Month: July 2010

In which she explains that unemployment checks create jobs:

“Now, let me say that 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 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, but it also is a job-creator and so, uh, for that reason — for those two reasons at least — it should be passed, and I’m optimistic that it will.”
— Nancy Pelosi, July 1, 2010

This sort of gobbledygook is the logical end-point of Keynesian economics, with its obsessive focus on demand-side inputs — including government redistribution programs — whereas a far more effective stimulus to economic growth is capital investment, a/k/a, the supply side.

Also, notice the predictable demagoguery: At the end, she says, “It’s impossible to think of a situation where we would have a country that would say we’re not going to have unemployment benefits.” But nobody is talking about eliminating unemployment benefits. The measure Pelosi is arguing for would extend benefits for those who’ve already maxed-out at 99 weeks:

Democrats have been trying for more than a month to pass a bill extending jobless benefits to more than 1 million people. Currently, jobless benefits last nearly two years — up to 26 weeks paid by state treasuries with federal help for up to an additional 73 weeks.

However sympathetic one may be to such people — hey, it’s tough all over — it is simply absurd to say that giving them another 13 or 26 weeks of unemployment checks is the way to “create jobs.”

(Via Hot Air Headlines and Memeorandum.)

UPDATE: Ed Morrissey plays “Let’s Count the Straw Men” with Nancy’s argument, and makes reference to the latest unemployment numbers:

The United States added just 83,000 private-sector jobs in June, a dishearteningly low number that could add to the growing number of economists who warn that the economic recovery is stalling. . . .

(That was no “recovery.” That was a dead-cat bounce.)

The economy needs to add about 130,000 to 150,000 jobs a month just to keep pace with new workers entering the market. The labor pool is already packed with 15 million Americans looking for work. . . .

(A solid argument for reducing illegal immigration.)

The week or so leading up to Friday’s report offered a grim rat-a-tat-tat of statistics pointing to a slowing economy. Auto sales were off more than expected, as sales plunged 30 percent in May, a far greater drop than expected. And unemployment claims rose by 13,000 to 472,000, which is far higher than usual if one is looking for signs that private payrolls are growing in a sustained fashion. . . .

(Why would you be “looking for signs”?)

The Obama administration has put much political currency into its effort to grow the economy, and most to the point, jobs. Only a month ago, after an April jobs report that showed employers added 290,000 jobs — a number revised Friday to 313,000 — President Obama declared the numbers “particularly heartening.”
And just two weeks ago, Vice President Joseph R. Biden Jr. christened this “Recovery Summer,” with an emphasis on the jobs created by the administration’s $787 billion economic stimulus measure passed in February 2009.

“Recovery Summer” is withering on the vine. Instead of seeking advice from Nancy the Job-Creator, how about recalling that I predicted this failure from the outset?