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Today, President Obama called on Congress to pass $5 billion in energy manufacturing credits, once again urging Congress to borrow and spend because, as he put it, “There aren’t enough tax credits to go around.”

Taxpayers should take note that last August, the federal government picked out a group of politically favored energy programs and funneled $2.4 billion in government grants to them, yet job creation nationwide is weak at a post-recession time when it would normally be strong.

The President pointed with pride to what he called the success of last August’s giveaway. “We received 500 applications requesting over $8 billion in tax credits. But we only had $2.3 billion to invest. In other words, we had almost four times as many worthy requests as we had tax credits.” The President seemed to think his audience would be impressed that when the government offers free money, many companies will ask for it.

On a tour yesterday to view the results of this spending he spoke in front of employees of Smith Electric Vehicles in Kansas City, MO, and pointed out that “There is a thriving enterprise here instead of an empty, darkened warehouse.”

The problem with these initiatives is that it is very easy to point to a few visible jobs that are created by a big government spending program and to brand the program a success. It takes candor to admit that by diverting billions of dollars into these targeted companies, jobs are lost or destroyed elsewhere in the economy.

Furthermore, when the government’s political priorities change, causing it to pull preferential funding for pet projects, one of two things can happen: either the unsustainable government-created jobs will be destroyed; or the industry will thrive without the funds, proving in most people’s eyes that they could have succeeded without the government funds in the first place.

Under President Bush, hydrogen car technology was given preferential treatment whereas Obama has slashed money from that project to concentrate funds on his favored high-tech companies. The to and fro of funds from project to project continually misallocates capital for political reasons, and it demonstrates that both parties arrogantly think the government can “create jobs” and knows better than the market where investment should flow. We need leaders with more humility and candor about the economy and government’s limited ability to steer it.

It’s pretty frustrating watching Michael Gove announce cuts to the school building programme.

Seven hundred communities will not get the schools they need.

As Andrew Rawnsley in the Observer puts it:

The furore around Michael Gove ought to serve as a caution to his colleagues. It illustrates how easy it is to swagger your machismo as an axeman when you are talking abstract percentages and how hard it is when you have to bring down the blade. It is one thing to type some numbers into a Whitehall spreadsheet and quite another to translate them into real cuts to real services used by real voters.

The turbulence around the education secretary is but a light squall compared to the dark tornadoes of trouble coming over the horizon.

Oh, so true.

But what is worse none of this is needed. As the Green New Deal has shown now is the time for serious investment not the time for cuts. Cuts will increase the size of the government deficit. Investment would reduce it.

Yes I know that sounds perverse,  but remember first at last one Nobel laureate agrees and second,  were talking about a country here, not a company or a household. Countries are very different beasts and basically work the opposite way to companies and households. So if a company sacks someone the cost has gone away. If a country sacks someone the problem is still there, but now its not doing anything useful to pay its way. And that makes them more costly than when they ere employed.

Confusing? Maybe. But right, all the same. And thats why the ConDems are going to be offering trauma for no good reason at all. Unless William Keegan is right when he wrote today confirming another argument I have presented here which he summarises as follows:

Now, I have never been a believer in the politics of envy, but it seems to me that, from the insouciant way they are going about the cuts, and the savagery of their approach to the public sector, the coalition is in danger of reviving an old-fashioned class war.

I have no doubt: the only explanation for this is class war, but by those with privilege on the rest.

And that makes it particularly sickening.