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Author Topic: Harvard study finds increased gov’t spending results in unemployment  (Read 2616 times)

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Offline dandi

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Harvard study finds increased gov’t spending results in unemployment
« on: May 27, 2010, 04:20:20 PM »
DUmbasses in denial.

Quote
bik0  (329 posts)        Thu May-27-10 04:30 PM
Original message
Harvard study finds increased gov’t spending results in unemployment
 Edited on Thu May-27-10 04:33 PM by bik0
The right wingers are all over this... no mention in the liberal blogs though...

Recent research at Harvard Business School began with the premise that as a state’s congressional delegation grew in stature and power in Washington, D.C., local businesses would benefit from the increased federal spending sure to come their way.

It turned out quite the opposite. In fact, professors Lauren Cohen, Joshua Coval, and Christopher Malloy discovered to their surprise that companies experienced lower sales and retrenched by cutting payroll, R&D, and other expenses. Indeed, in the years that followed a congressman’s ascendancy to the chairmanship of a powerful committee, the average firm in his state cut back capital expenditures by roughly 15 percent, according to their working paper, “Do Powerful Politicians Cause Corporate Downsizing?”

“It was an enormous surprise, at least to us, to learn that the average firm in the chairman’s state did not benefit at all from the unanticipated increase in spending,” Coval reports.

http://hbswk.hbs.edu/item/6420.html


From the report...


VI. Conclusion

This paper provides a new empirical approach for identifying the impact of
government spending on the private sector. Using changes in congressional committee
chairmanship as a source of exogenous variation in state-level federal expenditures, we
find that fiscal spending shocks appear to significantly dampen corporate sector
investment activity.

Specifically, we find statistically and economically significant
evidence that firms respond to government spending shocks by: i.) reducing investments
in new capital, ii.) reducing investments in R&D, and iii.) paying out more to
shareholders in the face of this reduced investment opportunity set. Further, we find
that when the spending shocks reverse (through a relinquishing of chairmanship), most all
of these behaviors reverse. Finally, we also find some evidence that firms scale back their
employment, and experience a decline in sales growth.

Our findings demonstrate that new considerations — quite apart from the standard
interest rate and tax channels — may limit the stimulative capabilities of government
spending. Whether they are sufficient to lower the multiplier on fiscal stimulus in a large
economy such as the US remains an open but important question.

the report...

https://docs.google.com/viewer?url=http://www.people.hb...

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x8432004

No way!

Quote
aquart  (1000+ posts)      Thu May-27-10 04:33 PM
Response to Original message
1. Harvard Business School?
 Please.

Well, it's true they don't carry the gravitas of an anonymous poster on DU, but not everyone can rise to that level of genius.

Quote
villager  (1000+ posts)      Thu May-27-10 04:37 PM
Response to Original message
5. Yeah -- sure worked that way after the private sector crash of '29....
 If only FDR had been more like Hoover!
 
bik0  (329 posts)        Thu May-27-10 04:47 PM
Response to Reply #5
12. WW II is what pulled the U.S. out of the Depression...
 The unemployment rate in 1940 was 14%.
 
Commie Pinko Dirtbag  (1000+ posts)        Thu May-27-10 04:51 PM
Response to Reply #12
17. Ah, I see you have the complete set of talking points, not just one. 
 And you use them with gusto.

I'm waiting for "welfare queens" to make an appearance.
 
 villager  (1000+ posts)      Thu May-27-10 04:56 PM
Response to Reply #17
21. Apparently, he does -- a pro-war, anti-New Dealer! 
 though actually, World War II might count as "government spending" in some books, too! 
 
 bik0  (329 posts)        Thu May-27-10 04:57 PM
Response to Reply #17
22. Standard DU retort when confused and disoriented by facts...
 label 'em as a wingnut.

bik0 learns fast. Probably not fast enough to dodge a tombstone, though.

Quote
EFerrari  (1000+ posts)        Thu May-27-10 04:38 PM
Response to Original message
6. It's Harvard. What else are they going to "find"?

Quote
Peacetrain  (1000+ posts)        Thu May-27-10 04:43 PM
Response to Original message
11. Harvard Business,, isn't that the same school that gave Bush his MBA
 and GOD knows how great a businessperson he turned out to be..and what he did to every buisness he touched much less the United States..

