, right?

Rrriiiight.

China's infrastructure problems are hardly unique to China: they're typical of any highly-centralized plan to use construction spending as an economic and employment crutch.  And yet President Obama and Mr. Prestowitz (and many others) think we should copy China's master plan?

No thanks.

Obama's Jobs Bill Contains Protectionist Provisions (Shocking, I Know)

Is anyone - and I mean anyone - surprised by this news:

President Barack Obama's jobs plan has raised concerns in top trading partner Canada because of measures that would restrict foreign companies from participating in infrastructure projects....

Obama has proposed a $447 billion package of tax cuts and spending measures to spur hiring and revive a stalled economy, but the plan will be difficult for the Republicans to support and parts of it may never materialize.

The so-called Buy American clause prohibits the use of foreign-made iron, steel and other manufactured goods in public works projects.

...Republicans, which control Congress, are likely to block the Buy American provision because they believe it delays infrastructure projects and causes supply chains to freeze up unnecessarily...

Canada is the largest U.S. trading partner, with two-way trade worth about $1.4 billion a day.

In particular, Canadian Trade Minister Ed Fast stated today:

The U.S. Administration has just released details of the American Jobs Act. The Administration is proposing the inclusion of Buy American provisions as a part of the infrastructure funding proposal. Our government is committed to delivering free trade leadership and Canadians can count on our government to defend free and open trade on the world stage. In this fragile economic recovery, we know history has shown protectionist measures stall growth and kill jobs. I have instructed Canadian officials to initiate the consultation process that was established as part of the 2010 Canada-U.S. Agreement on Government Procurement. Our government will raise with the Obama Administration and Congress concerns regarding measures that impede access for Canadian workers and businesses to the U.S. market, as we did for earlier U.S. stimulus programs.

The text of Obama's American Jobs ActNameless Jobs Plan (heh) is available here, and Fast is correct to be concerned because Section 4(a) of the proposed legislation states quite clearly that "None of the funds appropriated or otherwise made available by this Act may be used for a project for the construction, alteration, maintenance, or repair of a public building or public work unless all of the iron, steel, and manufactured goods used in the project are produced in the United States." Section 231 contains another Buy American provision that's a carry-over from the 2009 Stimulus* Bill.

Speaking of the Stimulus*, as you may recall the extensive Buy American provisions in that law turned out, well, just about as poorly as the rest of the darned thing:

As I've already noted, the Stimulus* Bill's Buy American provisions have been an abject disaster - harming many US companies and literally causing the destruction of perfectly good raw materials out of fears that they didn't comply with a unnavigable labyrinth of bureaucratic regulations. And the GAO recently found that these same Buy American rules were creating massive inefficiencies in construction and manufacturing projects across the country. Awful.

Awful, indeed.  And, of course, a clear sop to American labor unions.  Good thing for us that Stimulus II: Son of StimulusObama's jobs plan will never, ever become law, as most everyone understands that it's a cynical campaign tool rather than a real attempt to improve the US economy (heck, even congressional Democrats think it's garbage).

Nevertheless, the inclusion of the Buy American provisions in Obama's new jobs plan is still important because, unlike the original Stimulus*, it wasn't drafted by protectionist congressional Democrats and instead came straight from the White House.  Thus, it's a clear signal that the President is perfectly willing to use protectionism (or threats of protectionism) to advance his re-election campaign.

It's also further proof (as if you needed any more) that President Obama has no principled commitment to free trade and instead promotes or rejects it as the political winds demand.  Given the 2012 election season and the dismal state of the US economy, those winds are going to be blowing in the wrong direction for the next 14 months.  Thus, no one should be surprised when the President pushes more protectionist proposals, regardless of how they hurt our economy, irk our trading partners, embolden domestic protectionists or further undermine America's decades-old image as the world's free trade leader.

Politix Can Make You Stoopid

It's often said that "politics makes strange bedfellows," but after yesterday's Senate Finance Committee hearing on the US-Panama FTA, I think you could safely add that it makes otherwise-smart people sound really, really dumb.  National Journal (no link - sorry) provides the latest proof:

A top administration trade official testifying Wednesday on Capitol Hill was short on specifics about how many American jobs, if any, could be lost because of a free-trade agreement with Panama.

Appearing before the Senate Finance Committee, Ambassador Miriam Sapiro, deputy U.S. Trade Representative for Europe, the Middle East, and the Americas, demurred on the question of which jobs would be lost and from what part of the economy they would come if the pact is ratified. The discussion was dominated by the Obama administration's renewed push to extend Trade Adjustment Assistance programs to help such workers.

Pressed on the jobs question repeatedly by Sen. Orrin Hatch, R-Utah, Sapiro became visibly frustrated.

“I don’t have an estimate for Panama,” she said, before adding that TAA is a “core value.”

Hatch pointed out that the Panama agreement, combined with pending Colombia and South Korea pacts, would bring an estimated $13 billion in business to the United States.

“Everything I’ve looked at says we can create jobs if we do these three trade agreements,” Hatch said. “What is there about this free-trade agreement that is going to cost any jobs?”

The federal Trade Adjustment Assistance program helps U.S. workers who have lost their jobs as a result of foreign trade through initiatives like job training and relocation allowances. The administration has tied renewal of the program to the three pending trade agreements going forward.

Sapiro told lawmakers that “a robust renewal of Trade Adjustment Assistance is so vital” and noted that the Obama administration “fully want[s] to see TAA restored in a manner that benefits those” workers displaced by trade.

