Monday, September 12, 2011

Obama's Jobs Act: It's Terrible, Here's Why

There have been many analyses provided on Obama's job speech, so I'll keep my commentary short and link you to a few good sources to compliment the analysis (scroll to bottom). 

The entire transcript for Obama's "Jobs Speech" can be found here, while the analysis is as follows. Quotes are italicization and indented. Keywords for analysis are underlined by the author. Let's begin...
These men and women grew up with faith in an America where hard work and responsibility paid off. They believed in a country where everyone gets a fair shake and does their fair share – where if you stepped up, did your job, and were loyal to your company, that loyalty would be rewarded with a decent salary and good benefits; maybe a raise once in awhile. If you did the right thing, you could make it in America.
In this paragraph Obama describes his interpretation of what American workers use to believe. His first sentence is correct where he indicates hard work and responsibility used to pay off. Today that has been destroyed by government, unions, and wall street to name a few. This is rooted in moral hazard, inefficiency, and criminal acts that occur by wall street firms that are essentially sanctioned by the government. In essence, the government has destroyed the rewards associated with hard work by tinkering with the economy and selective implementation and creation of law. He also says "...a country where everyone gets a fair shake and does their fair share..." This is an absolutely skewed interpretation, outright false, and plain un-American. I hope I've made my disdain for this clear. America was never about being fair (nor is life), it was about being just, where everyone was issued the same rules. This is the difference between communism/socialism and free market capitalism. The fact that the president actually said this in such a prominent speech should raise alarm for everyone as it is not what America was ever suppose to be about. Moving on...
...Building a world-class transportation system is part of what made us an economic superpower...
The American Jobs Act will repair and modernize at least 35,000 schools. It will put people to work right now fixing roofs and windows, installing science labs and high-speed Internet in classrooms all across this country. It will rehabilitate homes and businesses in communities hit hardest by foreclosures. It will jumpstart thousands of transportation projects all across the country.
An issue that I have with these "public works" job creation plans is they simply don't work, especially in modern day America where we're not trying to truck along dirt roads. There are two ways that you can look at this, short-term and long-term. In the short-term you can create busy work, but that doesn't necessarily result in long-term gain. The government doesn't have the ability to correctly dictate which projects are needed, which inevitably results in misallocation of capital, inefficiency, and waste. Instead the government should simply let the private sector keep their money and invest it efficiently as the markets determines where the best dividend producing projects are. To think that a government bureaucracy is efficient enough or intelligent enough to determine how capital should be allocated is naive at best. Would you let the government invest your personal funds? Of course not, but that's exactly what they are doing when they take and allocate capital as they see fit. There is absolutely no difference, and the outcome is always the same--disastrous.
It’s not just Democrats who have supported this kind of proposal. Fifty House Republicans have proposed the same payroll tax cut that’s in this plan. You should pass it right away.
In this short paragraph the president is trying to appeal for consensus. This should really indicate that the proposal is even more toxic as there is plenty of incompetence in Washington to go around.

With this short commentary, I'll turn you over to the videos below, which address the details more completely, and in the interest of efficiency, I won't repeat what's already been said, even if it is "shovel-ready."

Addressing some other points of Obama's speech

Peter Schiff (always a must watch)


VisionVictory Channel. He discusses the moral hazards associated with Obama's proposal and some other current events including the Swiss Franc flash crash, which can be found in a previous post here.

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