Post-Panamax Upgrades Require Baltimore-Area Bridge Closures Today

Drivers in the Baltimore area will face traffic jams due to several temporary bridge closures this afternoon that come just as the region faces the first heat wave of the season.

The bridges, including the Chesapeake Bay Bridge and the Key Bridge, and are being temporarily closed because the Port of Baltimore is set to receive a ship carrying four cranes necessary to upgrade port facilities to handle the next generation of super Panamax ships. The closures are meant to prevent accidents due to rubber necking and gawking at the sight of these massive cranes passing within feet of the bridge deck.



The Port of Baltimore crane upgrade is a scene being repeated at ports around the nation. In order to handle the expected opening of the expanded Panama Canal, ports are rushing to upgrade their facilities.

For the New York City metro area, that means expediting the raising of the Bayonne Bridge. Ports that don't carry out necessary upgrades will likely lose business to those ports that are ready to receive the larger ships.

It's a business decision, but it has tremendous economic impacts on regions.

For instance, if the Port Authority of New York and New Jersey can't get the Bayonne Bridge raised in time, shipping companies may look to Baltimore or Norfolk, Virginia as alternatives, meaning lost jobs and economic opportunities in the New York City metropolitan region. That's why the bridge raising project is so vital as well as a host of less visible projects, including ongoing dredging of New York harbor and the recently completely dredging of the Kill Van Kull to allow deeper draft shipping.

MTA East Side Access Schedule Delayed Again; Symptom of Larger Problems

While the MTA seems to be making incremental progress on carrying out routine maintenance using an expanded Fastrack program that shuts down entire segments of the subway system overnight during the week, its capital program remains in shambles.

In particular, the East Side Access program's cost has ballooned to $8.2 billion and the completion has been pushed back to 2019.

The LIRR extension to Grand Central Terminal may cost $920 million more than the MTA’s most recent estimate, officials said Monday.

The Metropolitan Transportation Authority also pushed back the East Side Access project’s expected completion date by three years to August 2019.

Officials cited the enormous complexity of a project that includes building new tunnels in Queens and Manhattan, and the reconfiguration of a massive juncture that’s being used by three different railroads.

But MTA Chairman Joseph Lhota also said authority staffers in the past had put forward unrealistic construction schedules and budgets.

“The era of underestimating the cost of big projects is over,” Lhota said after an MTA committee meeting. “We’re going to be realistic about the cost and we’re going to budget accordingly.”

That promise, however, may be of little comfort to Long Island commuters longing to take a train to Grand Central on the East Side of Manhattan rather than Penn Station.

“Frustration seems to be the commuters
’ daily lot,” said Mark Epstein, chairman of the Long Island Rail Road Commuters Council. “Fares are going up, service is cut, the commuter tax benefit is cut, and now ESA completion date pushed back yet again.”

That's completely unacceptable and the additional costs are being borne by an agency ill equipped to deal with the debt.

It should not be taking decades for incremental improvements to the subway system and mass transit. The blame isn't solely on the MTA; it's also on the contractors who underbid and underestimate the costs of the projects and know that as their costs balloon, they'll get picked up by the MTA and taxpayers.

There's no reason that construction costs for mass transit projects in New York City and the US in general should exceed those in Europe or Asia. We aren't getting the kind of value for the money spent. It means that projects take far longer to be completed, far fewer projects get undertaken, and the economy suffers.

Infrastructure is the backbone of the economy and failing to invest in the infrastructure has long term competitive costs. It means that other countries and cities around the world can gain a competitive advantage for everything from international shipping to affecting local businesses shipping cross-town. We need to radically rethink priorities on infrastructure and need a long term plan to reduce costs while expanding and improving existing infrastructure.

Congress, and particularly the GOP, in its myopic vision of trying to reduce debts without consideration of tax increases, is underfunding infrastructure projects across the nation and it is already having significant effects on the economy.

It should not take three days for a freight train to transit through Chicago, but because of the bottlenecks and grade-level crossings, that's precisely what's happening. It's quicker to walk across Chicago than for a freight train to make the trip.

Various ports around the nation are losing business to Canadian ports because they've undertaken dredging to deepen the ports or don't have structural impediments to bigger ships entering the ports. In the New York Metro area, the Port Authority is trying to fast track the Bayonne Bridge rehabilitation project that would increase the height of the bridge to allow post-Panamax ships to access the region's key ports in time to maintain or gain business when the new Panama Canal channel opens in 2014.

Other countries are racing ahead with new and improved infrastructure projects at a time when our nation is barely funding maintenance and rehabilitation of existing bridges, tunnels, rails, and even water/sewer projects.

That has to change.

As for the East Side Access, it should be noted that the delays and costs as noted by the MTA are now in line with the federal estimates given several years ago. How is it that the federal government had a better grasp of the costs than the MTA on its own project?

It should be a reminder too that when NJ Transit claimed that it could keep the costs for its ARC Tunnel project to under $10 billion, that it wasn't supported by the federal estimates, which ran as high as $12.8 billion - or $4 billion more than the $8.7 billion accepted cost for the project when Gov. Christie killed the project due to leaving New Jersey taxpayers on the hook for all the overruns.

NYC Cuts New Deal To Redevelop Willets Point With Mets Owners

New York City has cut a new deal to redevelop Willets Point with the Mets ownership group. Willets Point has long been eyed for redevelopment. It's a neighborhood that is largely off the grid - it lacks sewer hookups and is a warren of junkyards and repair shops in the shadow of the gleaming new CitiField. Since construction got underway to build the stadium a few years back, Mayor Bloomberg had looked to get the redevelopment going.