Think I will take that one with a grain of salt

Quote
KonaKane (1000+ posts)      Thu May-27-10 04:50 PM
Response to Reply #11
15. Good point. So much for their credibility.

Weren't a lot of DUmmy heroes educated at Haaaaaavahd?
 
 
 
 


 
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Offline SSG Snuggle Bunny

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Re: Harvard study finds increased gov’t spending results in unemployment
« Reply #1 on: May 27, 2010, 04:29:09 PM »
Obama's latest SCOTUS nominee was a Harvard dean.

Obama himself as well.
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Offline miskie

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Re: Harvard study finds increased gov’t spending results in unemployment
« Reply #2 on: May 27, 2010, 04:32:53 PM »
Quote from: dandi on May 27, 2010, 04:20:20 PM
DUmbasses in denial.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x8432004

No way!

Well, it's true they don't carry the gravitas of an anonymous poster on DU, but not everyone can rise to that level of genius.

bik0 learns fast. Probably not fast enough to dodge a tombstone, though.

Weren't a lot of DUmmy heroes educated at Haaaaaavahd?

Presidents with Harvard educations (any school, including undergraduate)

John Adams
John Quincy Adams
Rutherford B. Hayes
Theodore Roosevelt
Franklin D. Roosevelt
John F. Kennedy
George W. Bush
Barack Obama

Sure primitives, go ahead and bash Harvard, since there was a study done with disagreeable results. Frankly I'm surprised they published this at all, so kudos for them for a moment of intellectual honesty.
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Offline Tucker

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Re: Harvard study finds increased gov’t spending results in unemployment
« Reply #3 on: May 27, 2010, 04:34:49 PM »
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blogslut  Donating Member  (1000+ posts)  Journal  Click to send private message to this author  Click to view this author's profile  Click to add this author to your buddy list  Click to add this author to your Ignore list      Thu May-27-10 04:34 PM
Response to Original message

2. And you bring it here

So it's not true if you don't know about it. Sheesh!!!
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Come to think of it, unions do create jobs. Companies have to hire two workers to do the work of one.

Offline Chris_

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Re: Harvard study finds increased gov’t spending results in unemployment
« Reply #4 on: May 27, 2010, 04:39:24 PM »
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Commie Pinko Dirtbag  Donating Member  (1000+ posts)
Thu May-27-10 05:19 PM
Response to Reply #31

34. Excellent female-dog-slap!
:jerkit:
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Offline Duke Nukum

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Re: Harvard study finds increased gov’t spending results in unemployment
« Reply #5 on: May 27, 2010, 04:41:12 PM »
Quote
villager  (1000+ posts)      Thu May-27-10 04:37 PM
Response to Original message
5. Yeah -- sure worked that way after the private sector crash of '29....
 If only FDR had been more like Hoover!

Actually, FDR pretty much just used Hoover's policies claiming them as his own, which is probably why the depression dragged on so long.
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Offline jukin

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Re: Harvard study finds increased gov’t spending results in unemployment
« Reply #6 on: May 27, 2010, 06:00:29 PM »
I think what pulled the USA out of the depression is when president FDR got on TV and told us about the crash of 1929.......that and when the Nazis bombed Pearl Harbor.


I sure wish we had had Senator Blutarski instead of Biden.
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Offline The Village Idiot

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Re: Harvard study finds increased gov’t spending results in unemployment
« Reply #7 on: May 27, 2010, 06:07:15 PM »
That result is obvious to anyone with a few braincells.
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Offline DefiantSix

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Re: Harvard study finds increased gov’t spending results in unemployment
« Reply #8 on: May 27, 2010, 06:10:34 PM »
Quote from: FGL on May 27, 2010, 06:07:15 PM
That result is obvious to anyone with a few braincells.

That excludes any long term - non mole - residents of $kinner's Island of Misfit ****-ups.
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Offline AprilRazz

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Re: Harvard study finds increased gov’t spending results in unemployment
« Reply #9 on: May 27, 2010, 06:51:43 PM »
Quote from: jukin on May 27, 2010, 06:00:29 PM
I think what pulled the USA out of the depression is when president FDR got on TV and told us about the crash of 1929.......that and when the Nazis bombed Pearl Harbor.