So to recap: the Obama administration is loudly demanding that FTAs with Panama, Colombia and South Korea proceed through Congress with TAA - a program which is specifically designed to help American workers harmed (allegedly) by international trade. The White House thus has expressly and proactively linked the pending trade agreements to a policy that mitigates their (again, alleged) harms, but when asked to simply quantify these harms, the White House's spokesperson (DUSTR Sapiro) instantly sounds like a babbling doofus.

Smooth.

And look, it's not like Hatch is playing politics here (well, at least not entirely).  The inherent contradictions of the White House's TAA-FTA stance couldn't be more obvious to anyone paying the least bit of attention, regardless of his or her politics.  Folks who support free trade instantly noticed; for example, the editors at Investors' Business Daily stated:

Three days ago, U.S. Trade Rep. Ron Kirk in testimony before Congress described free trade as a job-creating machine. 'Continued growth in agricultural exports depends on accessing new markets for America's farmers and ranchers and ensuring their continued access to existing markets,' he told the House Agriculture Committee. Now, suddenly, it's a job killer.

Not to be outdone, the anti-trade left also cried foul (albeit for unsurprisingly different reasons):

While White House officials are claiming that a trio of pending trade pacts will result in job creation, they have tacitly revealed that they know the opposite to be true by the actions they have taken in recent days.

The fact that the president is demanding the extension of Trade Adjustment Assistance before sending bilateral free trade agreements with Colombia, Panama and South Korea to congress is a pretty good indicator that he’s aware of the consequences, according to David Sirota, writing at Salon.com.

“The administration is simultaneously selling the trade deals as engines of job growth while admitting that the deals will likely kill so many American jobs that Congress must preemptively cough up money to clean up the corresponding economic wreckage,” he writes.

Awesome.  So if both pro- and anti-trade groups immediately noticed the absurdity of the White House's FTA/TAA demands, you'd think that USTR would have some sort of canned response all ready to go when someone like Sen. Hatch dared to ask the blatantly obvious, right?

Wrong. 
Then again, I guess Sapiro had no choice but to dodge because she couldn't just respond with the truth, like: "Well, Senator, we don't have those numbers because, quite frankly, our TAA demand has nothing to do with these economically beneficial FTAs and instead is simply a political payout to one of our favorite and most powerful supporters, as well as a shrewd way to split the GOP and get congressional Republicans on the record as supporting a big chunk of the Stimulus*.  Sorry."

(Although that would've been awesome.)

And, hey, it's certainly not like Sapiro's the first smart White House official to magically lose a few dozen IQ points when confronted with the obviously problematic results of her boss' cynical political decisions.  Indeed, former CEA Chair Christina Romer became kinda infamous for her valiant-yet-futile attempts in 2009 and 2010 to defend her boss' ridiculous claims about the mythical job-creating effects of the Stimulus* (see, e.g., this hilarious video).  So Sapiro's certainly in good and plentiful company.

Of course, she and her bosses could've avoided this silly dance (and the continued delay of GDP-expanding FTAs that were completed and signed about 4 years ago) if they had just put politics aside for a split second, followed their own advice about these trade agreements and free trade more broadly, and submitted the FTAs to a Congress that had already indicated an overwhelming desire to approve them as soon as possible.  But that would have meant, you know, expending an iota of political capital to confront US labor unions and the ever-expanding protectionist wing of the President's own party.

And I guess anyone who expected this White House to actually do that is the real doofus, eh?

(h/t Andy Roth)

Becker, Posner Give Unions a Much-Deserved Beatdown

In their latest blog series, U. Chicago's Gary Becker and Richard Posner explain the effect of American labor unions on the US economy, and boy is it ugly.  Be sure to read the both entries in full - they're well worth your time.  But here are a few of my favorite excerpts.  First up is Becker:

Are the Democratic-controlled Congress and President Obama very much pro union? Unquestionably. Do the economic effects of unions on the welfare of workers as a whole justify that union bias? No. Has their pro-union orientation seriously retarded the recovery from the recession? Probably. ...

An important example this past week offers another illustration of the pro union orientation. For the first time the US has cited for labor violations a country, Guatemala, that is a free trade partner with the US. That the American government has the presumption to interfere in the labor policies of another country is disturbing in itself. All commentators agree, however, that it was done at the urging of American unions. This was likely an attempt to reduce the competition of goods and services from Guatemala and especially from other free trade partners-such as Mexico-for goods made by unionized American companies....

Economists distinguish competitive from monopoly unions. A competitive union system, like Japan’s, has unions at companies when the employees of these companies prefer to bargain collectively. However, competitive unionism does not allow a single union to control the majority of companies in the same industry, which is monopoly unionism. The US typically has monopoly unions, such as the steelworkers union, autoworkers union, or service workers union, but a long time ago the Clayton Act of 1914 explicitly exempted unions from anti-trust laws under most circumstances.

Monopoly unions do tend to raise the earnings and fringe benefits of workers in the industries where they exist. This is seen from the ridiculously high fringe benefits that the United Auto Workers unions squeezed out of American auto companies during the days when they were profitable but not well managed. Higher union earnings come partly at the expense of the profits of the industries unionized, but also at the expense of lower employment than would have occurred with more competitive wages and other benefits. The prospective employees priced out of jobs in unionized sectors seek employment in other sectors, which lowers the earnings of workers in these latter sectors. The net effect is a misallocation of labor compared to an efficient allocation, and possibly even a reduction in the income received by workers as a whole, including workers in the non-union sectors.

