Stimulus Fuzzy Math; Warren Buffet Buys Railroad
CHETRY: Welcome back to the Most News in the Morning. Christine Romans is "Minding Your Business" for us now. And we're talking billions and billions and billions of dollars and Warren Buffett. Those two go together, don't they?</s>CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Yes. It's the biggest acquisition by Warren Buffett's Berkshire Hathaway in the country's history. It's buying Burlington Northern, the railroad company. And Warren Buffett coming out, I love one of the comments in his press release. Warren Buffett basically said, our country's future prosperity depends on having an efficient, well-maintained rail system. America must grow and prosper for railroads to do well and he said this is an all-in wager on the economic future of the United States. I love these bets. It is a $34 billion dollars investment in his company and he is also acquiring a $10 billion dollars in debt obligation, so overall, about a $44 billion deal. A very big deal for this one. The stock is up. He's going to pay $100 a share for Burlington Northern. And that stock is up in the premarket. Futures, overall, are still down a little bit, but this is -- a lot of people are talking about it because it is, you know --</s>ROBERTS: Wow, when was the last time you heard of somebody wanting to buy a railroad?</s>ROMANS: Yes. An all-in wager.</s>CHETRY: A monopoly game.</s>ROMANS: The 32,000 miles of railway...</s>ROMANS: That's right. That's right.</s>ROBERTS: I noticed he's not buying Amtrak, though.</s>ROMANS: That's true. So, we'll be talking about this on the floor. A very big deal from Warren buffet.</s>CHETRY: Pretty cool.</s>ROMANS: Yes. Also talking about stimulus jobs. Want to do a little bit of stimulus math.</s>ROBERTS: You had a roman's numeral.</s>ROMANS: I did. Earlier this morning...</s>ROBERTS: Which was somewhat controversial.</s>ROMANS: Okay, 248,000 is the "Romans' Numeral" from earlier. I got so many e-mails and twitter responses. There is this obsession with quantifying the cost to taxpayers of those stimulus jobs, right? All these jobs and cost counting, it might be more politic</s>ROBERTS: First of all, lay out the scenario here for those at home who missed it.</s>ROMANS: Okay, I brought it out here. The administration says 640,000 jobs have been saved or created that is based on $159 billion in contracts for states for roadwork, bridges, to keep teachers in classrooms. Using very simple math, that means taxpayers have spent about $248,000 per job that the White House says were saved or created. 248 - And many of you were just outraged by this number.</s>ROBERTS: So each job costs $248,000...</s>ROMANS: Or taxpayers spent that much for that job that is on the book. Critics of the stimulus, though, say, it shows the taxpayers are getting a super raw deal here. But like everything else surrounding the stimulus, it's a little more -- it's not quite as simple as that. And a White House economist told ABC in a couple of days ago that that math is calculator abuse. Why? Well, these are just jobs created to date. These projects will keep creating more jobs, so the cost per job number will likely go down over time. Yes, that's true. The money obviously is not simply down the drain. Many of you said, why didn't you just give this money to me? Why did you give it to somebody else? I would have done something with it. Well, it's not just throwing the money away. It's creating economic activity, wages, also the supplies are ordered, materials are manufactured, equipment rental, all of this stuff. Now, the White House has its own formula for this number. Once the stimulus is fully deployed and working, we have reported this number to you many times, taxpayers will have spent $92,000 per job year, as the White House says. Because it's not necessarily one person, one job, per year. And then you could see that tax cuts, that's about $145,000 in tax cuts to be equal to one job year. And fiscal relief, about $116,000. So, supporters of the stimulus, they want to highlight new and saved jobs with this money. Critics of the stimulus want to say, it's just money down the drain. Look at how much money it's costing. I'll tell you one thing, the politics around this math -- is it math or politics -- I'm not sure. It's both when you talk about stimulus, it's very politically charged and people, both Democrats and Republicans look at these numbers and say, look, I was right. Anyway, more on that...</s>ROBERTS: It's the great thing about numbers, you can tweak them anyway you want.</s>ROMANS: And what did Mark Twain say? Statistics, statistics, lies, lies...</s>ROBERTS: Statistics. Lies, lies. Damned lies and statistics. Yes. All right, thanks.</s>CHETRY: Well, you know what, we can't get as much clarity as we want about that, maybe we can get some clarity on what is dangerous and what is safe for our children. A pediatrician tapping into a lot of the questions that mothers and fathers ask her all the time. Is this safe for my kids? Is this safe for my kids? She answers some of them. We're talking about vaccines, cell phones, certain foods, swine flu shots. She joins us, coming up. Twenty-six minutes past the hour.