[ed_note]We received this today from Mike Stopa, candidate for 3rd Congressional District Representative[/ed_note]
Candidate for congress in the third district of Massachusetts, Mike Stopa, said today that public investment portions of the stimulus bill were a â€œsabotageâ€ of the economy. Writing in the MetroWest Daily News on Wednesday, August 11, 2010, Stopa argues that the economy is entering into a double dip recession, although he says that it is more properly called â€œa single deepening recession with the mirage of recovery in the middle from a spike of largely useless spending.â€
Stopa is running to replace incumbent James McGovern , who was first elected to Congress in 1996. He is a nanotechnologist and a member of the Physics Department at Harvard University. He describes himself as a â€œReagan conservativeâ€ and has written extensively about economics, illegal immigration and terrorism. His web page is www.stopaforusrep.com.
In his op ed piece, Stopa discusses the quarterly report on the American Recovery and Reinvestment Act (or ARRA, i.e. the stimuls bill) , released on July 14 by Christina Romer and the Presidentâ€™s Council of Economic advisors. Stopa concludes that rather than stimulating the economy, the â€œpublic investmentâ€ portions of the bill have helped to crowd out private investment and have thereby â€œsabotagedâ€ the recovery.
â€œThe big recipients for public investment include community health centers, construction projects, broadband access, environmental cleanup and, especially, wind energy.
This quarter’s ARRA report boasts that 6,000 megawatts of wind capacity have been produced from the stimulus funds. It does not mention that the national demand for energy has been decreasing for two years in a row. In fact, the report has scant mention of demand at all. The report stresses the “co-investment” character of much of the stimulus spending, claiming that $3 of mostly private capital are drawn into wind energy investment for every $1 of public outlays. The report claims that this private capital comes from a place called “the sidelines.” This is evidently a place for unused money.
Even the most optimistic projections for wind power do not assert that it will be competitive in the market place, without subsidy, in the near future. Therefore, the Obama Administration is, in a market of declining demand, subsidizing a more expensive form of energy by around $90B and drawing in another $270B of private money that could be used for other, more demand-driven investments. In the process, the subsidized industry drives up the cost of labor (e.g. engineers) and other “factor prices” (e.g. office space), increasing the cost of both new investment and existing business. This is not stimulus, it is sabotage.â€
The full article is available at the Metro West Daily News.