As the second week of 2014 ends and New Jersey politics takes up the news cycle, it appears that a telling moment was lost in the mix. President Obama’s speech on Wednesday used bizarre logic on an audience that would lead listeners to think: “Hey, if we only had more unemployed people for a longer period of time we’d really be setting the stage for a comeback!”
We make this promise to our fellow Americans who are working hard to get back on their feet because when times get tough, we are not a people who say you’re on your own, we’re people who believe that we’re all in it together.
And we know, there but the grace of God go I. (Applause.) So that’s the values case for this. That’s the moral case for this. But there’s an economic case for it as well. Independent economists have shown that extending emergency unemployment insurance actually helps the economy, actually creates new jobs. When folks like Katherine have a little more to spend to turn up the heat in her house or buy a few extra groceries, that means more spending with businesses in her local community, which in turn may inspire that business to hire one more person, maybe Kathy (sp).
Kind of a strange line of thought, but Mr. Obama is careful with his words because at some point even people who aren’t too bright start to wonder how writing unemployment checks for 35, 45, or 55 weeks on end can translate into long-term economic growth.
Nancy Pelosi, on the other hand, is not so careful. It was only a few years ago that she went completely off the deep end:
“Now let me say about about unemployment insurance. We talk about it as a safety net and the rest. This is one of the biggest stimuluses [sic] to our economy. Economists will tell you this money is spent quickly, it injects demand into the economy and it’s job-creating. It creates jobs faster than almost any other initiative that you can name — because again it is money that is needed for families to survive and it is spent. So it has a double-benefit. It helps those who have lost their jobs and it also is a job creator.” — Nancy Pelosi, July 2, 2010.
Yes, that is a member of Congress was actually said that one of the fastest ways to create jobs is to cut someone an unemployment check for months at a time. If unemployment checks give the economy a “double-benefit,” maybe we should triple or quadruple the cash we’re handing out? Perhaps we can just cut all unemployed people a check for a million dollars and really get the economy roaring.
If the president was intellectually honest he would say something to the effect of, “Listen, these people are trying to find a job. That extra money will put food on the table. We have an obligation to help those who are trying to help themselves — even if it takes longer than we expected.”
Okay. Fair enough. Sounds reasonable. But instead, he actually tries to make it seem as though cutting checks will create the kind of economic environment where businessmen and entrepreneurs will take risks with their money, invest in durable goods and take on new hires. That is not true, and only people who spend the bulk of their lives in academic settings and inside the government say those sorts of things with a straight face.
There has been over $1 trillion of “stimulus” pumped into the economy over the past five years and the CBO projected that the true cost would be $3.27 trillion over the course of a decade. How much more is needed?
If you’ve never seen the EconStories videos on Hayek vs. Keynes, I highly suggest you watch them. Obama is a full-fledged Keynesian despite an epic track record of failure.
Watch the videos and then read Hayek’s “The Road to Serfdom” when you get a chance. You’ll be glad you did.
Nancy Pelosi is back, and if you don’t want to extend unemployment benefits then you’re a perpetrator of “Economic Violence.”
Our old feminist friend Suey “only white people can be racist” joins the trending hashtag fun, and she’s confusing Jim Carrey’s lines from Dumb and Dumber with serious intellectual discourse. There aren’t any jobs in this town…“unless you want to work 40 hours a week!”