Those efforts had stalled until now.

A new deal between the Bloomberg administration and a group of developers, including the owners of the Mets, will call for the remediation and redevelopment of a 20-acre area of the blighted neighborhood next to Citi Field, adding retail and ultimately new housing in a time frame that extends past an initial proposed 10-year plan, a person familiar with the agreement told The Associated Press.

The person requested anonymity because the person was not authorized to discuss the matter ahead of an announcement.

Under the agreement, the developers, Related Companies and Sterling Equities, would clean up the area and construct a mall on the west side of the ballpark. A 200-room hotel and “two retail strips” are part of the plan for the opposite end of the stadium, the New York Times reported.

Then, no later than 2025, they would start construction on a mixed-use component that would include housing and measure anywhere from 1.3 million square feet up to 4.5 million square feet. The founders of Sterling Equities are Fred Wilpon and Saul Katz, the owners of the Mets.

The redevelopment of the area, currently populated by auto-repair shops and junkyards and lacking infrastructure as basic as sewers, has long been a goal of Mayor Michael Bloomberg’s. In 2007, he announced a 10-year initiative that would bring homes and commercial space to the area.

The new agreement extends past that period, but the person speaking to the AP said that by the original end point of 2017, much would have been done including the vital first step of cleaning the area up and construction of some of the retail spaces.

Sterling Equities is run by Mets owners Fred Wilpon and Saul Katz, both of whom are embroiled in the ongoing fallout of the Bernie Madoff Ponzi scheme that defrauded investors. The Wilpons have been claiming that they were as much victims of the scam as everyone else, but the trustee has targeted funds owned by the Wilpons for reimbursing other victims.

The Mets have had a serious cash crunch for the better part of the past couple of years, and it's limited their ability to field competitive teams. They've also sold off minority ownership shares to investors to help raise funds for operations on and off the field.

So, how is it that the City thinks that Sterling Equities is in a financial position to make any of this happen?

One has to wonder whether they're actually going to be putting up any money of their own and are instead hoping for others to pay the way for them to move ahead on a deal that would benefit them financially in the long run.

Related Companies has deep pockets, and their real estate ventures includes getting another one of Bloomberg's pet redevelopment projects underway - the Hudson Yards. They've got the ability to get this done and they have the experience to build out combined retail and commercial space.

It would be really interesting and insightful to figure out the real working relationship here - and how it is structured.

Egypt Awakens to a New Dawn and Challenges

Hosni Mubarak may no longer be the President of Egypt, but the country still faces tremendous challenges and opportunities.



Mubarak was incapable of realizing that his time was past and his regime was ended by the Egyptian Army on behalf of the Egyptian people. At least that's what the Egyptian people hope is the case. The Army says that it will act as a caretaker government until elections are held. Protesters are going to keep the pressure on the Army to carry through with their promise.

The Army has already taken steps to prevent members of Mubarak's government from fleeing the country, which would suggest that they're looking to put at least some of them on trial for everything from corruption and embezzlement of funds to trampling civil and human rights such as torture, unlawful detentions, etc.

An official statement said that officials could only travel with permission from State Prosecutor or the Armed Forces.

The new move to put restrictions on movements of Mubarak loyalists came as mystery continued to surround the whereabouts of the deposed president and his family.

While officially it is stated that Mr. Mubarak has shifted to his Sharm-al-Sheikh resort on the Red sea, other reports in the Arab media said he may have moved to Europe or the Gulf.

There was no word or mention of the ex-president from the new regime.

The Swiss government has assisted efforts by freezing bank accounts associated with Mubarak, and would likely do the same with other Egyptian officials.

The caretaker government will still have to deal with rampant unemployment, poor economic opportunities, and rising food prices. That's the situation that will face whoever is elected as part of the new Egyptian government.

Fostering economic development will be key, as more than half the country lives in abject poverty.

UPDATE:
Egyptians have begun taking charge of their own future, and hundreds of volunteers have turned out in Tahrir Square to clean it up after nearly three weeks of protests and riots.

New Jersey's Weatherization Program Squandering Millions

The 2009 stimulus package included a section for weatherization programs around the country. New Jersey was entitled to $119 million under the ARRA of 2009, but has spent only 5% of the amount thus far, and much of that has been squandered.

This program is desperately in need of reform or elimination. The intentions of the program -to improve weatherization and improve efficiencies of homes owned by low-income households - may be worthy, but this program isn't the way to get it done. The State Auditor's audit bears this out:

According to a report released this week by State Auditor Stephen Eells, the program’s cost controls weren’t being effectively implemented.

The audit determined that $2.7 of the $8.7 million in expenditures reported so far were considered fraudulent and the payments were stopped. Weatherization agencies are provided advance funds but must submit reports on the expenditures.

Of the $119 million, New Jersey was awarded half, or $64 million, upfront. The state was promised the other half once the it could demonstrate progress, or that 30 percent of the units the state promised to weatherize are completed.

The report noted that the lack of oversight resulted in varying construction costs, underpaid workers, and “unreasonable spending.”

Eells said that the spending problems were the result of “inadequate review of financial reports and a lack of guidance from the state and federal agencies.”

Auditors visited four weatherization agencies and found that of the reported $614,000 in expenditures, $54,000 were “unreasonable.”

