Canthook

If you go to Thomas, you can check on the status of bills that have been introduced into the House and the Senate. So far, there aren't a whole lot of bills, and the one the pundits are all talking about has a prominent link, so that you don't have to search very hard for it.

I'm speaking, of course, of HR 1, the "American Recovery and Reinvestment Act of 2009".

Stuffed Full Of Pork

You may have heard that various Representatives stuffed the bill full of pork once it was introduced. That doesn't appear to be the case. As introduced, it was 819160 bytes. As engrossed (passed, and sent to the Senate), it's 859,585 bytes. That's only a 5% increase in wordage. I've looked at a lot of controversial bills over the past decade, and it's not uncommon for amendments to double or triple the word count of a bill.

The amendments?

• A001 - Mr. Oberstar - use it or lose it on transport funds (commit 50% within 90 days)
• A002 - Mr. Markey - use open Internet standards where available and appropriate
• A003 - Mr. Shuster - transport funds can't be used to replace existing funds
• A004 - Mr. Nadler - $3 billion for DC transit system
• A005 - Mr. Neugebauer - strike all appropriations from bill - FAILED 302-134
• A006 - Ms. Waters - jobs training funds may be used for broadband deployment
• A007 - Mr. Flake - strike funding for Amtrak- FAILED 320-116
• A008 - Mr. Kissell - buy 100,000 uniforms for Homeland Security from US manufacturer
• A009 - Mr. Platts - enhance protection for whistleblowers
• A010 - Mr. Teague - require better reporting on recovery.gov website
• A011 - Mr. Camp - add tax cuts - FAILED 266-170

It doesn't look to me that there was much pork added along the way.

So Does It Stimulate?

The bill appropriates funds for job preservation and creation, infrastructure investment, energy efficiency and science, assistance to the unemployed, and for state and local fiscal stabilization. No, not all the money is going to stimulate economic growth. A majority goes for other purposes.

Is It A Bad Bill?

The charge has been made that the democrats in the house have saved up a bunch of pet projects and passed a whole bushel of them, claiming that they were intended to save the economy, when they're not. That doesn't appear to be the case.

Unemployment compensation doesn't stimulate the economy, but it's necessary when the economy crashes. Similarly, "state and local fiscal stabilization" doesn't stimulate the economy, but when the economy flounders, they cannot easily divert funds that have been committed to providing critical services like putting out fires, and fighting crime.

Providing energy efficiency and infrastructure investment stimulates the economy. So does science, although that's not quite as obvious. Younger citizens don't realize how many consumer products were made possible in the 1960s when NASA put a man on the moon. We now get hundreds of networks on our televisions, instead of 3. Car phones used to cost $10/hour to use - and that's when $10 was worth something; many businesses exist today that couldn't exist if there had to be someone in the office answering calls, instead of the businessman answering his own calls on a cellphone. Everything is cheaper these days because GPS makes shipping much cheaper.

But Is It What We Need?

Possibly.

The south went through a very difficult transition in the late 1860s and in the 1870s, as they transitioned from a slave-based economy to an economy without slaves. We are in the middle of a transition from a wage-slave economy to an economy of self-employed individuals.

Does Obama realize that? Does this politician from Illinois, one who seems to emulate Lincoln, even to the point of appointing a cabinet of rivals and taking the oath on the same bible used by Lincoln, intend to free wage-slaves, much as Lincoln freed the slaves? I'm starting to think so.

Maybe He Has Something Else In Mind

Why? Because Obama has been brilliant on so many other subjects, and he appears to be acting incredibly stupid if the goal is to restore the 1950s, where people with button-down minds, working for huge corporations, ruled the roost. On the other hand, if he's facing the reality that we can't go back there, and he has a clear vision of what the future looks like, and he's trying to lead us to the promised land, this isn't a bad first step.

The thing that stimulates the economy most? It's pain. If your finances are hurting, you do whatever it takes to care for your family. If you can't get someone to hire you, you look at ways you can hire yourself. You look at ways to cut costs. It's been pain like this that has made so many Pacific Rim countries economic powerhouses.