Now Posner:

Unions are weak in the private sector; only about 7 percent of private workers are unionized. But unions are powerful in the public sector—about 30 percent of public employees are unionized—and have contributed to the high wages of such employees. By swelling the labor costs of cities and states, these high wages have forced them to raise taxes and cut benefits in the midst of the most severe economic downturn since the Great Depression.

Even in the private sector, though unions are weak, employers are concerned that the pro-union policies of the Obama Administration will result in greater unionization and hence higher labor costs. This concern is a source of uncertainty, which slows economic activity. Under uncertainty consumers increase their savings (much of which may not get invested productively, at least without a considerable lag) and producers increase their cash balances....

The Administration has... under union pressure dragged on signing free-trade agreements that have been negotiated with South Korea and other countries. This would not retard our economic recovery if the net effect were to increase our exports relative to our imports, for exports increase domestic production and hence employment and imports tend to reduce it. But because of retaliation by foreign countries that want to increase their own exports and reduce imports, the effect of the Administration’s foot dragging is simply to reduce the efficiency of the U.S. economy. Also allegedly under union pressure, the Administration delayed suspending (as it is empowered to do in an emergency) the Jones Act, which protects the U.S. maritime industry from foreign competition, to enable foreign vessels to assist in combating the oil leak in the Gulf of Mexico.

Worse, the Administration has required that all projects funded by the $787 (now $862) billion stimulus enacted in February 2009 comply with the Davis-Bacon Act, which requires payment of union wages. Recently the President signed an executive order requesting all federal agencies to consider requiring all federal construction contractors to sign labor agreements. And he has said silly things like “labor is not part of the problem. Labor is part of the solution.” These are just words, but they worry business by creating the impression that the President is hostile to it, and they increase the uncertainty of an already uncertain business environment. The pro-union policies of the Roosevelt Administration, notably the National Labor Relations Act (the Wagner Act), are generally believed to have made the Great Depression worse than it would have been without those policies. The Obama Administration’s pro-union policies will in all likelihood worsen our current economic situation.

I'd only add that, when discussing union influence on the Stimulus*, Posner also should have mentioned the union-backed "Buy American" provisions, which prohibit the use of (most) imported materials for Stimulus*-funded projects.  Buy American, of course, has been a debacle for a load of previously-discussed reasons, but here I'd just add that, like the Davis-Bacon rules, Buy American has raised project costs by limiting (or eliminating) competition among materials suppliers (thus leading to higher steel, lumber, fiber optic, etc. prices).  In short, the American taxpayer gets less bang (e.g., bridges, roads, rail lines, etc.) for his taxpayer buck.  Of course, I'd prefer that our government not subsidize any of this stuff, but if we're going to do it, we might as well do it as efficiently and cost-effectively as possible.

(I know, I know, stop laughing.)

House Looking to Throw More (Bio)Fuel on the Green Trade Fire

Last week, I discussed how the rampant subsidization of "green industries" like US biofuels manufacturers, combined with increased US government efforts to increase exports, could lead to an onslaught of new trade cases in foreign markets or the WTO, as subsidized American "green" exports began to penetrate foreign markets and injure (or threaten) their competition.  Noting a new Australian anti-subsidy case against US biofuels, I said at the time:

Leaving aside the absurdity of a flat-broke nation subsidizing sketchy firms with borrowed money, stories like this have "future trade problem" written all over them. You see, cheap government loans to struggling domestic companies are a common example of an illegal (or "countervailable") subsidy under global trade rules. And, if Solyndra and Tesla survive (a big "if" from the looks of it), their exports to other nations that produce similar solar panels/electric cars would be very vulnerable to national trade remedies cases, just like those EU and Aussie cases against US biofuels. And if those cases result in new tariffs and copycat cases in other markets (a very common occurrence), these companies will lose precious foreign market share and, in some cases, could even go bankrupt entirely unless alternative markets quickly materialize. Big problem.

The US is simultaneously (i) throwing billions of tax dollars at companies like ADM, Cargill, Solyndra and Tesla through various agriculture and energy programs and (ii) pushing these companies' exports through the NEI. As I mentioned months ago, such a combination is a recipe for trade frictions and maybe even a bunch of new investigations of - and eventual tariffs on - US agricultural and "green energy" exports. So is the Australian biofuels case, and the EU one before it, a harbinger of bad things to come or just isolated instances caused by unique market conditions?

Well, according to The Hill, it appears that congressional Democrats are trying their darnedest to get us an answer to that question, but probably not in the way that most of us would have hoped:

House Ways and Means Chairman Sandy Levin (D-Mich.) hopes to put forward a bill next month that would provide tax incentives for creating green-energy jobs.

Details on the proposal have not been released, but extending the Section 48C program that provides a 30 percent tax credit for investments in manufacturing clean energy products could be included in the package.

For those of you who don't obsess over this stuff like, the "Section 48C" program was part of the Stimulus* bill and doled out about $2.3 billion in federal subsidies (through tax credits) to favored green energy manufacturers.  As the Energy Department explains, "[t]he Advanced Energy Manufacturing Tax Credit (MTC) was authorized in Section 1302 of ARRA....  The goal of the MTC is to grow the domestic manufacturing industry for clean energy, thereby supporting the larger goals of ARRA to stimulate economic growth, create jobs, and reduce greenhouse gas emissions.  In short, the MTC will help secure American leadership in the clean energy sector."  DOE's website also has a handy list of eligible industries, which, coupled with statements like the one above, would make any foreign or WTO case against US exports subsidized by this program pretty easy.  (For a primer on the elements of an illegal - or "countervailable" subsidy - go here.)