For example, one weatherization agency spent $1,499 for in-dash GPS systems when a cheaper a $200 portable model would have worked. Another agency was reimbursed more than $17,000 for vehicles it purchased prior to the grant funding.

Construction costs fluctuated dramatically. One weatherization agency charged the program $1.50 for light bulbs, while another charged $27; the audit did not specify how many bulbs were purchased in each instance. Another weatherization agency charged $10 for a dryer vent, while a similar installation cost $126, according to the report.

The problems are a combination of businesses taking advantage of what they perceive to be free money and government programming that doesn't establish benchmarks, reasonable costs, or effectively target waste in the program.

This program could have been more successful if the state funneled the money to upgrading state office or schools (or both) with more efficient boilers and HVAC systems. This would have reduced costs to taxpayers over the long term and improved long neglected infrastructure. Homeowners can do many of the same projects for a fraction of the money spent on the stimulus weatherization program on their own or via their own contractors.

In fact, it might have made more sense for the state to arrange a weatherization rebate program allowing low income homeowners to apply for rebates for the work done rather that the system that was put into place. While this might not have eliminated the bogus requests and outlandish costs, it would have accelerated the spending within the state on weatherization programs and gotten people working on these projects.

A rebate system would have made more sense in that the state could have set up an application form putting together the contract/proposal form that homeowners could use to apply for the funds and contained the necessary protections to the homeowner and contractors. Work on each project would have been contingent on approval by the state - protecting homeowners from being hit with unexpected costs (or a provision to allow for a maximum unexepcted costs) and giving all parties a measure of certainty in upgrading homes around the state.

Missed Opportunities and Priorities

The failure of the ARRA of 2009 to boost the economy and get people spending on the basis of hundreds of billions of dollars in projects and transfer payments is all too apparent as we've seen the economy sputtering along for more than a year.

Now, President Obama has announced his plan to seek another $50 billion stimulus for infrastructure improvements over the next six years.

“Over the next six years,” Mr. Obama promised “we are going to rebuild 150,000 miles of our roads — that’s enough to circle the world six times; that’s a lot of road. We’re going to lay and maintain 4,000 miles of our railways — enough to stretch coast-to-coast. We’re going to restore 150 miles of runways and advance a next-generation air-traffic control system to reduce travel time and delays for American travelers — I think everybody can agree on that.”

Mr. Obama vowed that the plan, which would include work on high-speed rail lines, would be “fully paid for” and not add to the deficit.

But Republicans, who have been campaigning on the theme that the president’s $787 stimulus package was wasteful and did not work, immediately cast aspersions on the plan, describing it as another “tax and spend” initiative from Democrats. Representative Eric Cantor, the House Republican whip, called it “yet another government stimulus effort, another play called from the same failed Keynesian playbook.”

That's a tacit admission that the prior stimulus package didn't work. Moreover, it shows the folly of claiming that projects that were shovel ready that weren't. The spending here isn't going to come soon enough to help with the current recessionary environment (particularly if it is being spread over six years - not in one burst).

The timing couldn't come soon enough for Congressional Democrats, who need to bring home some kind of benefit to their constituents in the depths of a strong recession.

Of course, the question is just how effective and targeted the infrastructure spending will be. I'd be all for infrastructure spending, including energy distribution, high speed rail, mass transit, and road and bridge improvements, but the project will end up going to projects that are little more than routine maintenance and long term projects that localities haven't exactly seen as a priority. Throwing billions towards those projects isn't going to provide long term improvements because the localities will not maintain and upgrade their existing infrastructure.

Moreover, there remains a single project that is all ready save the lack of financing - the construction of 4WTC, which is on hold pending an improvement in the real estate climate in New York City. The President would have been wise to have included that in the package - a multibillion dollar financing package to complete reconstruction at Ground Zero. Instead, the project remains on the shelf. Construction at 4WTC would result in the creation of hundreds of direct jobs in all manner of construction trades, along with thousands of ancillary jobs in the fabrication of steel and materials for the building and other industries.

Gazans Get Another Chance On Greenhouses

Daylife is running the following photo and caption obtained from Getty Images:

Palestinian women dig a pool at a farm, part of a project implemented by the Agricultural Union of Agricultural Work Committees funded by the European Union, in Deir al-Balah, in the centre of the Gaza Strip, on August 10, 2010.

The photo jogged some memories I had of the Gaza disengagement and subsequent activities by Gazans in 2005, so I did a little more digging.

It turns out that the piping you see behind the women digging a pool for agricultural purposes is the remnants of greenhouses destroyed by Gazans following Israel's withdrawal from Gush Katif. Deir al Balah was adjacent to the Israeli community. When Israel forcibly removed its settlement in Gush Katif, the Gazans, instead of using the greenhouses for economic gain, destroyed them and used the area as a launching pad for kassam rocket attacks against Israel.

Now, Gazans are getting another chance to make good on the greenhouses.

Now Gaza Arabs are going to get a second chance to try to recreate the thriving greenhouses of Gush Katif. The United States Agency for International Development is to sponsor a project termed Family Agricultural Greenhouses, which will construct three new greenhouses.

USAID hopes the three greenhouses will support 900 families in the Hamas-run Gaza region.

The project has approval from both the Palestinian Authority and the Israel Defense Forces. Israel is working with USAID to coordinate the transfer of goods into Gaza to complete the project.