Big Companies Are Dinosaurs

Conservatives have pointed out for years the evils of big government. It's not responsive. The same is true of big corporations. Bethlehem Steel and Wisconsin Steel no longer exist. USSteel is struggling. Nucor, though, has shown incredible growth in the past few decades by building mini-mills to produce steel.

In the orient, people put together companies overnight when they spot a need. They can do that because there are so many unemployed and underemployed workers - which is something that we're rapidly increasing our supply of.

Services Economies Easily Shrink

When times get tough, people cancel their lawn care services, and they do without their private chef. Much of our economy has not been producing goods and services which are exported out of the region, but are more on the order of neighbors painting each others' garages, or watching each others' kids.

If you're watching my kids while I bake bread for you, there's a lot of economic activity going on, but not much measurable wealth creation. Yes, I'd rather bake bread. Yes, you'd rather play with kids. We're both better off - but if we do it voluntarily, without compensation, the economy shrinks on paper with no real change.

Anti-Trust Is A Friend To Business, Not An Enemy

Over the past few decades, we've seen banks merge to form mega-banks. Does it make sense? Well, they'll tell you that big banks have the resources to meet the borrowing needs of big corporations, but so do small banks, if they work together. The internet makes it much easier to do that working together. At the same time, small banks have historically been more profitable. A small bank will make loans that big banks won't, because they know their customers. At the same time, small banks have much lower losses on loans. The only one who benefits from bank mergers is the bank president - because presidents of big banks get paid more than presidents of small banks.

Similarly, it doesn't make sense for General Motors to exist. They recognize this. That's why they have spun off so many of their parts businesses. They are more competitive if they buy from suppliers who compete for their business, than when they settle for what their own subsidiary is capable fo producing.

Moving A Step Along

A step further along would be to turn each factory into an independent corporation. Why should a car dealer buy all his merchandise from a single supplier? You certainly don't see office supply stores that sell only one company's products. If Staples can sell Pilot pens, and Bic pens, and Papermate pens, and Berol pens, all alongside each other, why can't a single car dealer sell Dodge minivans, Ford pickups, Corvettes, and Lincoln Navigators? Why can't the factory that produces Firebird and Camaro be an independent company, buying from companies that manufacture bumpers, engines, transmissions, and bucket seats?

And if you are an engineer, why is it necessary for you to work for GM? You could design a carburetor, and license the design to Joe's company. His employees would assemble it from parts made by Tom's company, Dick's company, and Henry's company. Each of those companies would, in turn, use tooling produced by a tool and die shop.

Telecommuting Is A Bust

Telecommuting has been a bust, because if you're going to hire someone by the week or the year, you want to see them every day so you know you're not being cheated. On the other hand, the "virtual corporation" has been a big success. With a virtual corporation, you don't have employees, you buy goods and services from contractors.

Which is another way of saying that telecommuting does work, as long as people are responsible for their own behavior. And we really need telecommuting as a nation. Eliminate all those people driving to work every day, and you dramatically improve their effective wages. Producing cars that get 50 miles per gallon is a drop in the bucket compared to the savings we get from not driving at all. Not only does it save the cost of gasoline, and lower the cost of insurance and replacing cars, but it saves a fortune in building highways, and improves the nation's air.

Is Obama This Smart?

I don't know. He certainly seems to be considerably more intelligent than we expect politicians to be. But if this is where he wants us to go, he dare not tell us that, for virtually everyone is going to squeal. It's not going to be painless to get there from here. Indeed, pain is critically important to the process. And the people with power are people who are going to lose power when the new economy evolves.

The American Recovery and Investment Act, though, seems to be pushing us down that road. It provides some cushions, allowing a little softer landing for those who are falling out of bed. And it's building some infrastructure that we need to turn this country from a nation of wage slaves into a nation of free and independent men.

They say that when Lincoln freed the slaves, many were reluctant to leave the plantation. It's uncomfortable leaving the life you know, for a life of dangers you don't know how to deal with. We all need to cross our fingers, because the only thing worse than Mr. Obama foreseeing these changes and helping us guide our way through them, would be if he doesn't.

Other Bloggers On Related Topics:
amendments - American Recovery and Reinvestment Act - antitrust - freeing the slaves - independent businesses - pork - service economy - stimulus - telecommuting - virtual corporations - wage slaves