Filed under: Capitalism, Economy, History, Progressivism, Taxes | Tags: "Truthiness", Keynesian Economics, Press Secretary Jay Carney
Yesterday there was a priceless exchange between the hapless Obama administration press secretary Jay Carney, and Laura Meckler, correspondent for the Wall Street Journal. It is a perfect illustration of the chasm between the two parties. Progressives firmly believe in Keynesian economics. Franklin Delano Roosevelt believed in Keynesian economics, and, Democrats believe, saved the country with his extravagant spending during World War II. Well, no he didn’t.
This is a splendid example of “truthiness” (the word of the year a few years back). It is defined as the quality of preferring concepts or facts one wishes to be true, rather than facts or concepts known to be true.
Here Mr. Carney accepts as truth the idea that putting money into the economy creates a “multiplier effect”due to the velocity of money moving through the economy. It has been proven wrong over and over, for the past 2½ years, and for all the years between now and 1944, but remains an article of faith among progressives. Nancy Pelosi has made the same silly argument. It defies common sense to assume that you can take a dollar out of a taxpayer’s pocket, pass it through the government adding costs along the way, and by giving it to an unemployed person who will spend it, that act somehow multiplies the dollar as it moves from one hand to the next.
Carney is so sure of himself that he feels free to patronize Laura Meckler. And goes on to demonstrate the truthiness of the administration’s economic policies. So sure of themselves, so arrogant, so resistant to learning.
Meckler: I understand why extending unemployment insurance provides relief to people who need it, but how does it create jobs?
MR. CARNEY: Oh, it is by — I would expect a reporter from the Wall Street Journal would know this as part of the entrance exam just to get on the paper — (laughter.) But the — no, seriously. It is one of the most direct ways to infuse money into the economy because people who are unemployed and obviously aren’t earning a paycheck are going to spend the money that they get. They’re not going to save it; they’re going to spend it. And unemployment insurance, that money goes directly back into the economy dollar for dollar virtually. So it is — and when it goes back in the economy, it means that everywhere that those people — everyplace that that money is spent has added business. And that creates growth and income for businesses that then lead them to making decisions about job — more hiring.
So there are few other ways that can more directly put money into the economy than providing unemployment insurance.
Meckler: And why since it’s been extended have we seen unemployment not drop, in fact?
MR. CARNEY: Well, look, this is “what would have happened” argument. But we have seen is, what is it, 2.4 million private sector jobs created. And this year there’s — I mean, again, this is not just — I encourage you, and I know that you all have good contacts in that world, but economic analysts wholly unaffiliated with this administration would tell you, and told you back late last year, that the combination of the payroll tax cut and extension of unemployment insurance would have a direct, measurable impact on job creation, so that of the jobs created this year, a certain number — however many tens or hundreds of thousands of jobs — can be attributed to those actions taken and pushed by the President last year, which is why he feels so strongly they ought to be done again as we continue to emerge from this recession.
So that’s why he believes very strongly we ought to extend the payroll tax and extend unemployment insurance.
Meckler: And is the best argument that you can put forward to people for these things that if we do this again, it won’t necessarily get any better, but it won’t get any worse –
MR. CARNEY: Laura, you know that’s not how it works. You know that we have to do a variety of things to grow the economy and create jobs. This is one thing that economists of all stripes agree will directly affect growth, and a half percentage point, I believe, in growth is what economists estimate the payroll tax cut would provide. Is it half? Plus the UI? Something like that. Anyway, there’s — and up to a million jobs. So we do that, and we have that positive impact next year.
That doesn’t mean that’s the only thing we do. And obviously, there are other economic factors that, as we’ve seen this past year, some which we can control and some we can’t. I mean, we can’t — we cannot estimate what a natural disaster that might happen next year, what impact it might have on the global economy. But we can take action that does have a direct impact.
The Progressive wing of the Democrat party has become so partisan that any idea expressed by a Republican is assumed, automatically, to be a lie. This has been an enormous hurdle for President Obama, who clearly came into office hating President Bush and all his policies. He was sure that the detainees at Gitmo were innocents, unjustly held by the Bush administration so they could torture them. The Bush people warned them that the detainees were the worst of the worst, and that Guantanamo was the best solution for keeping them out of circulation.
Obama believed that the ban on embryonic stem cell experimentation and therapy was some kind of religious nutcase ruling. One of his very first executive orders was to lift that ban. He had, he claimed 22 people who were ready to be treated with embryonic stem cells immediately to be cured. Never heard from them again.