So to recap: many US "green" exports are already vulnerable to foreign and WTO anti-subsidy cases; two such cases already exist against US biofuels; and yet House Dems want to double-down on this recipe for trade trouble.

I guess they don't call this the "silly season" for nuthin'.

Fortunately, aforementioned article in The Hill also notes that the House measure will face a steep hurdle in the Senate, so maybe we're safe for now from another round of illegal, counterproductive and debt-financed subsidies to the administration's chosen "green" manufacturers.  But if the economy stays in the toilet through the end of the year, you can bet the house that more of this nonsense will re-emerge in 2011.

Friday Quick Hits

Lots of small things going on today worth noting:

• US promises world that it'll comply with WTO rulings on "zeroing"; world calls bulls**t.  BNA (subscription) reports that, at a March 3-4 WTO negotiating meeting, the United States was telling anyone who would listen that it, like, totally intends to comply with a bundle of WTO rulings against its use of “zeroing” in antidumping investigations.  As you might recall, "zeroing" artificially (and, of course, illegally) inflates dumping margins (duties) on foreign goods, and the US has refused to fully comply with the aforementioned WTO decisions where they involve reviews of existing antidumping orders. (They're complying with decisions involving original investigations.)  Given these facts, WTO Members are rightly skeptical of the US claims: “We are concerned about a usual cosmetic change which would be far from compliance,” said one overly-polite WTO official.  Unofficial translation: "Riiiight. You're totally going to issue some fake 'change' that still ends up screwing our exporters." Meanwhile, both the EU and Japan are proceeding along the long and winding legal road to retaliating against US exports because of American non-compliance on zeroing - to the tune of about $311 and $248.5 million, respectively.  Awesome.

• Schumer makes it official: it's re-election season.  The Wall Street Journal reports that Senator Charles Schumer (D-Campaigning) and three other awesome Democrat Senators (Brown, Casey and Tester) have proposed legislation - the "American Renewable Energy Jobs Act" - that would block the Energy Department from using stimulus funds to subsidize wind-energy projects that use foreign-made turbines. Their main target is a proposed wind-energy project in Texas where the backers plan to use wind turbines made with Chinese components.  Of course, while the Senators chest-thumped about China, they curiously omitted that: (i) the targeted Texas company hasn't even filed for Stimulus* funding yet; (ii) the legislation is vigorously opposed by both Energy Secretary, and fellow Democrat, Steven Chu ("You do not want to stop these projects if two-thirds [of the hardware] is American and one-third is foreign.") and the primary beneficiaries of such legislation - the American Wind Energy Association ("[A]pproximately 40,000 American jobs were saved by [Stimulus*-funded wind] projects.... The Schumer proposal would shut the program down... because no wind developer could meet the strict requirements of the Schumer Buy American amendment--the United States simply does not have the manufacturing capacity yet to produce 100% of the turbine parts."); and (iii) as I noted a while ago, the demonized Chinese products contain lots of US (and German) components.  But hey, Schumer's up for re-election, and China demagoguery is one of his signature campaign moves, so facts be damned!

• There's a new sheriff in town, and he's not a big fan of those pending FTAs.  Due to serious ethical concerns, Congressman Charlie Rangel (D-NY) is now on "temporary leave of absence" from his  chairmanship of the House Ways & Means Committee - the primary House committee that deals with US trade issues and the only House committee that must, by law, review any of the pending FTAs with Colombia, Panama or South Korea before the Houses vote on them.  Rep. Sander Levin (D-UAW) will replace Rangel, and, as Reuters reports, he's not a big fan.  Granted, I didn't think that these FTAs were going anywhere in 2010 anyway, but this change should pretty much seal the deal.

UPDATE 6: Lies, Damned Lies and Stimulus* Statistics

I know I sound like a broken record, but this news - released on a Saturday night! - seems to have escaped the scrutiny that it deserves, so here ya go:

Recipients of economic-stimulus money said 599,108 workers were being paid by the funds in the last quarter of 2009, fewer than the number of jobs attributed to the package in the seven months after it was enacted.

The recipients' reports, published on the official government Web site recovery.gov late Saturday, are likely to fuel further controversy over the impact of the $787 billion package, as Democrats craft new jobs-creation proposals to address the country's 10% jobless rate. Many opinion polls suggest that most voters don't believe the current stimulus program, which was passed last February, is working....

The administration could face difficulty explaining how the reports square with its own calculations that the plan kept between 1.5 million and two million jobs in the economy through the end of 2009.
In his State of the Union address to Congress last week, President Barack Obama said that "because of the steps we took, there are about two million Americans working right now who would otherwise be unemployed."

Those projections are based on macroeconomic models and try to include the number of jobs that exist indirectly as a result of people being hired to work on stimulus projects, or of people receiving food stamps or other aid funded by the stimulus program.

Vice President Joe Biden said in a statement that the 599,108 total was "a snapshot of the impact of a small portion of funds" and that the stimulus plan was on track. The reports cover about $54 billion of stimulus spending, Mr. Biden said. Federal agencies say that an additional $215 billion has been paid out in aid and tax cuts....

