The Real Economy of the Middle Class

[JrChurch]

What represents the middle-class more than construction workers?  According to the Bureau of Labor Statistics Construction Sector website (data from Feb 2012), national construction employment in April 2006 was at 7,726,000 workers.  That is a lot of men and women working to provide for their families. 

How about today?

5,554,000 workers.

Weren't we promised with the American Recovery and Reinvestment Act of 2009 (the $840,000,000,000 Chump Change Act) that the construction industry would be the beneficiary with all those shovel-ready jobs?

Basic math: Government interference in the job market/health care/environment/energy causes prices to inflate and jobs to decrease.  I HOPE for a CHANGE in leadership.

 

[El Cid]

So true, they should just let Capitalism work. 

 

[redgreen5]

[quote author=JrChurch]
Weren't we promised with the American Recovery and Reinvestment Act of 2009 (the $840,000,000,000 Chump Change Act) that the construction industry would be the beneficiary with all those shovel-ready jobs? [/quote]

Time to spoon-feed morons, I see. 

1. The stimulus did not say that $840m would be spent on construction.  Apparently you're gullible or stupid.  Or both.

2. The stimulus did say, however, that some percentage would be used for construction.  The problem is that stimulus targeted at a particular sector of the economy is always going to have limited value; very limited value.  That is because the unemployment rate is the aggregate of all jobs lost in all sectors.  Whereas the targeted stimulus is only going to affect a small handful of job classifications.

3.  The sad fact is that there are not that many shovel ready construction jobs.  If you're a local or state government and you're going to do major construction such as adding an interstate bypass or resurfacing an extra 500 miles of freeway, those jobs aren't sitting around on a shelf, just waiting for money.  They have to be fully spec'ed out, request for bid / request for quotations go out, the response takes time, responses are received and reviewed, questions are asked, revisions to the response are filed, etc.  The planning phase can take years. This isn't like running out and buying a new washing machine at Home Depot. 


However, having said all that:

4. You also don't seem to realize - because FOX isn't going to tell you - how that $840m was spent.  A full 1/3 of it ($289m) was tax cuts.  Another $144m was direct fiscal aid to states that were running out of money.  So of the $840m cost, $432m went back to individuals or local/state governments.
http://en.wikipedia.org/wiki/American_Recovery_and_Reinvestment_Act_of_2009

Still want to repeal it?

Basic math: Government interference in the job market/health care/environment/energy causes prices to inflate and jobs to decrease.

Basic stupidity you mean.  In times of economic downturn, almost every job sector has seen losses.  Considering that housing was the key area that cratered in the Bush recession, it's a wonder that we didn't see *more* losses in that category.

I HOPE for a CHANGE in leadership.

I just hope you finish the 6th grade. 

 

[redgreen5]

So true, they should just let Capitalism work.

That's how we got the global economic meltdown.

Did you enjoy it?

 

[qwerty]

The real winner was the sign maker.  20 million dollars..... http://abcnews.go.com/m/story?id=11163180

 

[truthdetector]

So true, they should just let Capitalism work.

That's how we got the global economic meltdown.

Did you enjoy it?

Commie

 

[rsc2a]

3.  The sad fact is that there are not that many shovel ready construction jobs.  If you're a local or state government and you're going to do major construction such as adding an interstate bypass or resurfacing an extra 500 miles of freeway, those jobs aren't sitting around on a shelf, just waiting for money.  They have to be fully spec'ed out, request for bid / request for quotations go out, the response takes time, responses are received and reviewed, questions are asked, revisions to the response are filed, etc.  The planning phase can take years. This isn't like running out and buying a new washing machine at Home Depot. 

You're only partially correct.

There are plenty of shovel-ready projects that are just waiting for funding. In fact, in many municipalities there are fully spec'd projects sitting on shelves for this reason, the RFP/RFQ process can take less than a month, and the contractor can get a NTP (notice-to-proceed) just a few weeks after that.

In short, with appropriate funding, you could have shovels swinging within a month or two. Even if you had to design them from scratch, many projects could have shovels swinging in six months to a year. With design-build projects, you could have some pretty major projects from concept to ongoing construction in about six months.

Now, all levels of government don't have this type of backlog, but enough of them do where, even if they did dump the entire $800B into construction, it could have been spent in under a year.

 

[JrChurch]

Time to spoon-feed morons, I see. 


I just hope you finish the 6th grade.

I am dazzled by your intellect.

 

[JrChurch]

...national construction employment in April 2006 was at 7,726,000 workers.   

How about today?

5,554,000 workers.

**ding** **ding**  It is Bush's fault.  Uh, no...... make the rich pay their fair share.  Um, no..... **look up in the lib manual**  Oh, right...you Tea Party people are a bunch of racists.

 

[redgreen5]

[quote author=truthdetector]
Commie
[/quote]

LOL
I'm just totally floored by the precision and deep insight of your ......ahem...argument.
Clearly they sent you out as the big guns to defeat me. 
Tremble, tremble.