Anita Tucker, a former resident of Gush Katif, doubts that the new plan will be successful. Tucker explained that while Gaza Arabs were at one point beginning to succeed in agriculture with help from their Jewish neighbors, the rise of the PA and later of Hamas created a situation in which rival terrorist groups battle for control at the expense of civilians, and ultimately destroy efforts to build local industry.

President Still Blaming Wrong People For Economic Woes

President Obama has once again taken to castigating the banks for producing the mass market meltdown that began with the real estate market correction that turned into a rout on Wall Street as valuations of properties became uncertain.

President Obama, in his weekly address on Saturday, placed much of the blame for the recession on “the irresponsibility of large financial institutions on Wall Street that gambled on risky loans and complex financial products, seeking short-term profits and big bonuses with little regard for long-term consequences.”

The president is scheduled to meet with banking executives at the White House on Monday in another administration effort to increase the flow of loans to consumers and small businesses. Among those expected to attend are representatives from Citigroup, JPMorgan Chase, Bank of America, Wells Fargo and Goldman Sachs.

An estimated six of 10 homeowners with mortgages have rates that exceed the 4.8 percent rate currently available on 30-year fixed mortgages, the least risky form of home loans.

Nevertheless, only half as many refinancing applications were reported last week than were reported at the beginning of January, the peak level for the year. The total dollar volume of refinancing activity in 2009 will be about $1 trillion. In 2003, another year when rates fell, it was $2.8 trillion.

(Mortgage applications to purchase houses showed modest improvement for much of the year, but recently fell sharply to their lowest level in 12 years.)

“The government has succeeded in driving mortgage rates down to their lowest level in our lifetime,” said Guy Cecala, the publisher of Inside Mortgage Finance magazine. “That hasn’t been a big home run, because a lot of people can’t take advantage of it.”

It is highly unusual for mortgage money to be available below 5 percent. Average rates fell as low as 4.7 percent in the 1940s, as the government held down interest rates to finance World War II, and stayed just below 5 percent until the early 1950s. Rates went above 5 percent in 1952 and stayed there — until this year.

Why have so few people taken advantage of the low rates to refinance?

For starters, real estate in much of the country is underwater; the mortgage exceeds the value of the property at current appraisals. Under those circumstances, the banks shouldn't be refinancing the properties because the values don't support them. I've already refinanced my home once in the past year, and I got a rate one point lower than when I first purchased. I would refinance again if the rate dropped another point below my current mortgage, but until that happens, it isn't worth the financial hit to do so, even if I'm rolling the closing costs back into the mortgage. My home price has thankfully been relatively stable, in part to my neighborhood being relatively stable for home prices and that I've done significant improvements to the home so that the appraised price is still at or above my purchase price. Many people across the country can't say that, which is why they're not able to take advantage of the low interest rates.

The President's policy to provide homeowner assistance also falls short because it continues to distort the marketplace, and that low interest rates, particularly for adjustable rate mortgages, will rise significantly once their teaser rates end, leaving people who have marginal credit in the same position that created the market meltdown in the first place. It's setting things up for a repeat of the real estate meltdown, but this time President Obama is looking to blame the banks for the mess instead of calling out homeowners and banks for extending credit to those who should not have received loans on homes they could not afford.

Carbon Apologies?

President Obama sent Secretary of State Hillary Clinton to India, where she promptly apologized for the US emitting carbon.

"We acknowledge now with President Obama that we have made mistakes in the United States, and we along with other developed countries have contributed most significantly to the problem that we face with climate change," she said. "We are hoping a great country like India will not make the same mistakes."

She was referring to Obama's statement in Italy earlier this month that the U.S. had "sometimes fallen short" of its responsibilities in controlling its carbon emissions.

Speaking at a news conference on the pool side patio of the Taj Mahal Palace & Hotel, which was strewn with bodies after terrorists attacked this coastal city last November, she cast India and the United States as allies in the fight against terrorism.

Never mind that it was carbon emissions that turned the United States into an economic powerhouse and established the arsenal of democracy standing up to the Nazis and then the Communists of the Soviet Union all while creating a high standard for Americans, which many now take for granted. Apparently, all that requires an apology.

India was having none of this though. They know that their future relies on building up a manufacturing and technological base that requires carbon emissions and they're not going to sacrifice their chance to improve the standard of living of hundreds of millions of Indians to placate a bunch of eco-leftists who think that carbon dioxide is a pollutant and must be controlled.

That India is building more energy efficient buildings is besides the point - the sheer number of people and the desire to improve their quality of life means that more carbon will be emitted. Saving money is the name of the game and in a recessionary economic environment, that trumps some claim that the environment must be saved by reducing emissions.

The thing of it is that most people want to live like Americans do. They want a high standard of living and want the creature comforts that we take for granted. That comes at a cost - and the ecoleftists don't want that dream to be for everyone, not even all Americans. They want to restrict energy development, which drives up the costs, requiring people to make choices that they wouldn't otherwise have to make. Energy alternatives that provide zero emissions are available, but are passed over because the eco-left and NIMBY has thwarted new development in the US (see, power, nuclear), which would have a smaller footprint kilowatt v. kilowatt for wind or solar power, which aren't always consistent in their output.

Curiously, the New York Times, the so called paper of record, ignored the Clinton apology, while delving into the fact that both China and India oppose carbon caps because their per capita emissions is far lower than that of the United States. Neither is going to sacrifice their economic development to fulfill this carbon scheme.

UPDATE:
Don Surber links. Thanks!

