After learning about Alberto Alesina, it was disappointing to read James Warren?s piece in Bloomberg Business Week extolling the virtues of federal stimulus spending.

Rich DeNormandie is the fifth generation of his family to run a South Side Chicago commercial laundry?and the first to take a government handout. Since April he’s used federal stimulus funds to hire six workers at $10 an hour each, even though business from key restaurant and hotel clients is down. He doesn’t follow politics closely and didn’t vote in the 2008 Presidential election. When money was offered via the state’s “Put Illinois to Work” program, he felt hiring the six unemployed women was the right thing to do. “I got some new faces in here and introduced them to the business,” says DeNormandie amid the drone of industrial washer-dryers and folding machines. “If the economy comes back, two or three may stay for good.”

Note that Warren makes no mention of the fact that DeNormandie was able to ?do the right thing? only because government took money away from the private sector for use in the stimulus package.

In other words, while DeNormandie was able to hire six unemployed workers for jobs that might not be necessary (especially if only two or three of them ?may stay for good?), the government prevented money from flowing through free-market processes to the business ventures where it would have done the most economic good.

Roy Cordato has explained for us the problem with stimulus spending.