 

[redgreen5]

[quote author=rsc2a ]
The sad fact is that there are not that many shovel ready construction jobs.  If you're a local or state government and you're going to do major construction such as adding an interstate bypass or resurfacing an extra 500 miles of freeway, those jobs aren't sitting around on a shelf, just waiting for money.  They have to be fully spec'ed out, request for bid / request for quotations go out, the response takes time, responses are received and reviewed, questions are asked, revisions to the response are filed, etc.  The planning phase can take years. This isn't like running out and buying a new washing machine at Home Depot. 

You're only partially correct.

There are plenty of shovel-ready projects that are just waiting for funding. In fact, in many municipalities there are fully spec'd projects sitting on shelves for this reason, the RFP/RFQ process can take less than a month, and the contractor can get a NTP (notice-to-proceed) just a few weeks after that.[/quote]

Incorrect.  There are not "plenty" of such projects.    A good read:
http://www.politico.com/news/stories/0911/64454.html

 

[redgreen5]

The real winner was the sign maker.  20 million dollars..... http://abcnews.go.com/m/story?id=11163180

This is what happens when conservatives try to read something without an adult to supervise them.

You made two rather bone-headed mistakes with your link.

First, the amount in question is $15 million, not $20 milllion. Sloppy reading and bad with details, like most rightwingers.

Second, the link says this:

On the road leading to Dulles Airport outside Washington, DC there's a 10' x 11' road sign touting a runway improvement project funded by the federal stimulus. The project cost nearly $15 million and has created 17 jobs, according to recovery.gov.

It is the runway improvement project that cost $15 million, not creating the 10' x 11' roadsign.

Seriously, dude:
with comprehension problems as bad as yours, I don't see how conservatives like you manage to even dress yourself in the morning.

 

[rsc2a]

What happens is that once a project is fully spec'd, it can only go on the shelf for so long.  After some period of time without being acted upon, the quote is considered to be invalid and needs to be updated. This is because the prices of raw materials, labor, etc. need to be updated and the individual construction contractors need to reconfirm availability of workers, general contractors, particular pieces of equipment that would be needed, etc.  Now usually this can be done by adding an addendum, or issuing a slightly revised quote.  So it doesn't require that construction agencies start from scratch. 

...this one. Whether a shelved fully spec'd out project can be dusted off and used has nothing do to with bids. A project may be shelved after being bid, but all bids are tossed first. Once shelved, the RFP/RFQ process would start over with no need to revise quotes. (And, as I pointed out, you can be opening bids in a month or so.) Any changes would be a result of changes in the field that would impact design.

In short, with appropriate funding, you could have shovels swinging within a month or two. Even if you had to design them from scratch, many projects could have shovels swinging in six months to a year. With design-build projects, you could have some pretty major projects from concept to ongoing construction in about six months.

There are some, of course.  But not as many as you are making it out to be. Here's an interesting op-ed piece that admits to having some shovel ready projects, but realizes the scope was small:
http://www.nytimes.com/2012/02/12/opinion/sunday/how-the-stimulus-fell-short.html?pagewanted=all

Again...you seem to be relying on op-ed pieces and such. And what is funny about this op-ed piece is that it specifically states that there are such projects. Off the top of my head, I can spend a couple billion pretty easily on just projects that I know where they are just awaiting funding. And I'm just one guy.

Now, all levels of government don't have this type of backlog, but enough of them do where, even if they did dump the entire $800B into construction, it could have been spent in under a year.

But you understand that it was never the intention to put all $800B into construction. Correct?

Yes. Which is why I said "even if they did dump the entire $800B into construction". I was pointing out that they could have spend the entire amount on these projects and still been lacking. The fact that the entire amount wasn't earmarked for these projects and they still couldn't spend it tells me it was a bureaucratic problem, not a lack of projects problem.

 

[rsc2a]

The real winner was the sign maker.  20 million dollars..... http://abcnews.go.com/m/story?id=11163180

...Second, the link says this:

On the road leading to Dulles Airport outside Washington, DC there's a 10' x 11' road sign touting a runway improvement project funded by the federal stimulus. The project cost nearly $15 million and has created 17 jobs, according to recovery.gov.

It is the runway improvement project that cost $15 million, not creating the 10' x 11' roadsign.

Yeah, he made some mistakes, but a ridiculous amount of money is being spent on signage on these types of projects.  Especially when you consider what is normally spent. (For the project in question, the answer could very well be "zero".) And a 110 SF road sign advertising a project is definitely atypical.

I'm not going to jump down his throat for nitpicks when his overall point is correct. (If I was going to do that, I would protest the "jobs created" idea.) But I don't feel like bothering.

As an aside, this would be one of those types of projects that would very quickly start to eat up a lot of the stimulus money. Airports have been without a FAA authorization bill for a long time, but they haven't stopped planning and design. Aviation projects are very expensive due to much more highly spec'ed materials and safety concerns driving up the cost of construction. Just sayin'....

 

[redgreen5]

[quote author=rsc2a]
What do you do for a living? [/quote]

Without going into the details, I manage other people providing services for companies.  My responsibilities include RFP/RFQ submission, analysis, vendor certification and legal review, and financial tracking of contracts worth around $2m at the moment.  Standard PMBOK stuff, with an emphasis on the contracts and financials. In the past, I have managed budgets up to $11m with multiple vendors and project types. Those amounts may be small compared to projects involving road construction, building airports, etc. but the contracts that I manage are 100% services, no materials or physical outputs generated.