Fear Is the Mind Killer

It's quite instructive to see how President Obama is using fear to demand passage of the porkfest "stimulus" package that will not deliver stimulus in a timely fashion. It isn't even a focused effort. Obama is using a shotgun approach and hoping that something hits that he can hang his hat on to show that this mess has done something to stimulate the economy, even though it is a government stimulus package.

This is so fundamentally different than what FDR did during the Great Depression, when Roosevelt realistically portrayed the economy and focused on the positives to induce spending and growth and economic development. Roosevelt sought to avoid panic, while Obama is describing the situation as catastrophic when it is not the case.

Obama is going in the completely opposite direction by warning of far more catastrophic damage to the economy if the stimulus and TARP 2, the wrath of TARP, doesn't come to pass.

Failing to act may lead to a catastrophe. So, what will acting in a grossly irresponsible and fiscally harmful manner do?

It will make it worse. That's what the CBO says.

Yet, we're supposed to believe that the recession will get worse unless we not only go through with porkfest 2009, but TARP 2, the wrath of TARP, and a player to be named later.

That's at least $2 trillion in spending that Obama wants to unleash without one care what it does to the economy. His only support for such massive spending is the fear of doing nothing, even though experts believe that this recession will end later this year even without any stimulus package.

We have examples of what massive government spending and irresponsible policy have wrought. It's called Japan from the 1980s onwards. They've had a crummy economy for years on end because the government stuck its piehole where it didn't belong, and the private sector suffered horribly for it. Of course, Obama claims that the Japanese government failed in its stimulus package because it didn't sufficiently spend enough money. By that reasoning, even the amounts Obama is talking about aren't going to be enough, and he will demand more.

That's why we're hearing Obama and Treasury Secretary Geithner talk about the need for yet another TARP bailout package, which may cost another $1 trillion.

We're going to repeat that same mistake, except Obama hopes that his presence will change things. I've reported on such nonsense before - it's what socialists and Marxists say every time they get their hands on the engines of economy. They will change things and make them right, and all they succeed in doing is destroying economies and causing untold misery.

It's what happened in Zimbabwe. It's what is happening in Venezuela and a whole laundry list of countries around the world who suffered under the socialist delusions that this time - with the right people in charge - socialism will prevail.

Obama's politics and those of the Democrats are expanding government like never before and it undermines the market system and your liberty and freedoms. It puts the federal government in greater control over the economy in ways never before envisioned by the Founding Fathers, and in ways that even FDR would never have contemplated.

UPDATE:
And the Senate Democrats, plus Republicans Collins, Snowe, and Specter, have now gone and thrown its lot in with the trillion dollar porkfest. The final vote was 61-37 approving this nonsense. It's no wonder that the markets are tanking.

Not only did Tim Geithner's little talk about TARP 2 sound the wrong message, but the markets reacted in a bad way.

The markets had been looking for an outcome because they want certainty. They've gotten it. The markets will certainly continue trending down because the porkfest will suck the life out of the private sector.

UPDATE:
Fear is the economy killer. At no time in the past 60 years has the government solution to a recession been a multitrillion dollar plan that is unaffordable and pork-laden. Yet, the Democrats continue pushing the meme that this is the worst crisis in history, and can top the Great Depression unless immediate action is taken.

The statistics tell a different tale.

Obama Blasts Critics and Uses the Fear Card

President Obama is getting a wee bit testy these days because everything isn't exactly going to his plan. His cabinet nominees have this nauseating tendency to avoid paying their tax obligations or reporting their income properly. His stimulus plan is receiving strong opposition because people see for the porkfest it is.

He claims that people are basing their opposition on phony and debunked economic theories.

"Don't come to the table with the same tired arguments and worn ideas that helped to create this crisis," the president said at the House Democrats' annual retreat in Williamsburg.

"We're not going to get relief by turning back to the very same policies that, for the last eight years, doubled the national debt and threw our economy into a tailspin," he said. "We can't embrace the losing formula that says only tax cuts will work for every problem we face, that ignores critical challenges like our addiction to foreign oil, or the soaring cost of health care, or failing schools and crumbling bridges and roads and levees.

"I don't care whether you're driving a hybrid or an SUV -- if you're headed for a cliff, you've got to change direction."

The Democrats welcomed the president with frequent interruptions for applause as he took on criticisms of the bill.

Obama said he valued "the constructive criticism and healthy debate that's taking place around this package," but added that speedy passage of the bill was essential.

"We're not moving quickly because we're trying to jam something down people's throats," he said. "We're moving quickly because if we don't, the economy's going to keep getting worse."

Really? How about the theory he's resting his entire plan on - that massive government deficit spending will reduce the effect of the recession or keep it from getting worse. It seems that his theory has been debunked as well; folks who have studied FDR and the Great Depression note that FDR's spending plans and economic policy actually made the Depression last longer and more severe.

Obama's modeling his plans on FDR. He's throwing the money around in ways that drunken sailors could only dream.

Obama has an obligation to show us what his plan will do for America not only in the next nine months, but in the future when the bill comes due for his outrageous spending.

He is using fear to drive Congress to pass this legislation despite the fact that the overwhelming majority of the spending isn't stimulus but pork and massive spending increases that wont take effect until well after the recession is over.

No critics are talking about just providing tax cuts; President Obama is making strawman arguments that obscure his real intentions.

Obama rejected calls for more tax cuts and significant slashing of the bill's more than $800 billion price tag, and said complaints the package was a spending bill rather than a stimulus bill were off base.

"What do you think a stimulus bill is?" he said. "That's the point."