Stimulus recipients previously reported that they had directly "created or saved" 640,329 jobs by Sept. 30, but their filings were criticized after it emerged that some people had reported saving jobs when they had actually spent the money on pay raises or paying employees who were not in danger of being laid off.
In December, the White House Office of Management and Budget changed its guidance, telling recipients they should start counting every worker whose salary was funded with stimulus money, rather than guessing whether the jobs would have existed in the absence of the federal plan. Opponents of the program accused the administration of "moving the goal posts" to make the plan appear more successful.

Let's see: Saturday night release, misreporting, underreporting, changing the reporting rules, fail, fail, fail.  And now the White House wants to borrow another couple hundred billion taxpayer dollars for another stimulating debaclejobs bill. 

Sign me up!

UPDATE5: Lies, Damned Lies and Stimulus* Statistics

This ABC report pretty much speaks for itself:

More than 50,000 jobs, or one out of every 10 jobs the White House says were "saved or created" by their economic stimulus plan, came from projects that reported spending no money yet, according to a government report obtained by ABC News.

The report by the Government Accountability Office analyzes the administration's October 2009 report on jobs saved or created by the $787 billion stimulus program and finds a "range of significant reporting and processing problems that need to be addressed." ...

The new GAO report finds that 58,386 of the more than 640,000 "saved or created" jobs listed on recovery.gov are from stimulus projects where no money has yet been spent.

On the flip side, the report finds nearly 10,000 projects that report spending a total of $965 million without creating any jobs at all.

The report also raises questions about how closely the contracts are being monitored. Twenty-five percent of the more than 130,000 primary contracts listed were not marked as having been reviewed by any government agency, and less than 1 percent of subcontracts were reviewed.

Here's the ABC video report. Oy vey.

UPDATE4: Lies, Damned Lies and Stimulus* Statistics

More news rolled in today on the White House's bogus Stimulus* job statistics:

• ABC News:  "Obama Admin Slashed 60,000 Jobs From Recent Stimulus Report." So not only are you saying that the White House was aware of these ridiculous reports, but you're also saying the report could have been a lot worse?!?! Yikes.
  

• Detroit Free Press (courtesy of HotAir): "Billions for state, but where are jobs? Majority of stimulus awards have brought little help." "[The Free Press'] analysis also revealed that others who have been promised or have received stimulus money have overstated -- in some cases greatly -- the number of jobs created or protected."

Finally, the hardworking folks over at the Washington Examiner have done a much better - and more technologically savvy - job than I've done at documenting all of the Stimulus* misreporting.  They've produced an interactive map, available here, which shows that - so far - the White House's report overcounted jobs by at more than 10%.  I say "so far" because not all state newspapers have completed their analyses.

75,343 fake jobs and counting!  Viva la HopeChange!

UPDATE3: Lies, Damned Lies and Stimulus* Statistics

Like the sands of the hourglass, so are the stories of ridiculous, bogus Stimulus* job statistics.  This week, the Boston Globe - hardly the hyper-critic of the Obama administration - unveils their review of the Massachusetts Stimulus* job numbers that those zany White House "triple-checkers" released a couple weeks ago:

While Massachusetts recipients of federal stimulus money collectively report 12,374 jobs saved or created, a Globe review shows that number is wildly exaggerated. Organizations that received stimulus money miscounted jobs, filed erroneous figures, or claimed jobs for work that has not yet started....

One of the largest reported jobs figures comes from Bridgewater State College, which is listed as using $77,181 in stimulus money for 160 full-time work-study jobs for students. But Bridgewater State spokesman Bryan Baldwin said the college made a mistake and the actual number of new jobs was “almost nothing.’’ Bridgewater has submitted a correction, but it is not yet reflected in the report....

“There were no jobs created. It was just shuffling around of the funds,’’ said Susan Kelly, director of property management for Boston Land Co., which reported retaining 26 jobs with $2.7 million in rental subsidies for its affordable housing developments in Waltham. “It’s hard to figure out if you did the paperwork right. We never asked for this.’’

The federal stimulus report for Massachusetts has so many errors, missing data, or estimates instead of actual job counts that it may be impossible to accurately tally how many people have been employed by the massive infusion of federal money. Massachusetts is expected to receive an estimated $1 billion more in stimulus contracts, grants, and loans....

“We see $15 million construction projects with no jobs, and a $900 shoe sale that created nine jobs. Both are obviously wrong,’’ said Michael Balsam, chief solutions officer for Onvia, a Seattle data company tracking the stimulus spending. “There were a lot of recipients that did not report. Those that did report have some data challenges - wrong data or missing data.’’...

Some of the errors are striking: The community action agency based in Greenfield reported 90 full-time jobs associated with the $245,000 it got for its preschool Head Start program. That averages out to just $2,700 per full-time job. The agency said it used the money to give roughly 150 staffers cost-of-living raises. The figure reported on the federal report was a mistake, a result of a staffer’s misunderstanding of the filing instructions, said executive director Jane Sanders.

Several other Head Start agencies also reported using stimulus funds for pay raises and claimed jobs for it.

At Bridgewater State, Baldwin said the college mistakenly counted part-time student jobs as full time.

Some agencies that received stimulus money reported jobs for work that had not started. The Greater Lawrence Family Health Center reported 30 construction jobs “have been created,’’ even though it hadn’t begun construction on a $1.5 million renovation and expansion. Grant administrator Beth Melnikas said the health center does expect to hire 30 workers....