Because it appears that you are solely relying on newspapers for your information,

By now you should realize that comment is wrong.

What happens is that once a project is fully spec'd, it can only go on the shelf for so long.  After some period of time without being acted upon, the quote is considered to be invalid and needs to be updated. This is because the prices of raw materials, labor, etc. need to be updated and the individual construction contractors need to reconfirm availability of workers, general contractors, particular pieces of equipment that would be needed, etc.  Now usually this can be done by adding an addendum, or issuing a slightly revised quote.  So it doesn't require that construction agencies start from scratch. 

...this one. Whether a shelved fully spec'd out project can be dusted off and used has nothing do to with bids. A project may be shelved after being bid, but all bids are tossed first. Once shelved, the RFP/RFQ process would start over with no need to revise quotes. (And, as I pointed out, you can be opening bids in a month or so.) Any changes would be a result of changes in the field that would impact design.

If the project has been fully spec'ed out, but no bids have been solicited (RFP/RFQ process), then the project is not "shovel ready".  I assumed that we were using the same definition of that term; basically a project is ready to go -- "just add money" and it kicks off.  If you're only talking about the design & specification tasks (and leaving out the RFQ process), then that is our disconnect.

Again...you seem to be relying on op-ed pieces and such. And what is funny about this op-ed piece is that it specifically states that there are such projects. Off the top of my head, I can spend a couple billion pretty easily on just projects that I know where they are just awaiting funding. And I'm just one guy.

1. I rely on such news sources because (a) they're easily verifiable, so no one can accuse me of using hidden information; (b) they're generally accurate; and (c) don't rely on some "special private information" that I might have.  However, I would not have entered this discussion if I did not have experience in the contracts and bidding process as well, to buttress the comments that I have been saying.  But I realize that I cannot appeal to that knowledge, because it's not shared by everyone and -- given the toxic right wing environment of this forum -- most posters wouldn't accept that anyhow.

2. As for what this article says:  you should read more carefully my description of it.  I already admitted what you seem to think was an oversight on my part: Here's an interesting op-ed piece that admits to having some shovel ready projects, but realizes the scope was small:. 

3.  And as a reminder: I also provided the other source (higher up in my post) that describes the problem in finding "shovel ready" projects.  You may think it's just a news article, but that article did quote people such as civil engineers. 

But you understand that it was never the intention to put all $800B into construction. Correct?

Yes. Which is why I said "even if they did dump the entire $800B into construction". I was pointing out that they could have spend the entire amount on these projects and still been lacking. The fact that the entire amount wasn't earmarked for these projects and they still couldn't spend it tells me it was a bureaucratic problem, not a lack of projects problem.

I have no problem admitting that these projects did not create the economic results that many were expecting. But in hindsight, that seems to derive from:
(a) a fundamental misunderstanding of the ability to impact an entire economy by stimulating just one sector;
(b) the local partisan wrangling over these projects; and
(c) people's unrealistic expectations of the speed of bureaucracy

 

[rsc2a]

[quote author=rsc2a]
What do you do for a living?

Without going into the details, I manage other people providing services for companies.  My responsibilities include RFP/RFQ submission, analysis, vendor certification and legal review, and financial tracking of contracts worth around $2m at the moment.  Standard PMBOK stuff, with an emphasis on the contracts and financials. In the past, I have managed budgets up to $11m with multiple vendors and project types. Those amounts may be small compared to projects involving road construction, building airports, etc. but the contracts that I manage are 100% services, no materials or physical outputs generated. [/quote]

And that's why you don't know you are talking about. Construction services are a completely different type of animal when it comes to procurement.

How do I know this? Because I work for a firm that actually does the planning, design, and bidding for road construction and airport projects. In fact, one of the projects we (specifically me) are working on has an estimated construction value of more than half a billion dollars. We have been involved in scores of $10M+ projects in the past two years. I personally have handled everything from initial planning to grant acquisition to design to bidding to construction closeout for millions of dollars worth of construction projects.

Oh yeah...I've also been personally involved in sewer, city infrastructure (ped paths, bikeways, sidewalks, etc), roadway, airport, and a very small amount of design-build healthcare facility work. In addition, we do port work, sanitary sewer, bridges, dams, all types of PM/CM, and vertical construction, including some projects that you would be very familiar with if I were to name them.

...and I'm telling you that you have no idea what you are talking about in regards to this matter.

[quote author=redgreen5]

What happens is that once a project is fully spec'd, it can only go on the shelf for so long.  After some period of time without being acted upon, the quote is considered to be invalid and needs to be updated. This is because the prices of raw materials, labor, etc. need to be updated and the individual construction contractors need to reconfirm availability of workers, general contractors, particular pieces of equipment that would be needed, etc.  Now usually this can be done by adding an addendum, or issuing a slightly revised quote.  So it doesn't require that construction agencies start from scratch. 

...this one. Whether a shelved fully spec'd out project can be dusted off and used has nothing do to with bids. A project may be shelved after being bid, but all bids are tossed first. Once shelved, the RFP/RFQ process would start over with no need to revise quotes. (And, as I pointed out, you can be opening bids in a month or so.) Any changes would be a result of changes in the field that would impact design.

