The Other McCain

"One should either write ruthlessly what one believes to be the truth, or else shut up." — Arthur Koestler

Pointing Out the Obvious: They Don’t Teach Economics at Harvard Law School

Posted on | June 15, 2011 | 77 Comments

Conveniences you’ve enjoyed for decades have suddenly become a cause of long-term unemployment:

“There are some structural issues with our economy where a lot of businesses have learned to become much more efficient with a lot fewer workers. You see it when you go to a bank and you use an ATM, you don’t go to a bank teller, or you go to the airport and you’re using a kiosk instead of checking in at the gate.”
– Barack Obama

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The president is attempting here to offer a simplistic explanation of the difference between cyclical unemployment and structural unemployment. As important as that distinction is, however, it fails to explain many obvious things about this recession.

Unemployment isn’t at 9% because of out-of-work bank clerks and airline ticket agents. Unemployment is most severe in construction trades and other housing-related sectors. Whatever else Obama’s policies have done, they have not led to a meaningful recovery of the housing market and, one might easily argue, have made things much worse. Why? Because for two years, the administration and Democrats in Congress did everything possible to impede the foreclosure process, to keep deadbeats in homes they can’t afford. This has slowed re-sales, prevented mortgage lenders from cutting their losses on bad loans and, in general, hindered the kind of price “re-set” necessary to making the housing market efficient again.

Something else: The recession is not equally bad everywhere. Why is unemployment nearly 12% in California but less than 6% in Oklahoma? Don’t people in Oklahoma use ATMs and automated airline ticket kiosks?

Finally: ObamaCare places mandates on employers to provide health insurance to their employees. And by so doing, it increases the cost of hiring people. Whenever government policy makes something more expensive to do, people will do less of whatever that something is, and ObamaCare is a classic example of that. It’s like a good news/bad news joke: The good news is, your employer is now required to provide you health insurance. The bad news is, you ain’t got a job.

You don’t have to be a genius to figure out why Obamanomics doesn’t work. It’s one of those things that is so obvious that it takes a special kind of stupid not to see it.

And I guess they teach that special kind of stupid at Harvard.

UPDATE: Professor William Jacobson (who teaches at Cornell, not Harvard) explains that the President’s perspective “is a perfectly static view, which would have protected jobs in the buggy whip industry by preventing the creation and expansion of the auto industry; would have protected jobs at glass tube manufacturers against the advent of flat screen televisions; would have barred the creation of the cell phone industry because of all the jobs lost in the land line business, and so on and so on.”

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Category: Barack Obama, Economics

Comments

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  • Anonymous

    That’s disappointing the straw man in oz was flammable.

  • Anonymous

    I can assure the Putrid Fetid Rotted Dingbat that I am not acting.

  • http://twitter.com/AaronWorthing Aaron Worthing

    Even though I went to a rival school, honor forces me to stick up for harvard law.  yes, they do teach economics.

    http://lsr.nellco.org/harvard_olin/

    In fact the theory of law known as “law and economics” was invented to a significant extent by Oliver Wendell Holmes, a famous jurist and Harvard professor.

  • Debbie Wasserman Shultz

    We Democrats own the economy! 

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  • JeffS

    God darnit, Mr. Dave, you use your tongue prettier than a twenty dollar whore!

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  • guest

    here in southern California they are trying to break the back on any grocery store that has self check out kiosks by taking away their beer and alcohol sales. Because of the children… which is a lie, because everyone who has bought a beer at a self checkout here knows that your checkout gets frozen until the person in charge of the kiosk checks your ID… or in my case I’m as old as their grandpa, so they very nicely clear my kiosk for payment

  • http://thepagantemple.blogspot.com/ ThePaganTemple

    You know who’s got good vision compared to Obama? Ray Charles.

  • Anonymous

    Tempting.

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  • http://thecampofthesaints.org Bob Belvedere

    STFU.

     

  • http://thecampofthesaints.org Bob Belvedere

    STFU.

     

  • http://thecampofthesaints.org Bob Belvedere

    STFU.

     

  • http://thecampofthesaints.org Bob Belvedere

    STFU.  You can be charged, you know, with impersonating The Admiral Of The Afghan Seas – that’s a first-class felony, Anamika.

     

  • http://thecampofthesaints.org Bob Belvedere

    How dare you leave out womyn and transgenders!

  • http://thecampofthesaints.org Bob Belvedere

    Spot-on.  But it’s always important to remember that he didn’t come up with the plan [and to remember that when you hear one of his comrades carry-on like a school girl with a crush about how smart he is].  He’s just regurgitating the same old bromides and puking the same tired pablum that Marxists have been spewing all over the Western Landscape for two centuries, since the French Revolution.

  • http://thecampofthesaints.org Bob Belvedere

    Oh!  You’re waxing rather eloquent, Adobe.

  • http://thecampofthesaints.org Bob Belvedere

    I’ve always found it ironic that the Progressives are, in fact, in reality, Regressives, who would see us living like the Noble Savage dreamed of by Rousseau.

  • http://thecampofthesaints.org Bob Belvedere

    Actually, just examine any graduate of Harvard Law.

  • http://thepagantemple.blogspot.com/ ThePaganTemple

    Only half of us. The other half of us they want to go ahead and die for the sake of Mother Gaia. Then the leftists can sit back and enjoy their leisure time while the half of us that survive can get to work cleaning up the mess and otherwise working for their benefit.

    That’s the real horrible truth about the progressive movement, and socialism, and all other leftist ideologies. Stripped down to its core, its nothing more nor less than a return to feudalism with the leftist elites reaping the rewards once relegated to the nobility.

  • http://thecampofthesaints.org Bob Belvedere

    Good point. I should have been more clear that the Regressive result was
    for the majority of us and not for The Illuminated Ones.

  • Anonymous

    Thankyou.

  • http://twitter.com/Always_On_Watch Always On Watch

    Gah!

    There’s no nice way to put this: Obama is a dumb ass when it comes to almost every issue.

    He doesn’t have a clue about economics.  In fact, it’s worse than that.  He doesn’t give a damn about our ailing economy or the causes thereof.  After all, he’s sitting at the top and untouched by the facts on the ground.

    We’ve never had a more incompetent President.  Never.  He’s Jimmy Peanut on crack — possibly, literally so. 

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  • Aussie54

    those Keynesian disciples cannot fix the economy because they fail to consider stagflation and how big spending government is probably the no 1 cause of stagflation and its prolongation.

    I studied economics at university in the 1970s. The emphasis was on Keynesian economics. However, during that time they started teaching about stagflation for the very first time. They did not really understand why we had those conditions: high unemployment, high inflation and high interest rates.

    The same conditions exist today (except interest rates are not high like they were in the 1970s and the 1980s), and we are heading for stagflation again. Some of the factors that were not considered as culprits were:
    1. union demands for higher wages. In Australia we had lots of strikes in the 1970s.
    2. Cost-push inflation. In other words the higher wages fuelled the inflation.
    3. Government was taking a big splice of the money available for investment via taxes and borrowings.

    Today the cost-push inflation is not being fuelled by demands for higher wages, although those demands exist, but by increases in the cost of utilities which are being driven up by government regulation and the Watermelon aka Green agenda.

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