For example, the City of Waltham said a $630,500 solar panel installation on the roof of City Hall created 10 jobs - even though the work had yet to begin. Revere spent $485,500 in stimulus funds to install solar panels on the roof of a city school. Revere’s job count? 64....

Massachusetts property owners received $75.5 million in rental subsidies from the stimulus bill, for a reported total of 437 jobs. Recipients of 27 of the 87 contracts reported zero jobs. The others, meanwhile, simply reported the number of employees working at the property. If they received two contracts, for a larger property, they reported the employee figure twice.

For example, Plumley Village East in Worcester listed 23 jobs for each of its two contracts for a total of 46 jobs, even though it has only 23 employees working throughout the complex....

One of those property owners, meanwhile, is frustrated by his experience with the legislation. Robert Ercolini manages a 201-unit affordable housing development in Plymouth. After being notified his annual rental subsidies were classified as stimulus spending, Ercolini renewed a request to the US Department of Housing and Urban Development for more than $1 million to fix up the property, reasoning he would be creating jobs by hiring contractors. He was refused.

“After HUD denied me money to make needed improvements and actually create jobs,’’ Ercolini said, “it’s really funny to find out in September that I’ve been receiving stimulus funds all along and they want to know how many jobs we’ve saved or created.’’

By his count, the answer is: “No jobs.’’

No.  Jobs.  None.  You know, these stories would be kinda funny, if they hadn't, you know, been appearing all over the country at a taxpayer cost of $795 billion (sans interest).  Hence, not funny. At all.

But wait, there's more.  The good folks over at HotAir have found another news story (they list several, but I've already cited the others) that documents similar instances of "wild exaggeration":

In Connecticut, the accounting for jobs saved and created apparently neglected to check the work, claiming that Porkulus funds saved 108 jobs in a police department of 22 officers — who weren’t at risk of being laid off anyway. In Texas (same link), a contractor hired five roofers and an inspector to replace some fencing and roofs in a town of 900 people, and got credited with saving 450 jobs.

This is quickly becoming a nationwide scam, isn't it?  A despicable, nationwide scam.

Anyway, for those of you playing the Stimulus* home game (costs $795; broken on arrival) and keeping score on the number of states that have - so far - reported bogus job stats, here's your new tally: Connecticut, Georgia, Kentucky, Illinois, New Jersey, Milwaukee, Massachusetts, Oregon, Florida, Texas and California.

Santa Claus, the Easter Bunny, and a Stimulus* job walk into a bar....

Update2: Lies, Damned Lies and Stimulus* Statistics

Another day, another story of bogus Stimulus* job numbers.  Today's episode comes from California, courtesy of the Sacramento Bee:

Up to one-fourth of the 110,000 jobs reported as saved by federal stimulus money in California probably never were in danger, a Bee review has found.

California State University officials reported late last week that they saved more jobs with stimulus money than the number of jobs saved in Texas – and in 44 other states.

In a required state report to the federal government, the university system said the $268.5 million it received in stimulus funding through October allowed it to retain 26,156 employees.

That total represents more than half of CSU's statewide work force. However, university officials confirmed Thursday that half their workers were not going to be laid off without the stimulus dollars.

"This is not really a real number of people," CSU spokeswoman Clara Potes-Fellow said. "It's like a budget number."...

Asked how many jobs actually would have been lost at CSU campuses without the stimulus infusion, Potes-Fellow said she did not know, though she said it would have been significant.

Translation: "We have no freakin' idea, but trust us, it's plenty!"

Adding this news to the earlier stories that I've previously noted, we now have bogus White House Stimulus* job stats from Georgia, Kentucky, Chicago, New Jersey, Milwaukee, Boston, Oregon, Florida and California.  I have no doubt that more of these ridiculous, anger-inducing stories are on the way, and at some point we'll probably need to ditch the whole report and stop "just trusting them."

Actually, with unemployment at 10.2%, I'd say that now is that point.

Update: Lies, Damned Lies and Stimulus* Statistics

The Mercatus Center's Veronique de Rugy has more evidence of ridiculous Stimulus* job-counting over at NRO's The Corner.  She finds stories from The Milwaukee Journal Sentinel, Boston.com (a repeat of the AP article I cited yesterday), and - gasp! - the New York Times that all indicate massive over-reporting in the White House's latest jobs report.

Her conclusions on the NYT Article:

The Times says reports released last week "from more than 130,000 recipients of stimulus money in which they claimed to have saved or created more than 640,000 jobs" are in some cases "simply wrong, while others contain apparently subjective estimates."

Basically, the newspaper admits that maybe the administration can't really calculate the number of jobs saved or created with the stimulus money.

DOH!  Read the whole thing, and the linked articles, here.  That now makes five news stories - reporting from Georgia, Kentucky, Chicago, New Jersey, Milwaukee, Boston, Oregon and Florida - highlighting the rampant problems with the "triple-checked" report.

640,239 jobs "saved or created," huh?  Umm, yeah, not so much.

Lies, Damned Lies and Stimulus* Statistics

[UPDATES here and here]

When the White House announced last week (with a straight face) that the Stimulus* had "saved or created" exactly 640,239 jobs, most "mainstream" media outlets got out their official Hopenchange flatware and ate that raw data up.  And they did it despite the fact that the AP issued a report just a day earlier eviscerating the accuracy of the original Stimulus* jobs report.  But who can really blame the MSM?  I mean, this time, the White House said they had - wait for it - "triple checked" the numbers, so they had to be dead-on, right?