If the project has been fully spec'ed out, but no bids have been solicited (RFP/RFQ process), then the project is not "shovel ready".  I assumed that we were using the same definition of that term; basically a project is ready to go -- "just add money" and it kicks off.  If you're only talking about the design & specification tasks (and leaving out the RFQ process), then that is our disconnect.[/quote]

So either your initial statement or this statement is wrong. Once bids are solicited, the project cannot be shelved without rejecting all the bids. There would be no outstanding quotes. (That makes your first statement wrong.) And, yes, "shovel-ready" would not include the RFQ process. What kind of idiot body of government would send out a RFP/RFQ if they didn't think they at least had the funding necessary to cover what the estimated costs was?

In other words, the RFP/RFQ process starts after the "just add money" phase.

[quote author=redgreen5]However, I would not have entered this discussion if I did not have experience in the contracts and bidding process as well, to buttress the comments that I have been saying.[/quote]

But you really haven't provided the accurate information necessary to back up your arguments.

[quote author=redgreen5]But I realize that I cannot appeal to that knowledge, because it's not shared by everyone and -- given the toxic right wing environment of this forum -- most posters wouldn't accept that anyhow.[/quote]

Ad Hom....

...and I don't accept it because of some ideological position but because I actually work in this field and know the facts.

[quote author=redgreen5]You may think it's just a news article, but that article did quote people such as civil engineers. [/quote]

9 in 10 dentists prefer Crest Toothpaste over Colgate.  :

[quote author=redgreen5](a) a fundamental misunderstanding of the ability to impact an entire economy by stimulating just one sector...[/quote]

Whose misunderstanding would that be? (Hint: the guys saying unemployment wouldn't go over 8%.)

[quote author=redgreen5]...(b) the local partisan wrangling over these projects...[/quote]

Fallacious argument.

There was local partisan wrangling over these types of projects prior to the stimulus being passed.

[quote author=redgreen5]...and (c) people's unrealistic expectations of the speed of bureaucracy[/quote]

Again....whose unrealistic expectations? (See hint above.)

 

[redgreen5]

And that's why you don't know you are talking about. Construction services are a completely different type of animal when it comes to procurement.

How do I know this? Because I work for a firm that actually does the planning, design, and bidding for road construction and airport projects. In fact, one of the projects we (specifically me) are working on has an estimated construction value of more than half a billion dollars. We have been involved in scores of $10M+ projects in the past two years. I personally have handled everything from initial planning to grant acquisition to design to bidding to construction closeout for millions of dollars worth of construction projects.

Oh yeah...I've also been personally involved in sewer, city infrastructure (ped paths, bikeways, sidewalks, etc), roadway, airport, and a very small amount of design-build healthcare facility work. In addition, we do port work, sanitary sewer, bridges, dams, all types of PM/CM, and vertical construction, including some projects that you would be very familiar with if I were to name them.

...and I'm telling you that you have no idea what you are talking about in regards to this matter.

*sigh*

Let's get one thing straight here:  I've been doing my line of work for over 18 years for four major companies in my region of the country, as well as a major engineering firm in the New England region.  I guarantee you that I do know what I'm talking about.  There may be a difference in how civil engineering projects are managed vs. technical skills and support contracts (my area of expertise), but the steps I describe are valid for the work that I do.

It may also be a different process for dealing with govt entities vs. private corporations. Some of the work I do is done on behalf of federal/state/county govt, as well as various departments inside the government (Dept of Defense, for example). I have never been asked to change the specification process or the RFP/RFQ process merely because the customer was a governmental entity instead of a private corporation.

In other words, the RFP/RFQ process starts after the "just add money" phase.

No, it does not.  Not in my line of work. In fact, part of the process includes at a MINIMUM, a pro-forma bid.  If someone in my group went to management with a proposal for a 9 month project involving 30 people, for three countries and impacting six product lines, and they did not include a costing for the project, they would probably be escorted to the front door and given severance for their incompetence.  You simply don't propose something to management without being able to answer the hard questions around budget, competitive bids, compare/contrast the strengths/weaknesses of the responses to the RFQs, etc.  It's just not done.

9 in 10 dentists prefer Crest Toothpaste over Colgate. 

Or perhaps the people that I quoted have a more comprehensive view of shovel ready projects across an entire economy, as opposed to the more localized view that you have of your daily work and the current projects you are involved in.

Whose misunderstanding would that be? (Hint: the guys saying unemployment wouldn't go over 8%.)

Try not to repeat already debunked rightwing urban legends:

http://www.politifact.com/truth-o-meter/statements/2009/jul/09/eric-cantor/Cantor-and-other-republicans-say-obama-promised-s/

The debate about the numbers comes from the inherent uncertainty in economic forecasting. How can you ever prove that if the unemployment rate gets to X percent, it would or would not have gotten a point or two higher if not for the stimulus? The same holds true for Republicans who say the rising unemployment rates prove the stimulus isn't working. Again, it's difficult to empirically prove whether they're right or wrong.

We're certainly not going to try here. What we can rule on, however, is whether the Obama administration "promised" that unemployment rates would not rise above 8 percent if the stimulus were passed. We could find no instance of anyone in the administration directly making such a public pledge.