No, a stimulus bill is one where the spending is to occur when and where it's needed; not to fund every pet project under the sun, which is precisely the case with this porkfest.

Obama warns that if the porkfest isn't passed, things will get much worse. Imagine if FRD said that the only thing we have is fear itself. That's Obama's case in a nutshell.

UPDATE:
Consider the Japanese example. Japan engaged in a massive spending program to lift the country out of a recession. Only problem - it didn't work.

Japan’s rural areas have been paved over and filled in with roads, dams and other big infrastructure projects, the legacy of trillions of dollars spent to lift the economy from a severe downturn caused by the bursting of a real estate bubble in the late 1980s. During those nearly two decades, Japan accumulated the largest public debt in the developed world — totaling 180 percent of its $5.5 trillion economy — while failing to generate a convincing recovery. Now, as the Obama administration embarks on a similar path, proposing to spend more than $820 billion to stimulate the sagging American economy, many economists are taking a fresh look at Japan’s troubled experience

Which failed economic theories are we talking about? Obama wants people to think that the GOP and his critics are pushing failed economic theories, when we can see with great abundance that Obama's spending plan has been tried before and has failed miserably.

And yet, Obama wants us to believe that the porkfest be passed now (actually on Monday because he and his fellow Democrats are whooping it up at a lavish retreat this weekend and can't be bothered with the day to day business of running the country - and yet they railed on at length over businesses that do the same (hold retreats and company gatherings).

Rich Lowry has it right, Obama is using faith based economics to demand passage simply because he won. More to the point, Don Surber notes that Obama is fast becoming Eric Cartman before our eyes - that we must respect his authoritay. If you don't like what Obama says, tough. That's his position, and he's sticking with it even as most Americans don't want to see the bill passed in its current form.

Slublog at Ace has more.

UPDATE:
Via joel comes this funny video: Stimulis: Because all economies have performance issues

Porkfest 2008: Democrats Need GOP To Provide Cover

The porkfest that the media continues to call a stimulus package, despite the fact that the overwhelming majority of the money in the sprawling $825 billion ($1.1 trillion when all costs are factored in) applies most of the money in the years following when most experts believe the recession to end.

In fact, most experts believe that the recession will end by the end of this year, without any need for further stimulus. Throwing down hundreds of billions of dollars in money that the nation doesn't have will not solve the problem, but the Democrats keep urging the GOP to sign on board with this nonsense.

Democrats can own the porkfest all on their lonesome. They don't need GOP votes to make it happen. They do need GOP votes to get cover when things don't work out as planned. The GOP shouldn't oblige them as they did on the original TARP legislation, that ended up passing because the Democrats larded up that mess with pork. That's the solution to the mess to secure votes; pork it up.

Here's my advice to the GOP. You want to show that you're fiscally responsible? Here's how to do it.

Demand that the stimulus bill drop all spending that doesn't come within the fiscal year that ends in October. If the spending occurs in 2010, 2011, or 2012 or beyond, it gets dropped. If it isn't directly on infrastructure improvements, it gets dropped.

You want to see how quickly the $825 billion ($1.1 trillion once interest and added costs are figured in) drops to something in the range of $80 billion?

That's how to do it. The GOP should introduce their own legislation that takes only those items that actually result in infrastructure and stimulus to the economy within the next nine months. Everything else gets dropped. Show the public just what a fiscally responsible bill looks like. Shame the Democrats (I know, that's pretty well impossible to do, but most Americans will start to realize the mess the Democrats are about to make).

The Democrats got their wish list out and they're demanding that the GOP go along with it. Why? Out of bipartisanship? Hardly. There's nothing bipartisan about it. It is a laundry list of out of control government spending that will not assist in economic recovery, and it's not even likely that that spending occuring during the current year will bring about the end of the recession; lowering taxes and providing incentives for businesses to grow will spur the economy into a recovery. Government spending will retard and delay the recovery. History has shown this to be the case, and yet the Democrats want to use the opportunity to expand government into areas that it has repeatedly shown itself to be wanting - health care in particular.

Enough is enough.

UPDATE:
The fecklessness of the Democrats knows no bounds. On top of the porkfest, the Obama Administration is calling for 10% cut in defense spending. Amazing. He's going to undermine the nation's national security to ensure that billions get spent on programs that have been abject failures for decades.

The Porkfest Has Its Supporters

Where is the money going to go in New Jersey? Herb Jackson spins such a rosy picture with his breakdown of where our tax dollars will be going. Oh wait. It's not our tax dollars since this is all debt financing and the federal government is borrowing a trillion dollars to put these new programs and spending plans in place. Does anyone actually think that any of this federal money is going to make its way into repairing roads or bridges in 2009, when it is most needed? I don't. New Jersey's experience in building schools has shown that it is an awful steward of tax dollars - your money. Rosy pictures of hundreds of school projects completed accompanied the plans of the School Construction Corporation (now the School Development Authority) and the billions that were appropriated for school projects. That ended up in a cesspool of corruption and half finished projects, if they were ever started at all. Consider that Jackson notes that $420 million will go to school construction and renovations. Here's New Jersey's record with a far greater sum:

The SCC was founded after July 18, 2000, when the New Jersey Educational Facilities Construction and Financing Act allocated $8.6 billion for public school construction and renovation statewide, which included $6 billion for the 31 urban "Abbott" special-needs districts.

In July 2002, then Gov. James McGreevey created the New Jersey SCC to oversee the school construction projects.