Wrong.

Since the release of the administration's latest jobs report, the reports of inaccuracy have come flying in from all over the nation.  And they are absolutely ridiculous.

First, we have the AP informing us today that stimulus*-caused salary raises were counted as "saved jobs":

President Barack Obama's economic recovery program saved 935 jobs at the Southwest Georgia Community Action Council, an impressive success story for the stimulus plan. Trouble is, only 508 people work there.

The Georgia nonprofit's inflated job count is among persisting errors in the government's latest effort to measure the effect of the $787 billion stimulus plan despite White House promises last week that the new data would undergo an "extensive review" to root out errors discovered in an earlier report.

About two-thirds of the 14,506 jobs claimed to be saved under one federal office, the Administration for Children and Families at Health and Human Services, actually weren't saved at all, according to a review of the latest data by The Associated Press. Instead, that figure includes more than 9,300 existing employees in hundreds of local agencies who received pay raises and benefits and whose jobs weren't saved....

The administration now acknowledges overcounting in the new numbers for the HHS program. Elizabeth Oxhorn, a spokeswoman for the White House recovery office, said the Obama administration was reviewing the Head Start data "to determine how and if it will be counted."

But officials defended the practice of counting raises as saved jobs.

"If I give you a raise, it is going to save a portion of your job," HHS spokesman Luis Rosero said.

The latest stimulus report, released Friday, significantly overstates the number of jobs spared with money from programs serving families and children, mostly the Head Start preschool program. The report shows hundreds of the programs used nearly $323 million to provide pay raises and other benefits to their existing employees....

Many Head Start programs around the country went further, counting everyone who received a raise as a job saved....

The Bergen County Community Action Program in Hackensack, N.J., noted the nearly $213,000 it received went to cover raises for existing staff only, but it also reported saving 85 jobs.

At Southwest Georgia Community Action Council in Moultrie, Ga., director Myrtis Mulkey-Ndawula said she followed the guidelines the Obama administration provided. She said she multiplied the 508 employees by 1.84 — the percentage pay raise they received — and came up with 935 jobs saved.

"I would say it's confusing at best," she said. "But we followed the instructions we were given."...

More than 250 other community agencies in the U.S. similarly reported saving jobs when using the money to give pay raises, to pay for training and continuing education, to extend employee work hours or to buy equipment, according to their spending reports.

I'll let it slide that government employees are getting raises while most of the private sector has experienced pay cuts, pay freezes or outright layoffs.  Instead, I ask you to take a moment to wrap your head around the last example provided: 508 employees got a Stimulus*-inspired raise of 1.84%.  Even assuming that this "pay raise = saved job" logic is correct (and it's obviously not) the "right" number of "saved jobs" would be 9.35 (508*.0184), not 935.  That's an overstatement of 100 times!  Hummina hummina.

Second, we have the Chicago Tribune reporting that the Illinois stimulus* cash saved more school district jobs than actually exist:

More than $4.7 million in federal stimulus aid so far has been funneled to schools in North Chicago, and state and federal officials say that money has saved the jobs of 473 teachers.

Problem is, the district employs only 290 teachers.

"That other number, I don't know where that came from," said Lauri Hakanen, superintendent of North Chicago Community Unit Schools District 187.

The Obama administration last week released the first round of data designed to underpin the worthiness of its economic stimulus plan, which so far has directed $1.25 billion to Illinois schools. That money has helped save or create 14,330 school jobs in the state, the administration claimed.

But those statistics, compiled initially by the Illinois State Board of Education, appear riddled with anomalies that raise questions about their validity, according to a Tribune analysis of district-by-district stimulus spending and other state data. Many local school officials were perplexed by the stimulus data attributed to their districts.

In the official report, Wilmette Public Schools District 39 was credited with 166 jobs saved by stimulus aid. Superintendent Raymond Lechner said the number should be zero.

At Dolton-Riverdale School District 148, stimulus funds were said to have saved the equivalent of 382 full-time teaching jobs -- 142 more than the district actually has.

A similar discrepancy was found in data for Kankakee School District 111, where the stimulus report logged the equivalent of 665 full-time jobs saved. "That's impossible," a top Kankakee school official said, adding that the entire payroll -- full and part time -- is 600 workers....

Statewide, districts reported using most of their stimulus funds to prevent layoffs, with the equivalent of just 222 full-time jobs added to payrolls....

It appears the state treasury -- not students or school districts -- was the prime beneficiary of the education stimulus jackpot in Illinois. In great measure, funds simply were used to replace general aid payments already owed to local districts by the state. That gave Gov. Pat Quinn breathing room in his struggle to rein in a whopping two-year budget deficit of more than $10 billion....

[O]fficials of several districts contacted by the Tribune insisted they never provided the state with the jobs numbers used in the official tabulation....

Some local school officials suggested that the jobs data sent to the state appeared to have been overcounted in the official tabulation....

Just a handful of the jobs were new, Rafferty said, and he warned that every position propped up by stimulus money would be in jeopardy when the program expires. "Unless there's a guarantee of continuation of (federal or state) money, the vast majority of these will be eliminated because there won't be local resources to fund them," he said.