Republicans are, of course partisan as well, but they go for real evidence. Cutting taxes in a down economy is not, as progressives claim, a crazy religious belief held by Republicans, but proven by the evidence from the Coolidge administration, the Kennedy administration, the Reagan administration and the Bush administration. Republicans are hardly perfect. We are all human, but we must learn from experience and example, and from history. And we have to learn from our mistakes. Operating on the basis of what you wish to be true has a long history of failure and misery.
Filed under: Capitalism, Domestic Policy, Economy, Election 2012, Politics | Tags: Credit Downgrade, Insensitive and Unconcerned, Out-of-Touch
President Barack Obama is getting bad advice. If it were a matter of music, you would say that he has a tin ear. I’m not sure just what the phrase is here, but Mr. Obama seems utterly unconscious of the way some of his actions appear at a time when the nation is in dire economic peril.
The White House may not take the credit downgrade very seriously, but the people certainly do.
When several million of our citizens have been unemployed for over forty weeks, the president’s frequent assertion that jobs are his primary focus, as he then heads for the golf course, doesn’t sit well. You can scroll down to the Huffington Post’s example of “jobs, jobs, jobs;” “his primary focus:” “every waking moment” and the “pivot to jobs.” The president simply seems out-of-touch.
Richard Cohen, reliable Liberal at the Washington Post on Monday:
FDR was a Hudson River squire — down to his cigarette holder and cape. Nonetheless, he could connect to the less fortunate. Obama, in contrast, was raised in the great American muddle, not rich and not poor. Yet when the stock market fell more than 500 points last week and the image that night was of the president whooping it up at his birthday party, the juxtaposition — just bad timing, of course — seemed appropriate. He does not seem to care.
Liberal psychology professor Drew Westen in a long essay in the New York Times:
A second possibility is that he is simply not up to the task by virtue of his lack of experience and a character defect that might not have been so debilitating at some other time in history. Those of us who were bewitched by his eloquence on the campaign trail chose to ignore some disquieting aspects of his biography: that he had accomplished very little before he ran for president, having never run a business or a state; that he had a singularly unremarkable career as a law professor, publishing nothing in 12 years at the University of Chicago other than an autobiography; and that, before joining the United States Senate, he had voted “present” (instead of “yea” or “nay”) 130 times, sometimes dodging difficult issues.
Reliable Liberal columnist Dana Milbank at the Washington Post:
The economy crawls, the credit rating falls, the markets plunge, and a helicopter packed with U.S. special forces goes down in Afghanistan. Two thirds of Americans say the country is on the wrong track (and that was before the market swooned), Obama’s approval rating is 43 percent, and activists on his own side are calling him weak.
Yet Obama plods along, raising gobs of cash for his reelection bid — he was scheduled to speak at two DNC fundraisers Monday night — and varying little the words he reads from the teleprompter. He seemed detached even from those words Monday as he pivoted his head from side to side, proclaiming that “our problems is not confidence in our credit” and turning his bipartisan fiscal commission into a “biparticle.”
He reminded everyone that the default isn’t his fault; but his first thoughts were not for the Chinook crash and the agonizing loss of so many special forces, but for trying to avoid blame. “Mr. Cool Turns Cold” read the headline on Cohen’s piece. But there have long been examples of enormous insensitivity. It’s more than being out-of-touch.
Obama has consistently blamed George W. Bush for not only the financial crisis, but for the fact that his own presidency for two-and-a half-years has been hard. Victor Davis Hanson said it succinctly: “Most problems in the world preceded Bush.”
It’s not that we’re trying to point fingers to make sure Mr. Obama gets blamed for anything in particular, but isn’t there someone at the White House who can remind him that “this just doesn’t look good”, “You might want to look concerned here”, or simply “this is a very emotional issue for many people.” or “this big drop in the stock market hits a lot of ordinary people pretty hard, Mr. President.” Or aren’t aides allowed to say such things? Or are they just as clueless?
Well, the stock market tanked again, There are more riots in Europe, London is in flames, demonstrators shot in the Middle East, black youth flash mobs attacking innocent crowds and looting at the Wisconsin Fair and in Philadelphia. The nation’s credit rating has dropped and may drop again, and you don’t seem concerned, Mr. President. Only worried that you might be blamed, or that it might discourage donors to your campaign.
Filed under: Capitalism, Conservatism, Economy, Election 2012, Freedom, Politics
The empty podium. Tim Pawlenty has been an impressive governor of Minnesota. Nice ad.