James Pethokoukis

Politics and policy from inside Washington

Why Obama’s school rehab plan may flop

September 14, 2011

The point of President Barack Obama’s American Jobs Act is, well, to create jobs. And the sooner the better, right? Unemployment is above 9 percent, and everyone from Wall Street to the Congressional Budget Office to the White House now thinks that number isn’t going to improve anytime soon. Thus Obama’s new $450 billion stimulus plan. But since this new proposal is structured just like 2009′s $800 billion American Recovery and Reinvestment Act, it should be no surprise that it contains many of the same flaws as Stimulus 1.0.

Example: Yesterday, Obama traveled to Fort Hayes High School in Columbus, Ohio to promote his plan, particularly the bit about spending $25 billion to refurbish 35,000 American schools. Here is some color from The Columbus Dispatch:

Obama toured Fort Hayes Arts and Academic High School, a campus of Columbus City Schools buildings, some of which date back to the Civil War era and have undergone significant upgrades. The president’s jobs plan calls for the $25 billion to modernize 35,000 schools nationwide. Ohio could get up to $985.5 million, with up to $111.6 million for Columbus City Schools. ”I wouldn’t mind taking a few classes here,” said Obama, who used Fort Hayes as an example of upgrades and jobs created to complete those upgrades that could take place throughout the U.S. If his bill is passed. ”The renovation of Fort Hayes is a great example of where those jobs can come from if we can finally get our act together in Washington,” Obama said.

But what Fort Hayes High School really exemplifies is how long it will take for this new round of government spending to show any employment results. Some $55 million in renovations on the campus began in March 2003, starting with design work, and were originally scheduled to be completed by March of 2007. Different projects started at different times, with each scheduled to take about three years to complete. Heck, it takes months just to do the necessary architectural planning. In short, there will be nothing “shovel ready” about these education infrastructure projects. If we want to upgrade U.S. schools, fine. But the effort will make for a poor 2012 jobs plan.

And, of course, there are always concerns about how efficiently this money would be spent. In 2010, Los Angeles opened its new Robert F. Kennedy High School, costing $578 million. Here’s how ABC News described it:

The new campus between Wilshire Boulevard and 8th Street in Los Angeles preserve pieces of the historic hotel, but it’s the stunning new architecture that’s drawing eyes and plenty of wagging fingers.

The soaring, unusually shaped buildings are clad in glass and metal, and the interiors are just as slick. The facility boasts a state-of-the-art swimming pool, fine art murals, an ornate auditorium suitable for hosting the Oscars, and a faculty dining room that the superintendent says is “better than most restaurants.”

All those amenities add up to an enormous price tag, which works out to about $250,000 per pupil. That $578 million cost is more expensive than the Bird’s Nest stadium built for the 2008 Olympic Games in Beijing, China, which cost $500 million. It’s also significantly more expensive than the $400 million home of the Denver Broncos, Invesco Field at Mile High.

So a) all this new spending would not create many jobs anytime soon — even if you buy its Keynesian rationale — and b) the rush to spend money may result in plenty of waste just as with the LA high school and the loan guarantees to solar-panel maker Solyndra.

Comments

you took a old article that showed it takes planning to build something and wrote an article about how the jobs plan could flop because it wont be “shovel ready” since technically shovels might not be used in the beginning. This is journalism? Really? I want my 5 minutes back.

Posted by klastastic | Report as abusive
 

I was at a funeral the other day and met up with a man who used to be a boss, but now was retired. He told me that the first thing that he did when he retired was sell his house and move up north into the wilderness where his cabin was. He stayed there a few years,
but then put the cabin/home up for sale, as well. He then moved back to town to live in a condo because he hadn’t been happy all by himself in the middle of nowhere. He needed company.

One of the unusual things about this recession is that the bosses who used to sit high up and alone are finding that now they are not alone anymore. They are all sitting as tight together as if unionized, in that, they are all doing the same thing—holding out.
It’s having protest impact, making them feel like they are in control for a change, and making them actually pretty smug-happy.

An economic adviser to Reagan was on TV saying how $135 billion of the Obama’s job stimulus payroll tax cut wouldn’t translate into jobs because bosses would
put the “savings” back into retained earnings, just like they have been doing since the crash. That’s about 30% of the total package!
The balance sheets will look even better than before.

The other unusual thing is this: The bosses are jocking their companies for the certain dismal future. They are planning on being where the dollars are going to be
and that means that the America, the way we are familiar with it, will be no more.

This stimulus is not going to work because the plan doesn’t “see” what business is leaning toward. I was reading about Qualcomm. They discovered that they
need to give away closely held technology knowledge to cheap labor countries to meet the price point for markets where all the money is going to be.
America’s dream of getting out of this recession through innovation will not materialize if bosses are willing to give up their “underpants” to completing bosses as a sign of unity…just so THEY can get ahead. Then, I was reading about Sunoco who is totally getting out of refining and going into retail gas sales.
Sure, the cash is going to be retail because of the resulting crunch that is being self-induced!
They say something like ‘You take our credits away, and we’ll take the gas away.
You just watch us! We have a God-given right to make obscene profits! And ask us if we care what this will do to inflation in a recession?’

If Obama wants to help, he needs to take his dictatorial plan and can it. He then needs to get the bosses together in a summit.
He should let THEM tell him what to do, because really isn’t Obama merely a representative anyway? He needs to get the bosses union-strike mentality turned positive and patriotic, instead of resistant. As long as they’ve
all discovered each other and are grouped up, may as
well have them all rallying around something constructive
for the nation.

Posted by limapie | Report as abusive
 

To fight against unemployment/joblessness, a country, in the modern age of our time does not need spending here and there including schools etc., rather private sectors concerning to industries and agricultural farming need to be encouraged to establish more and more of them and thus adequate number of jobs would be created in those newly formed projects and the economy of the country would be enhanced.

Posted by Shamsray | Report as abusive
 

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