…is floundering:
It is a wonder, this faith-based (and often campus-based) conviction that the government that brought us the ethanol program can be trusted to precisely execute wise policies that will render the world predictable and progressive.
For two years, there has been one constant: As events have refuted the Obama administration’s certitudes, the administration has retained its insufferable knowingness. It knew that the stimulus would hold unemployment below 8 percent. Oops. Unemployment has been at least 9 percent in 26 of the 30 months since the stimulus was passed. Michael Boskin of Stanford says that, even if one charitably accepts the administration’s self-serving estimate of jobs “created or saved” by the stimulus, each job cost $280,000 — five times America’s median pay.
And research by Garett Jones and Daniel M. Rothschild of George Mason University’s Mercatus Center indicates that just 42.1 percent of workers hired by entities receiving stimulus funds were unemployed at the time. More (47.3 percent) were poached from other organizations, and 10.6 percent came directly from school or outside the labor force.
Obama’s administration, which is largely innocent of business experience, knew its experts would be wizards at investing taxpayers’ dollars. Oops.
“Floundering” is too kind a word, I think. Can I be emancipated from this “family,” please?
I think I will play the “Barney” song in my head whenever I hear the phrase from now on.
All of the other criticisms of the stimulus aside, I am not sure that taking the amount of money a company received and dividing it by the number of employees hired is a good way to determine cost per employee. It is a very simplistic metric that doesn’t tell us what the money was spent on.
If you have a small business with four employees and $1m in capital investments, would you say the cost of each employee is $250,000? The $1m is the cost of keeping the business running. There isn’t a business out there that divides their total costs by the number of employees to determine their cost per employee.
That would lead to bad decisions like thinking you could fire someone and save $250,000.
What it emphasizes is the complexity of running a business.
I guess in the absence of knowing how the money was spent specifically, it is a blunt metric but it would be nice to know more.
This however is an excellent take down:
“And research by Garett Jones and Daniel M. Rothschild of George Mason University’s Mercatus Center indicates that just 42.1 percent of workers hired by entities receiving stimulus funds were unemployed at the time. More (47.3 percent) were poached from other organizations, and 10.6 percent came directly from school or outside the labor force.”
wodun, that would make sense if you were investing in the company – and, of course, for such investments no one uses that metric.
However, when the explicit goal is job growth, it make sense to divide by the number of jobs created. Honestly, if the government wants job growth and the company spends all the money received on capital expenses something isn’t working!
True enough. I like the more detailed criticisms though.
Give $250k each to the right four people and you’ve created hundreds of jobs. This is what banks did before the government screwed that up.
It’s a good metric because it’s simple to understand.
Clean house.