PrintSeptember 6, 2009
Other People's Money
It was a sublime March morning in Minnesota. The newly serving Vice President, flanked by no less than four cabinet secretaries and serving U.S. senator, basked in the success of the recently passed Stimulus bill. As evidence of big-government’s triumph, Joe Biden held a town hall meeting at the New Flyer of American Bus Company, a corporation that builds low-emission buses.
In publicizing the town hall event, whitehouse.gov boasted:
The New Flyer of America plant in St. Cloud has hired more than 90 people in 2008, rounding out its unionized workforce of 650 employees, who are working around the clock to fulfill a two-year backlog of orders. The success of the St. Cloud plant is a model for creating jobs in America – the kind of economic growth the Recovery Act aims to spur.But, like that mystery-shopper job with a six figure salary you read about in a recent spam email, it was too good to be true.
The New York Times recently reported that the Stimulus utopia was a dream, and New Flyer has woken up:
Last month, the company that administration officials had pictured as a stimulus success story began laying off 320 people, or 13 percent of its work force, having discovered how cutbacks at the state level can dampen the boost provided by the federal stimulus money. The Chicago Transit Authority did use some of its stimulus money to buy 58 new hybrid buses from New Flyer. But Chicago had to shelve plans to order another 140 buses from them after the state money that it had hoped to use to pay for them failed to materialize. The delayed order scrambled New Flyer’s production schedule for the rest of the year, and led to the layoffs.
The Times piece goes on to lament that cut backs made by state governments are undermining Obama’s big-spending economic plans. If only the states didn’t slow spending, the plan would work.
The history of centrally planned economics is littered with the phrase “if only.” Nearly three Decades ago, the great Margaret Thatcher said that “socialist governments traditionally … make a financial mess. They always run out of other people's money.” A truth New Flyer and rest of America are seeing all too clearly.
Hat Tip: Larrey Anderson
