Thursday, September 08, 2011

Did the 2012 campaign officially kick off tonight?

In general, this was one of President Obama's better performances of late.  I'll get to the details in a second but I thought the speech displayed the sort of passion we need to see from our leaders at a time of great vulnerability.

I will say that some of the rhetoric was over the top "If Americans can by Hyundai's, Koreans should be able to buy Ford's".  Should we qualify that by saying "American Made Ford's" because I saw new yesterday that Ford was breaking ground on a new $1 billion factory in India, but I digress.

•“It is all paid for”

Hmmm, $470 billion is real money.  Didn't we nearly bankrupt the country over less than that?  All of the spending cuts are undefined at this point. 

•Create jobs in construction, for teachers, for veterans, and for long-term unemployed;

Sounds good, but speaking from experience school budgets are relatively fixed items and school schedules are set.  You can't just hire back a teacher in November without any students to teach.

•Cut payroll taxes in half for small business;

Back to my familiar refrain.  As a small business owner, cut my taxes, I'll say thank you and maybe buy a new jet ski, but I'm not hiring until demand picks up.

•Small businesses will get a tax cut for hiring or for pay raises;

See above.

•Businesses can write off investments they make in 2012;

We've done this repeatedly since 2001.  Frankly, I'm amazed any company has any assets on their balance sheets.  Like quantitative easing for the stock market, write-offs have become corporate crack.

•Rebuilding America with infrastructure and a world class transportation system;

I loved the idea of infrastructure rebuilding in 2001.  2 wars, $8 trillion in debt, bank bailouts, etc, have dampened my enthusiasm.  Also, I see what we get for our dollars up close when traveling around the Northeast.  There is one project in NJ - it's a nice upgrade to a major intersection with a new bridge.  It should improve traffic flow dramatically, but it's basically a bridge with 1 new on ramp.  Total cost $1 billion.  China can build a small city for $1 billion.

•Modernize at least 35,000 schools;

Again, this is nice in concept but when you start modernizing schools you start knocking down walls and you'll discover the joy of pricing out an asbestos remediation contractor.
•Companies will get $4K for hiring anyone who has spent 6 months or more looking for a job;

The cynic in me fears that layoffs might grow over the next month.  Layoff 100 workers today, rehire them in 6 months.  Collect $4k for each worker.  Profit!

•Plan extends unemployment insurance for another year;

This further hinders our entry-level workforce.  If we keep extending benefits there is no incentive for people to seek out the many entry-level jobs that are available.

Goldman has come out saying that the deal is slightly larger than expected.  Another firm ran a model that said the package might add 300k jobs (with millions unemployed that seems pretty weak).

Unfortunately, I think this is ultimately going to prove to be little more than a campaign flyer bullet point.  Maybe I'm wrong, but I expect major opposition to emerge from the House.

Cheers!

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