What we saw from the administration in January was a projection, not a promise. And it was a projection that came with heavy disclaimers.

"It should be understood that all of the estimates presented in this memo are subject to significant margins of error," the report states. "There is the more fundamental uncertainty that comes with any estimate of the effects of a program. Our estimates of economic relationships and rules of thumb are derived from historical experience and so will not apply exactly in any given episode. Furthermore, the uncertainty is surely higher than normal now because the current recession is unusual both in its fundamental causes and its severity."

There's also a footnote that goes along with the chart that states: "Forecasts of the unemployment rate without the recovery plan vary substantially. Some private forecasters anticipate unemployment rates as high as 11% in the absence of action."

That sure doesn't sound like a full-fledged promise to us.

Now, moving along......

Fallacious argument.

There was local partisan wrangling over these types of projects prior to the stimulus being passed.

And did that previous partisan wrangling ever slow down any projects?  Or are you trying to tell me that partisan wrangling has no effect on the timetable for kickoff and completion?

Again....whose unrealistic expectations? (See hint above.)

The unrealistic expectations are for anyone who thought this was show immediate upticks in the economy.  That includes ordinary people, politicians, business folk, and several other categories of people. We are not a "shovel ready" economy. We are an information services economy, and it is ridiculous to assume that forward thinking is only investing in infrastructure and construction projects.

 

[rsc2a]

[quote author=redgreen5]Let's get one thing straight here:  I've been doing my line of work for over 18 years for four major companies in my region of the country, as well as a major engineering firm in the New England region.  I guarantee you that I do know what I'm talking about.  There may be a difference in how civil engineering projects are managed vs. technical skills and support contracts (my area of expertise), but the steps I describe are valid for the work that I do.[/quote]

What kind of projects were they talking about when they said "shovel-ready"? Civil engineering projects! And their process is just like I described them.

[quote author=redgreen5]It may also be a different process for dealing with govt entities vs. private corporations. Some of the work I do is done on behalf of federal/state/county govt, as well as various departments inside the government (Dept of Defense, for example). I have never been asked to change the specification process or the RFP/RFQ process merely because the customer was a governmental entity instead of a private corporation.[/quote]

Most of our specs are government specs, even for private jobs.

[quote author=redgreen5]

In other words, the RFP/RFQ process starts after the "just add money" phase.

No, it does not.  Not in my line of work.[/quote]

And since I work in the civil engineering sector...

[quote author=redgreen5]In fact, part of the process includes at a MINIMUM, a pro-forma bid.  If someone in my group went to management with a proposal for a 9 month project involving 30 people, for three countries and impacting six product lines, and they did not include a costing for the project, they would probably be escorted to the front door and given severance for their incompetence. [/quote]

Yes...these are known are preliminary construction estimates. 

[quote author=redgreen5]You simply don't propose something to management without being able to answer the hard questions around budget, competitive bids, compare/contrast the strengths/weaknesses of the responses to the RFQs, etc.  It's just not done.[/quote]

All something that takes place after bids are received...something that occurs after getting funding.

[quote author=redgreen5]

9 in 10 dentists prefer Crest Toothpaste over Colgate. 

Or perhaps the people that I quoted have a more comprehensive view of shovel ready projects across an entire economy, as opposed to the more localized view that you have of your daily work and the current projects you are involved in.[/quote]

You mean the projects I'm involved in crossing at least three major fields of civil engineering and multiple states in various regions of the country, not including various US territories and several foreign countries on multiple continents? These construction projects that touch countless other industries as they are implemented?

[quote author=redgreen5]

Whose misunderstanding would that be? (Hint: the guys saying unemployment wouldn't go over 8%.)

Try not to repeat already debunked rightwing urban legends:

http://www.politifact.com/truth-o-meter/statements/2009/jul/09/eric-cantor/Cantor-and-other-republicans-say-obama-promised-s/

The debate about the numbers comes from the inherent uncertainty in economic forecasting. How can you ever prove that if the unemployment rate gets to X percent, it would or would not have gotten a point or two higher if not for the stimulus? The same holds true for Republicans who say the rising unemployment rates prove the stimulus isn't working. Again, it's difficult to empirically prove whether they're right or wrong.

We're certainly not going to try here. What we can rule on, however, is whether the Obama administration "promised" that unemployment rates would not rise above 8 percent if the stimulus were passed. We could find no instance of anyone in the administration directly making such a public pledge.

What we saw from the administration in January was a projection, not a promise. And it was a projection that came with heavy disclaimers.

"It should be understood that all of the estimates presented in this memo are subject to significant margins of error," the report states. "There is the more fundamental uncertainty that comes with any estimate of the effects of a program. Our estimates of economic relationships and rules of thumb are derived from historical experience and so will not apply exactly in any given episode. Furthermore, the uncertainty is surely higher than normal now because the current recession is unusual both in its fundamental causes and its severity."

There's also a footnote that goes along with the chart that states: "Forecasts of the unemployment rate without the recovery plan vary substantially. Some private forecasters anticipate unemployment rates as high as 11% in the absence of action."

That sure doesn't sound like a full-fledged promise to us.[/quote]

I didn't use the word "promise". I said "the guys saying unemployment wouldn't go over 8%". In fact, this article in Time (we know how right-wing Time is  :) points out that...