However, over the last few years, the SCC was criticized for overspending on projects and fiscal mismanagement.

When Corzine took office in 2006, he created a committee to review SCC operations and develop a new process for school construction. The committee recommended a complete overhaul of management.

Since its inception, the SCC has completed 30 new schools and 26 major renovations. But funding shrank with only a few of the beginning projects underway, with over 300 projects still pending.

Billions of dollars spent and a grand total of 56 major projects were finished out of more than 300 proposed. The New Jersey portion of the porkfest will be a drop in the bucket based on how New Jersey spends money on schools. It certainly wont provide the kind of infrastructure improvement Obama claims, and it certainly wont help this year. It probably wont even help years from now as the backlog of projects from the original SCC is so long, and that's assuming that the projects have been spec'd out. The state will likely roll the money into the general fund so as to help the bottom line of the state, rather than address the structural problems with the state budget.

Even President Obama's choice for budget chief, Peter Orszag, who previously ran the Congressional Budget Office, thinks that stimulus plans such as the one that President Obama and the Democrats are ramming through Congress are awful and do nothing to actually stimulate the economy:

Timing. The timing of fiscal stimulus is critical. If the policies do not generate additional spending when the economy is in a phase of very slow growth or a recession, they will provide little help to the economy when it is needed. (Over the long term, the key constraint to economic growth is the rate at which the capacity of firms to produce goods and services is expanded—not aggregate demand.) Poorly timed policies may do harm by aggravating inflationary pressures and needlessly increasing federal debt if they stimulate the economy after it has already started to recover.

For numerous reasons, discretionary fiscal stimulus may not be properly timed, and it has often been mistimed in the past. The failure to forecast a coming slowdown or contraction in economic activity is generally thought to be the most important reason for poor timing and is referred to as a "recognition lag." Additional problems can arise if the policy change that is adopted does not affect spending immediately or if there are lags in enacting or implementing policies.

The historical record on the effectiveness of efforts to provide discretionary fiscal stimulus is mixed.8 Much of the research indicates that fiscal policy in the 1960s and 1970s was poorly timed and, in some instances, destabilizing. By contrast, the tax rebate in 2001 provided stimulus during the recession of that period.

The recognition lag is a major challenge in applying discretionary fiscal policy, but it may not be as critical as it was before the 1990s. One of the most severe recognition lags occurred in the 1974 recession, when economists generally did not perceive the economy to be in a recession until well after it had begun. This meant that the tax rebates ultimately adopted to spur the economy did not take effect until March 1975, after the economy had already started to recover. During the two most recent recessions (in 1990 and 2001), by contrast, economic weakness was recognized relatively quickly. Concerns about slow growth—a slowing that subsequently was dated as a recession that started in August 1990—were raised in September 1990. Similarly, the stock market crash that started early in 2000 alerted economists to the possibility of a recession, and by January 2001 economists generally expected very slow growth. The 2001 recession was subsequently dated to have begun after March of that year. One of the problems that made it difficult to recognize the poor state of the economy during the 1974 episode—a high rate of inflation that distorted the perception of the underlying weakness in real economic activity—has not been a problem in recent decades.

The current porkfest doesn't actually increase spending right now while we're in the recession, but actually backloads the spending into 2010 and beyond, when economists already predict a recovery even without any stimulus package.

James Pethokoukis notes the following as well from the CBO:

"Practically speaking, however, public works involve long start-up lags. Large-scale construction projects of any type require years of planning and preparation. Even those that are "on the shelf" generally cannot be undertaken quickly enough to provide timely stimulus to the economy. For major infrastructure projects supported by the federal government, such as highway construction and activities of the Army Corps of Engineers, initial outlays usually total less than 25 percent of the funding provided in a given year. For large projects, the initial rate of spending can be significantly lower than 25 percent.

Some of the candidates for public works, such as grant-funded initiatives to develop alternative energy sources, are totally impractical for countercyclical policy, regardless of whatever other merits they may have. In general, many if not most of these projects could end up making the economic situation worse because they would stimulate the economy at the time that expansion was already well under way."

He further notes that only 15% of the entire porkfest will actually be spent during the fiscal year ending in October. In other words, the overwhelming majority of this money (which the nation doesn't even have) isn't going to be spent until well into the future and when its effects are going to be dubious at best.

Wall Street pundits may approve of the stimulus package passage because they think that it gives them a sense of stability, but it doesn't actually improve the economic outlook. Wall Street is into whatever will provide them with free money, and a porkfest is just the thing. That's why they were cheerleading for the last stimulus package, TARP, and now the current effort. They like stability, and that the bill passed gives them hope that things will stabilize, even though it papers over real problems with the economy and doesn't actually address the supposedly critical pieces of infrastructure that Obama claims must be improved.

Speaker Pelosi says that Democrats will be held accountable for the spending. Really? When have they ever been accountable for spending? Have they ever produced a budget that was smaller than the year prior because revenues didn't match projections? Have they ever practiced fiscal responsibility? She's just trying to spin the fact that the GOP didn't go along with the porkfest as something to be proud of. The "stimulus" package still includes pork such as providing money for contraceptives and the NEA and other government entities that provide no net benefit or job creation.

And you wonder why people think that the spending isn't going to be temporary?

Gazans Resume Tunnel Work

Even on the Muslim day of rest, the Gazans resume their work to build smuggling tunnels that Hamas uses to bring weapons and equipment needed to carry out their war with Israel.