I sure wish we had had Senator Blutarski instead of Biden.
The Nazis bombed Pearl Harbor because Bush was too busy doing the alligator at a frat toga party. Obama would have disguised an armored car as a parade float and managed to show that deans wife how sensuous a cucumber could be.

Dear god I need to stop falling asleep after reading DU rants with the television on. :thatsright:
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Offline Ballygrl

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Re: Harvard study finds increased gov’t spending results in unemployment
« Reply #10 on: May 27, 2010, 07:08:29 PM »
Did we really have to waste money to do research on something that should be obvious? We've basically been saying that for years.
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Offline Karin

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Re: Harvard study finds increased gov’t spending results in unemployment
« Reply #11 on: May 28, 2010, 08:47:29 AM »
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ieoeja (1000+ posts)      Thu May-27-10 05:17 PM
Response to Original message
31. ...Because during good economic times the old businesses face more competition for labor from all the new business growth spurred by the gov't spending!
 

That exclamation point at the end is rubbing me the wrong way.  It's so...so.. skittles and rainbows I guess.  Of course we know that new business is started by private investment, primarily.  In contrast, I was reading an article in Weeky Std about part of the Stimulus Porkulus.  It funded a study to examine the effects of drinking malt liquor and smoking pot at the same time.  I kid you not.  Really. 

Not word one was said over there about Obama going to Harvard. 
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Offline The Village Idiot

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Re: Harvard study finds increased gov’t spending results in unemployment
« Reply #12 on: May 28, 2010, 08:50:22 AM »
idiot thinks gov't spending causes economic growth?? really? I seriously doubt many of them really think that any more.
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Offline USA4ME

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Re: Harvard study finds increased gov’t spending results in unemployment
« Reply #13 on: May 28, 2010, 08:52:59 AM »
Quote from:
bik0

WW II is what pulled the U.S. out of the Depression...

The unemployment rate in 1940 was 14%.

Quote from:
Commie Pinko Dirtbag

Ah, I see you have the complete set of talking points, not just one.  

And you use them with gusto.

CPD is an idiot.  I've heard depression era citizens make the point for years that WW2 is what pulled the USA out of the depression, and it's true.  Of couse, CPD can't believe the truth because it isn't in line what what he's been told to believe.  He's too busy not helping the poor in Brazil to take the time to learn anything.

.
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Offline The Village Idiot

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Re: Harvard study finds increased gov’t spending results in unemployment
« Reply #14 on: May 28, 2010, 08:54:33 AM »
Quote from: USA4ME on May 28, 2010, 08:52:59 AM
CPD is an idiot.  I've heard depression era citizens make the point for years that WW2 is what pulled the USA out of the depression, and it's true.  Of couse, CPD can't believe the truth because it isn't in line what what he's been told to believe.  He's too busy not helping the poor in Brazil to take the time to learn anything.

The depression didn't officially end until 1946. AFTER the war, or after FDR passed on, whichever. The end of the war and the end of FDR's ludicrous economic policies is what ended the depression.
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Offline USA4ME

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Re: Harvard study finds increased gov’t spending results in unemployment
« Reply #15 on: May 28, 2010, 09:25:31 AM »
Quote from: FGL on May 28, 2010, 08:54:33 AM
The depression didn't officially end until 1946. AFTER the war, or after FDR passed on, whichever. The end of the war and the end of FDR's ludicrous economic policies is what ended the depression.

I suppose the main point is the war put people back to work.  It dropped from 14.6% in 1940 to 1.9% in 1943.  Had it not been for the war, nothing FDR had cooked up would have ever got unemployment down.

.
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Offline delilahmused

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Re: Harvard study finds increased gov’t spending results in unemployment
« Reply #16 on: May 28, 2010, 10:37:01 AM »
Quote from: AprilRazz on May 27, 2010, 06:51:43 PM
The Nazis bombed Pearl Harbor because Bush was too busy doing the alligator at a frat toga party. Obama would have disguised an armored car as a parade float and managed to show that deans wife how sensuous a cucumber could be.

Dear god I need to stop falling asleep after reading DU rants with the television on. :thatsright:

But it would've been a parade float for the gay freedom day parade protesting DADT with "In the Navy" blasting from the speakers.

Cindie
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