In reality, the unemployment rate is a full percentage point higher [with the stimulus] than what Romer and Bernstein predicted it would be without a stimulus.


[quote author=redgreen5]

Fallacious argument.

There was local partisan wrangling over these types of projects prior to the stimulus being passed.

And did that previous partisan wrangling ever slow down any projects?  Or are you trying to tell me that partisan wrangling has no effect on the timetable for kickoff and completion?[/quote]

Sure, it happened. Which means the guys who made the claims (regarding 8% unemployment) should have known it was going to happen and accounted for it in their modelling. It's not like this was a bit surprise and all your rebuttal did was further prove my point.

[quote author=redgreen5]

Again....whose unrealistic expectations? (See hint above.)

The unrealistic expectations are for anyone who thought this was show immediate upticks in the economy.  That includes ordinary people, politicians, business folk, and several other categories of people. We are not a "shovel ready" economy. We are an information services economy, and it is ridiculous to assume that forward thinking is only investing in infrastructure and construction projects.[/quote]

So you're saying the economic advisors to the President and the Administration were inept when it came to their projections and handling of the stimulus plan?

A simple "yes" will do.

 

[redgreen5]

[quote author=rsc2a]
What kind of projects were they talking about when they said "shovel-ready"? Civil engineering projects! And their process is just like I described them.[/quote]

So let me ask you something:  is a 10,000 computer system upgrade for a major school system not included in such projects? 
How about an expansion of a VA hospital wing?

Maybe you need to step back and broaden your point of view a little bit. "Shovel ready" is a euphemism for all kinds of projects; not merely construction projects.  The emphasis is on "start the project now", and not really upon the kind of work involved.  Now to be clear: the choice of phrase calls to mind construction projects, to be sure.  But nowhere in the stimulus spending bill was it restricted to only construction.

And since I work in the civil engineering sector...

And since civil engineering isn't the only sector covered by "shovel ready"......

All something that takes place after bids are received...something that occurs after getting funding.

No.  Absolutely no such rule. The companies that I work for are significant enough and prestigious enough that vendors are perfectly willing to submit full bids even in the exploratory phase.  In fact, they often *prefer* to submit them like this, knowing that the variance between the preliminary bids and the final bids cannot exceed certain boundaries, or else the bid will be looked upon with suspicion (lowballed to get their foot in the door, then raised drastically afterwards).  Given that reality, they opt to do all the hard work of bidding and estimation first, and then submit minor corrections after funding is approved.   

Or perhaps the people that I quoted have a more comprehensive view of shovel ready projects across an entire economy, as opposed to the more localized view that you have of your daily work and the current projects you are involved in.

You mean the projects I'm involved in crossing at least three major fields of civil engineering and multiple states in various regions of the country, not including various US territories and several foreign countries on multiple continents? These construction projects that touch countless other industries as they are implemented?

I mean that someone who represents an entire professional fraternity of civil engineers is likely to know more about the state of civil engineering projects across an entire economy, than one individual civil engineer would know.

I mean that someone who studies civil engineering projects professionally -- over a large portion of the country, and how they relate to public policy -- would be in a position to offer a far broader opinion on the number and magnitude of such projects, than one individual civil engineer would.

I didn't use the word "promise". I said "the guys saying unemployment wouldn't go over 8%".

Nice try.  But don't try to quibble about "promise".  You are trying to make it sound as if someone had issued a point-blank statement that something would not happen. The actual record of events shows something far different.

In fact, this article in Time (we know how right-wing Time is  :) points out that...

In reality, the unemployment rate is a full percentage point higher [with the stimulus] than what Romer and Bernstein predicted it would be without a stimulus.

Unlike you, I've actually read what Rohmer and Bernstein wrote. The TIME news reporter got it wrong.  TIME may not be very biased, but it's also rather shallow in how it reports things.
http://otrans.3cdn.net/45593e8ecbd339d074_l3m6bt1te.pdf

1 Forecasts of the unemployment rate without the recovery plan vary substantially. Some private forecasters anticipate
unemployment rates as high as 11% in the absence of action.

2 These estimates, like the aggregate ones, are subject to substantial margins of error. One additional source of
uncertainty concerns the impact of the state fiscal relief. We believe that the rule of thumb that 60% of funds devoted
to state relief will be used to prevent spending cuts and that 30% will be used to prevent tax increases, and that these
effects will occur with a lag of about three months, are good first approximations. But, the effects will clearly differ
across states, and the average could differ from what we have assumed. Another source of uncertainty concerns the jobs
effects of a given increase in GDP. Again, we think that our assumption that the relation between higher GDP and
increased employment is the same across the different components of the package is a good starting point. But, the
exact effects are likely to vary somewhat across components. For example, simulations using private-sector forecasting
models suggest that the number of jobs created by a given increase in GDP is likely to be slightly higher for broad-based
tax cuts than for infrastructure spending, presumably because the jobs created by infrastructure spending pay higher
wages on average. This effect is small, however, and does not reverse the conclusion that a dollar of infrastructure
spending is more effective in creating jobs than a dollar of tax cuts.