“Everybody’s busy rebuilding now,” said a manager of one digging team. “In a month, it will be back to normal.”

The defiant pose seemed surprisingly brazen in light of recent events: Israel said smuggling tunnels were a prime concern, after Hamas rockets, in attacking Gaza, and it hit dozens of them in airstrikes during the war. But the tunnels are the principal livelihood for many people here, and as soon as the bombing stopped, they were right back in them with their shovels.

The revival may challenge what Israel sees as one of its main accomplishments in the war, crushing Hamas’s ability to rearm, and has drawn bitter reactions from residents, who say it is proof the war was a useless enterprise.

“The war was for nothing,” said Mahmoud Abu Adnan, a grocery store owner.

But Israel argues that very soon the tunnels, restored or not, will not matter as much. It has secured agreements with Egypt and the United States that will make this smuggling route far less important. The details have not been made public, but Israel says it is confident they will work.

“What is different today is that there is a good international commitment to prevent the link-up between Iran and Hamas,” said Mark Regev, the spokesman for the Israeli government. “We believe that Hamas will not be allowed to rearm.”

That commitment has yet to be tested. While Israel said that about 80 percent of the tunnels were out of commission after the bombing, Gazans seemed skeptical that anything would change.

“They can destroy as much as they want, but the tunnels will just come back,” Mr. Abu Adnan said.

That spirit of defiance is at the center of the Gazan psyche. Many people here do not condemn Hamas rockets, arguing vociferously that they are the only way Gaza can protect itself from Israeli aggression. The economic blockade, they argue, and the Israelis’ unwillingness to lift it, is justification for the attacks.

The Gazans rationalize the smuggling tunnels because Israel has blocked economic activity with Israel, but ignore that Egypt has likewise done the same. The Gazans ignore that the reason Israel doesn't want anything to do with Gaza is because Hamas controls Gaza and seeks Israel's destruction.

The Gazans complain about the lack of economic opportunities and blame Israel. It's typical. Let's just ignore that Gazans could have used the disengagement in 2005 to build economic bridges with the rest of the world, turning the seaside enclave into a hub of tourism and trade, but instead pushed for Hamas to take over and supported jihad against Israel. Economic opportunity never had a chance.

As for the part about Israel's aggression, we'd just have to ignore that Israel unilaterally disengaged from Gaza in 2005. No Israelis were in Gaza from that point forward. Hamas and the other terrorists in Gaza used that fact to upgrade their terror infrastructure and commence a rocket war against Israel. Israel only responded in force when the rocket attacks became so brazen that Israel had no choice but to respond. Such was the case with the latest Gaza battle; a six-month hudna lasted all of five days when Hamas and other terrorists fired rockets and mortars at Israel. It was when Israel finally responded that the world took notice.

While we're at it, the world wont take much notice of the fact that the terrorists were again busy today attempting to hit Israel with mortars. They fell short, but the intent was there. It's only a matter of time before Hamas and the other terrorists start lobbing rockets and mortars at Israel and we'll be back to reporting on an Israeli operation to attack Hamas targets in Gaza. The jihad waits for no one.

China's Energy Crunch About To Hit Home?

This is a pretty ominous report from China claiming that they've basically got two weeks of coal reserves before they start shutting down power plants.

CHINA only has enough coal for 12 days of consumption, three days less than a month ago, state media reported Wednesday, sounding the alarm bells over the nation's most important source of energy.

In certain parts of China, such as densely populated Hebei province in the north, reserves are down to less than a week, Xinhua news agency reported, citing the China Electricity Regulatory Commission.

In the period since early March, coal reserves have slumped by 12 per cent to 46.7 million tonnes, according to the commission.

Reasons for the shortage were "multi-dimensional," the commission was quoted as saying, without elaborating.

That's a pretty serious problem for a country that is hugely dependent on coal to produce the goods that most of the world uses and which the government in Beijing uses to keep a lid on discontent. It follows a winter in which vast parts of the country were shut down because of snowstorms and coal supplies dwindled because trains couldn't bring in new supplies.

If the economy falters because of power disruptions, it's going to create serious problems not only in China but around the world, though it might mean cleaner air for billions of people as thousands of factories are forced to shut down or severely curtail production over the lack of reliable power.

How did this problem get so bad? Government mismanagement almost certainly plays a role, but so does rampant development across the country. It's this rampant development that has also driven up petroleum costs around the world with no sign of abatement any time soon.

Tax-Break Firms Break Jobs Pledges

Regardless of whether you support the idea of tax breaks for firms that retain or create jobs in a given locality, businesses that signed up for these tax breaks and cut the number of jobs in those localities or failed to create jobs should be held accountable. This is just the experience in New York City:

More than 100 businesses have slashed 4,111 local jobs despite getting more than $91 million in tax breaks and incentives from the city intended to spur job growth, The Post has learned.

According to a new report from the city Economic Development Corp., government aid has been granted to more than 500 companies since 1998 "to support investment, job retention and growth."

The report reveals that 35 of the 500-plus deals carried a minimum job requirement last year, and that eight of the 35 failed last year to create the jobs they promised as part of their deals. Despite this, only one company lost any of its benefits.

Among the eight companies are international investment bank Brown Brothers Harriman, teen-clothing chain Delia's and the former concert and sporting-event producers SFX Entertainment, now owned by Live Nation.

These businesses got tax breaks on the promise that they would keep their business in New York City and create jobs. They've failed on those promises, and should not be entitled to the tax breaks.