Of course, this collapse of basic mathematics is even more troubling since our nation's teachers are the ones making the mistakes.  That travesty aside, I think the last paragraph is probably the most distressing part of the story: the few jobs that the Stimulus* actually did create aren't even self-sustaining.  They disappear unless more taxpayer cheese magically appears.  That kind of "job creation" is not a recipe for long-term economic growth.

Third, the Wall Street Journal has dug into the latest report and found that the data are overstated by, at a minimum, tens of thousands of jobs:

Recipients of the government grants and contracts appear to have made mistakes when estimating the number of jobs that have been saved or created, according to the Journal's review. Some recipients said they were confused by forms that asked how they spent the money....

Ed DeSeve, the senior adviser to President Barack Obama on implementation of the stimulus plan, said Tuesday in a statement responding to questions from the Journal that the administration knew the reports were not "100 percent accurate" but that the plan was supposed "to create jobs, not count them." He said that even the "approximate" total pointed to "tremendous progress."

"We are looking at both overcount reports and undercount reports, and continue to ask questions of recipients to try to fix errors," Mr. DeSeve said. "In the end, we think any adjustments to the direct jobs count will be modest as a percentage of the 640,000 jobs total, either raising it or lowering it slightly."...

Some colleges and universities counted every part-time student work-study position as a full-time job, according to their reports, which are published online at recovery.gov.

And some low-income housing landlords whose decades-old contracts with the federal government were funded by the stimulus this year reported a total of 6,463 employees as having jobs linked to the stimulus package.

Most recipients of stimulus money are required to file quarterly reports on how they used it. The government published more than 150,000 such reports late last week. A preliminary review revealed dozens of recipients claiming to have created or saved at least one job with less than $2,000 in stimulus money, to a total of at least 3,300 jobs.

A Kentucky shoe-store owner claimed to have created or saved nine jobs with an $889.60 contract to supply work boots to the Army Corps of Engineers. The owner said he supplied nine pairs of boots and that the mistake arose from confusion over the government form.

In addition, as many as 86% of the jobs estimated by recipients of Head Start grants could have been inaccurately reported, according to the Department of Health and Human Services. The department said 277 of the 1,601 reports it had received were being reviewed after being contacted by the Journal. Those reports claimed 7,753 jobs created or saved out of a total of 8,997 reported.

"Holy moly, that's not right," Teresa Cox, executive director of the Mid-Willamette Valley Community Action Agency in Salem, Ore., said of her organization's report. It indicated that 205 jobs were created or saved with the agency's $397,761 federal grant. The money, she said, was used for pay raises.

Ms. Cox said her agency thought it was supposed to report the number of employees affected by the stimulus money. "And the only way to do that was to create new jobs or retain jobs."

An HHS spokesman, Luis Rosero, said the department had told recipients to report only fractions of a job if the money was being used for bonuses or raises.

Stetson University in DeLand, Fla., counted every part-time work-study position funded by the stimulus, and, in some cases, more than one work-study position held by the same student. That led to the university reporting that it had created or saved 483 jobs with a $193,469 grant for its work-study program.

University spokeswoman Cindi Brownfield said the campus has since realized that the actual jobs number should have been written as the full-time equivalent of the jobs -- probably between 18 and 30.

Holy moly is right, Ms. Cox.  Holy frickin' moly.

And you just gotta love Mr. DeSeve's classic bureaucrat blowoff of "Whatever, dude, it's only billions of unaccounted-for taxpayer dollars.  Not my problem."  Totally, man.

But hey, look, maybe we also shouldn't blame the people who reported the worthless data.  According USA Today (check out Maxine Waters' awesome "look of utter exasperation"), some government subagencies that have accepted hundreds of millions in Stimulus* funds are totally and utterly incapable of accounting for the funds and disbursing them properly.  So cut them some slack: it's not their fault that they don't understand percentages!  Fractions are hard!

And yet, these are the same people - the same architects, advisers, bureacrats and government employees - who are demanding that we trust them with reorganizing and controlling the entire American healthcare system (one-sixth of the whole US economy).

I don't know about you, but I wouldn't even trust them with 1.84 percent of it.

Headline Of The Week

Courtesy of the brilliant euphamists at the New York Times:

"$1.4 Trillion Deficit Complicates Stimulus Plans"

Umm, yes, I would say that an annual US budget deficit of 1,417,000,000,000 (three times larger than any deficit ever) would complicate Democrats' efforts to further explode the deficit by spending more money that we don't have on things that don't work.  How complicated!

My preferred headline: 

"-$1.4 Trillion.  Holy Crap."

Top-Eds

Top-eds will be a recurring feature in which I highlight some of the better opinion pieces and editorials for the day/week. Hence, "Top-eds." Get it? Oh, shut up.

He Said/VIP Said - Mark Steyn, NRO

-Steyn's tone is a little over-the-top, but I haven't read a more devastating takedown re: Gates-gate.

What You Might Not Know About the Recovery - Vice Pres. Joe Biden, NYT

-The op-ed itself is drivel, but it's noteworthy because of Biden's (and, by extension, the administration's) complete about-face on how the Stimulus* was supposed to work.

5 Freedoms You'd Lose in Health Care Reform - Shawn Tully, Fortune

-Tully reads the ObamaCare bills so we don't have to. Unsurprisingly, personal liberty loses. Big.

The White House Goes to War Against the CBO - Ed Morrissey, Hot Air

-Morrissey details the Orzag-Elmendorf tensions (Nerdfight!) and the White House's overt, and pretty unprecedented, attacks on the CBO.