Let's have that first point once again:
1 Forecasts of the unemployment rate without the recovery plan vary substantially. Some private forecasters anticipate
unemployment rates as high as 11% in the absence of action.

One more time, for the economic literacy-impaired:
1 Forecasts of the unemployment rate without the recovery plan vary substantially. Some private forecasters anticipate
unemployment rates as high as 11% in the absence of action.

Three times is the charm:
1 Forecasts of the unemployment rate without the recovery plan vary substantially. Some private forecasters anticipate
unemployment rates as high as 11% in the absence of action.

And did that previous partisan wrangling ever slow down any projects?  Or are you trying to tell me that partisan wrangling has no effect on the timetable for kickoff and completion?

Sure, it happened.

Which means your claim that my argument was fallacious was an unjust claim.  I already knew that; nice to hear you admit it.

Which means the guys who made the claims (regarding 8% unemployment) should have known it was going to happen and accounted for it in their modelling.

1. Not really. They are economists, not fortune-tellers. Nobody can predict the amount or degree of partisan wrangling, and how often / what parts of the country that it will have the most effect on stalling the kickoff of projects.

You are grasping very hard at some rather flimsy straws now.

It's not like this was a bit surprise and all your rebuttal did was further prove my point.

My rebuttal demonstrated that your claim of fallaciousness was wrong.  Furthermore, you seem to confuse what the role of an economic prediction is, and the basis upon which such predictions are made.

So you're saying the economic advisors to the President and the Administration were inept when it came to their projections and handling of the stimulus plan?

A simple "yes" will do.

Only if you're a total raving idiot, will "yes" do.    :

All economic projections - whether for private companies in their 10-K statements or quarterly messages to investors, or for countries, issuing economic forecasts - they all come with caveats and provisos.  Is this really news to you?  Do you require some examples?

These advisors carefully bounded their projections with detailed caveats.  It isn't their fault - or the President's fault - if certain people find it convenient to ignore those caveats for their political purposes and gains. 

It should also be pointed out that the full scope of the economic damage from the Bush recession was not known at the time their report was published.  We had not even reached the full measure of the layoffs and employment crisis at that time. It would be almost a full year before the country knew the full measure and scope of the financial meltdown, and could put together a reasonable estimation of how long the recovery would take. But people and businesses have short tempers and no patience:  it is important to be doing something *now*, even if you're not 100% sure that you have all the data yet.  (In fact, this same principle shows up in unemployment forecasting - which is why unemployment numbers for previous months are often updated as time goes on).

See here from June 2009:
http://www.nytimes.com/2009/06/09/us/politics/09obama.html

Mr. Bernstein, addressing reporters on Monday at a contentious White House briefing, conceded that his forecast had been

 

[rsc2a]

[quote author=rsc2a]
What kind of projects were they talking about when they said "shovel-ready"? Civil engineering projects! And their process is just like I described them.

So let me ask you something:  is a 10,000 computer system upgrade for a major school system not included in such projects? 
How about an expansion of a VA hospital wing?[/quote]

Umm...do you not know that expanding VA hospital wings would fall under civil engineering projects?

<whisper>We do those too.</whisper>

[quote author=redgreen5]Maybe you need to step back and broaden your point of view a little bit. "Shovel ready" is a euphemism for all kinds of projects; not merely construction projects.  The emphasis is on "start the project now", and not really upon the kind of work involved.  Now to be clear: the choice of phrase calls to mind construction projects, to be sure.  But nowhere in the stimulus spending bill was it restricted to only construction.[/quote]

With $131 billion allocated for construction-related spending in the stimulus package, all 50 states are receiving significant funds for everything from highways to energy projects to environmental cleanups to making government buildings more energy efficient. - McGraw Hill

And, in case you are wondering, the biggest categories spending wise were tax cuts, health care initiatives, education spending, individual assistance (i.e. "welfare"), and infrastructure spending. Which of those are purely "stimulus", hmm?

[quote author=redgreen5]

And since I work in the civil engineering sector...

And since civil engineering isn't the only sector covered by "shovel ready"......[/quote]

The facts are not your friends in this case.

[quote author=redgreen5]

All something that takes place after bids are received...something that occurs after getting funding.

No.  Absolutely no such rule. The companies that I work for are significant enough and prestigious enough that vendors are perfectly willing to submit full bids even in the exploratory phase.  In fact, they often *prefer* to submit them like this, knowing that the variance between the preliminary bids and the final bids cannot exceed certain boundaries, or else the bid will be looked upon with suspicion (lowballed to get their foot in the door, then raised drastically afterwards).  Given that reality, they opt to do all the hard work of bidding and estimation first, and then submit minor corrections after funding is approved.[/quote]

Too bad you aren't familiar with construction projects, particularly government-driven ones. Your errors would be obvious to you.


[quote author=redgreen5]

Or perhaps the people that I quoted have a more comprehensive view of shovel ready projects across an entire economy, as opposed to the more localized view that you have of your daily work and the current projects you are involved in.

You mean the projects I'm involved in crossing at least three major fields of civil engineering and multiple states in various regions of the country, not including various US territories and several foreign countries on multiple continents? These construction projects that touch countless other industries as they are implemented?

