"Talk to the small business in Phoenix that will triple its workforce because of the Recovery Act. Talk to the window manufacturer in Philadelphia who said he used to be skeptical about the Recovery Act, until he had to add two more work shifts just because of the business it created. Talk to the single teacher raising two kids who was told by her principal in the last week of school that because of the Recovery Act, she wouldn't be laid off after all."
The President wants us to buy into what I label the "NPR fallacy." If you listen to NPR in the mornings you know that NPR tells an inordinate amount of stories. We hear pieces about the plight of Guatemalan bean farmers struggling to deal with pollution, rice farmers in the Yellow River valley in China who are taking advantage of China's new economic liberalization, and a mother of a teenager joining Sadr's popular freedom fighters in Iraq. In short: NPR tells you stories that adhere to the progressive narrative and, in doing so, want you to think that those individual stories reflect or represent the lives of people generally. Applying this principle to the President, he wants you to think that there are tens of thousands of businesses just like the window maker who benefited from receiving direct stimulus money (or indirect money from people who received tax credits) for installing more energy efficient windows. The successful window maker is a result that you can see. What you can't see is the reduction in disposable income experienced by EVERY TAXPAYER whose tax dollars went to subsidize that particular company's operations. We also don't see the employees who worked for Obama's window maker's competitors who lost their jobs because their competitor had an unfair advantage - in essence, a government-created monopoly. We don't see the effects on the people whose taxpayer money went to tax credits for those of certain income levels who used those credits (i.e. other people's money) to purchase those energy efficient windows nor the effect that the tax credit had on the recipient of the credit who should have saved his money (since the tax credit probably didn't cover the entire purchase) for a rainy day or for his retirement or for his child's education. We also don't see the effect on the other companies who would have been the recipient of the tax credit recipient's dollars had that recipient not spent the money on windows. The less revenue paid to those other companies not engaged in the business of window making also leads to higher unemployment in those areas of business.
Also, the direct stimulus and tax credit money created an artificial demand for a product that people didn't think they needed prior to the government's payout for those windows. If the product was desirable, then people would have purchased it prior to the government's subsidization. Because people purchased more energy efficient windows than what they needed, just to access the government subsidy, they had less money to spend on toasters, tires, and calculators.
Moreover, Obama's speech doesn't show the impact that diverting resources (ex. glass, steel, plastic) to the manufacture of energy efficient windows had on the manufacturers of other products that require glass, steel, or plastic for their components. The government subsidies would have increased the demand for those raw materials and that increase in demand, in turn, would have increased the cost of manufacturing all products utilizing those raw materials. Because of the increase in the cost of production, the manufacturers would have to increase the price of their products to compensate. The result is that, not only are taxpayers subsidizing the windows with their tax money, they also have to pay higher prices for everything else they want to buy.
Unintended and often harmful consequences are the inevitable result of progressive economic policies.
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