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Keynesian Stimulus Caused "Job Switching"

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Mike

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instead of creating jobs. WE TOLD YOU SO!!!!!!!!!!!!

Study: Stimulus Funds Primarily Used to Poach Workers, Not Hire Unemployed


12:14 PM, Aug 31, 2011 • By MARK HEMINGWAY


The Mercatus Center at George Mason University has just released an important new study on the hiring practices of firms that used stimulus funds. It's fairly comprehensive, based on over 1,300 surveys of managers and employees. There's been very little good empirical data on the stimulus thus far, so the study contains a lot of valuable insights. Among the findings by authors Dan Rothschild and Garrett Jones:


Hiring isn’t the same as net job creation. In our survey, just 42.1 percent of the workers hired at ARRA-receiving organizations after January 31, 2009, were unemployed at the time they were hired (Appendix C). More were hired directly from other organizations (47.3 percent of post-ARRA workers), while a handful came from school (6.5%) or from outside the labor force (4.1%)(Figure 2). Thus, there was an almost even split between “job creating” and “job switching.” This suggests just how hard it is for Keynesian job creation to work in a modern, expertise-based economy: even in a weak economy, organizations hired the employed about as often as the unemployed.

Put simply, stimulus funds caused more job shifting than job creation. Another key finding? Union-friendly wage protections kill jobs:


Among organizations required to pay prevailing wages, 38.2 percent thought that they could have hired workers at wages below the Davis-Bacon prevailing wage (Figure 3) while another 17 percent were unsure. This meant higher costs for the federal government and fewer jobs created.



More Economists Agree — the Stimulus is a Failure





The idea that the Stimulus' Davis-Bacon requirements undercut the supposed job creation benefits of government spending isn't a new revelation. However, this is pretty definitive confirmation this was one of major reasons the stimulus failed to live up to job creation expectations.
 

hypocritexposer

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Read a report the other day: "Employers cannot find enough suitable employees to fill the vacant jobs they have at present."
 

Tex

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While Keynes was right about his call for stimulus, there are some real reasons that a stimulus of the sort he advocated would not do what he said would happen in this economy.

We import so many of our goods from China that much of a straight stimulus goes directly to China, not here in the U.S.

That is the reason they are focusing on all this infrastructure. The problem is that the economic infrastructure is the problem. Our politicians have done the worst job at international trade starting with Clinton all the way to the present.

40 to 60 billion a month goes out in net the net trade deficit where we end up trading our industries for the govt. getting a lower interest rate on their borrowing.

http://www.frbsf.org/education/activities/drecon/2007/0706.html

Tex
 

hypocritexposer

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hypocritexposer said:
Keynesian economics did not work that well during the depression and it works less so with the socialist globalization of today.

the government spending that would be needed to stimulate the "Global" economy, would do more harm than good.

If you don't have the manufacturing capability or demand for labour domestically, then any stimulus would need to work it's way through the whole global market, to be of any benefit.

That amount of money printing would ellipse any benefit, through inflation.

How are those commodity prices doing?
 

Mike

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That is the reason they are focusing on all this infrastructure. The problem is that the economic infrastructure is the problem

All those shovel ready projects really went well for us didn't they?

Keynesians are fools. At least 25%+ of government stimulus funds are taken right off the top in administration. Talk about economic infrastructure being a problem. No wonder.

If the Democrats had their way, they would order 50 Gazillion dollars in infrastructure work.

We'd have the best roads and bridges in the world but no cars or money to drive over them with.
 

Tex

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hypocritexposer said:
hypocritexposer said:
Keynesian economics did not work that well during the depression and it works less so with the socialist globalization of today.

the government spending that would be needed to stimulate the "Global" economy, would do more harm than good.

If you don't have the manufacturing capability or demand for labour domestically, then any stimulus would need to work it's way through the whole global market, to be of any benefit.

That amount of money printing would ellipse any benefit, through inflation.

How are those commodity prices doing?

We don't have to put up with the global structure. It is just our policy now to let China manipulate their currency and still have "free trade" which just eats at our economy. It is more pervasive than plain old dumping.

Tex
 
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