I mean that someone who represents an entire professional fraternity of civil engineers is likely to know more about the state of civil engineering projects across an entire economy, than one individual civil engineer would know.

I mean that someone who studies civil engineering projects professionally -- over a large portion of the country, and how they relate to public policy -- would be in a position to offer a far broader opinion on the number and magnitude of such projects, than one individual civil engineer would.[/quote]

Again...9 in 10 dentists prefer Crest toothpaste.


[quote author=redgreen5]

I didn't use the word "promise". I said "the guys saying unemployment wouldn't go over 8%".

Nice try.  But don't try to quibble about "promise".  You are trying to make it sound as if someone had issued a point-blank statement that something would not happen. The actual record of events shows something far different.[/quote]

No...what the ones pushing for the spending did use the projection for was a selling point for the stimulus...over and over and over again. Of course, truth-in-advertising has never applied to politics. No one is surprised in this case either.

[quote author=redgreen5]Unlike you, I've actually read what Rohmer and Bernstein wrote.[/quote]

Ad hom. And wrong...keep playing.

[quote author=redgreen5]The TIME news reporter got it wrong.  TIME may not be very biased....[/quote]

LOL!

[quote author=redgreen5]

1 Forecasts of the unemployment rate without the recovery plan vary substantially. Some private forecasters anticipate
unemployment rates as high as 11% in the absence of action.

2 These estimates, like the aggregate ones, are subject to substantial margins of error. One additional source of
uncertainty concerns the impact of the state fiscal relief. We believe that the rule of thumb that 60% of funds devoted
to state relief will be used to prevent spending cuts and that 30% will be used to prevent tax increases, and that these
effects will occur with a lag of about three months, are good first approximations. But, the effects will clearly differ
across states, and the average could differ from what we have assumed. Another source of uncertainty concerns the jobs
effects of a given increase in GDP. Again, we think that our assumption that the relation between higher GDP and
increased employment is the same across the different components of the package is a good starting point. But, the
exact effects are likely to vary somewhat across components. For example, simulations using private-sector forecasting
models suggest that the number of jobs created by a given increase in GDP is likely to be slightly higher for broad-based
tax cuts than for infrastructure spending, presumably because the jobs created by infrastructure spending pay higher
wages on average. This effect is small, however, and does not reverse the conclusion that a dollar of infrastructure
spending is more effective in creating jobs than a dollar of tax cuts.

[/quote]

You know what would happen if my estimates were off by nearly 100%? I'd probably be fired or declared incompetent at my job.

[quote author=redgreen5]Three times is the charm:
1 Forecasts of the unemployment rate without the recovery plan vary substantially. Some private forecasters anticipate unemployment rates as high as 11% in the absence of action.[/quote]

See that word there? That word is "some". It's meaningless. For all we know, "some" is two.

[quote author=redgreen5]

And did that previous partisan wrangling ever slow down any projects?  Or are you trying to tell me that partisan wrangling has no effect on the timetable for kickoff and completion?

Sure, it happened.

Which means your claim that my argument was fallacious was an unjust claim.  I already knew that; nice to hear you admit it.

Which means the guys who made the claims (regarding 8% unemployment) should have known it was going to happen and accounted for it in their modelling.

1. Not really. They are economists, not fortune-tellers. Nobody can predict the amount or degree of partisan wrangling, and how often / what parts of the country that it will have the most effect on stalling the kickoff of projects.

You are grasping very hard at some rather flimsy straws now.[/quote]

Really...try to follow along...you said partisan wrangling was part of why the guys missed the 8% mark so badly. It doesn't take a fortune teller to know that partisan wrangling will occur and a lot of it at that. I thought you followed politics.

[quote author=redgreen5]

It's not like this was a bit surprise and all your rebuttal did was further prove my point.

My rebuttal demonstrated that your claim of fallaciousness was wrong.  Furthermore, you seem to confuse what the role of an economic prediction is, and the basis upon which such predictions are made.[/quote]

I'm sorry....I was just replying to your points regarding why they were wrong.

[quote author=redgreen5]

So you're saying the economic advisors to the President and the Administration were inept when it came to their projections and handling of the stimulus plan?

A simple "yes" will do.

Only if you're a total raving idiot, will "yes" do.    :

All economic projections - whether for private companies in their 10-K statements or quarterly messages to investors, or for countries, issuing economic forecasts - they all come with caveats and provisos.  Is this really news to you?  Do you require some examples?

These advisors carefully bounded their projections with detailed caveats.  It isn't their fault - or the President's fault - if certain people find it convenient to ignore those caveats for their political purposes and gains. [/quote]

How often do you see non-governmental economic projections that are off by 100%? (And I'm not talking about some high-risk "get rich quick" projection.)

[quote author=redgreen5]It should also be pointed out that the full scope of the economic damage from the Bush recession was not known at the time their report was published...

Here's one more item for you:  the fact that Rohmer/Bernstein were up front about all this - and the fact that they admitted their estimate was off, due to lacking Q4 data -- well, that puts them light years ahead of the Bush adminstration, which routinely tinkered with the economic data. Moreover, when the economic data was embarrassing, the Bushies simply refused to release it. [/quote]

Ahh....it's Bush's fault.  :

That just tells me you are a partisan hack, but I can't really express shock there.