PELOSI: “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 (I know, not a word) to our economy. Economists will tell you this money is spent quickly, it injects demand into the economy. It creates jobs faster than almost any other initiative you can name. Because, again, it is money 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 is also a job-creator. It is impossible to think of a situation where we would have a country that would say we’re not going to have unemployment benefits, and the only people who want them are people who don’t want jobs. That’s just so contrary to what our country is about, and I reject that misrepresentation of the motivation for people to be on unemployment insurance.”
This Ezra Klein post explains why liberals want direct government spending like unemployment benefits. It’s satisfying because you are providing help to specific people and it gives more immediate bang for the buck.
Unemployment benefits stimulate the economy if the alternative is jobless people who have no money to buy food and other necessities. On the other hand, unemployment benefits aren’t as good for the economy as people paying for what they need with income earned from jobs. But what if the jobs are lower-paying or equal pay to unemployment benefits, leading recipients to choose unemployment benefits? What should society encourage in that situation?
That issue doesn’t seem to be on liberals’ radar, and conservatives are portrayed as heartless and judgmental for raising it.
The unemployment rate dipped to 9.5% but only because more and more workers are leaving the pool:
“Private employers added a smaller-than-expected 83,000 jobs in June, but the unemployment rate edged down to 9.5% as many workers dropped out of a labor market that remains very sluggish.”
A dip in average hourly earnings suggests employers won’t add more workers in the short term, and the jobs that were added are low-paying, low-skill jobs … which isn’t good news for record numbers of college students.
President Obama says it’s good news but not good enough. But the longer we go without recovering jobs, the worse the economy looks.
“The extent of the damage in the second quarter — and for the year — is clear.
The S&P 500 index fell 11.9% during the quarter, snapping its four-quarter winning streak. During those three months $1.6 trillion in shareholder wealth evaporated based on the Wilshire 5000 index — a loss reminiscent of that suffered in the bear market that started in 2007. And the S&P 500 lost 7.6% this year to set a new low for 2010. That means the market is off to its worst start since 2002, when it fell 13.8% in the first half.”
The 2002 sell-off followed the 9/11 attacks, and the Bush Administration’s solution was job growth through tax cuts. The Obama Administration thinks job growth comes from government spending and increased taxes, even though Obama’s hand-picked Democratic Deficit Commission co-chair Erskine Bowles says spending cuts are vital. Here’s what Bowles is looking at:
Bloomberg-Business Week reports the House was scheduled to vote today on H.R. 5618 which would spend $33B to extend jobless benefits through November. The Washington Times reports GOP members blocked the extension, citing concern about the escalating deficit.
Hopefully this is the beginning of a Rick Santelli-style Stop Spending! trend, because it’s not helping Americans to bankrupt our nation.
[NOTE: I added "Extension" to the headline to make it more clear.]
The Financial Times reports the real reason Budget Director Peter Orzag left the Obama Administration:
“Mr Orszag, whom Mr Obama has dubbed a “propeller-head” because of his brilliant facility with projections and spreadsheets, has tried but failed to convince his colleagues to “step up the action”, according to one insider.
In particular, he has collided with the political team, led by Rahm Emanuel, Mr Obama’s chief of staff, over Mr Obama’s 2008 election pledge not to raise taxes on any households earning less than $250,000 a year – a category that covers more than 98 per cent of Americans.
Economists say that would put all the fiscal emphasis on draconian – and highly unrealistic – spending cuts, or else pushing the marginal tax rates on the very rich to confiscatory levels. “Peter feels strongly that this is a pledge that has to be broken if the President is to take a lead on America’s fiscal crisis,” says an administration official not authorised to speak on the matter.”
“As we speculated previously, the sudden and unprecedented departure of Peter Orszag, the day prior to the US Budget’s formalization (which incidentally never happened as now the US will likely not have a 2010 budget at all, for fear of disclosing to most Americans just how broke the country is ahead of mid-terms) was due to Orszag’s disagreement with the administration’s, and particularly Larry Summer’s, inability to fathom that reckless spending is a recipe for bankruptcy. As the FT reports: “Peter Orszag, Barack Obama’s budget director, resigned this week partly in frustration over his lack of success in persuading the Obama administration to tackle the fiscal deficit more aggressively, according to sources inside and outside the White House.” And so, as any remaining voices of reason realize they are dealing with a group of deranged Keynesians, soon there will be nobody left in the administration who dares to oppose the destructive course upon which this country has so resolutely embarked, which ends in one of two ways: debt repudiation, or war. And with the only remaining economic “advisers” being the trio of Summers, Romer and Geithner, you know America will somehow hit both of these mutually exclusive targets.”
Obama’s Army of Keynesians is bankrupting America.
It’s Friday afternoon. Time for President Obama to further inflate the deficit by signing the Doc Fix and for Honest Joe Biden to tell the truth — the Obama Administration’s plans won’t save or create America’s jobs:
“Vice President Joe Biden gave a stark assessment of the economy today, telling an audience of supporters, “there’s no possibility to restore 8 million jobs lost in the Great Recession.”
Obama and Biden took hundreds of thousands of unemployed and turned it into 8 million jobs lost. And Biden should know whether or not these jobs are gone since President Obama put him in charge of overseeing implementation of the Recovery Act.
Guess that didn’t work out. It would be funny if it weren’t so sad.
MORE — Ron Blackwell, the AFL-CIO’s chief economist explains the problem to Neal Cavuto:
“I was born in 1963, a year in which the US sold 300,000 new homes. Forty-six years later, we may be back to the same pace, thanks to ill-advised government intervention that sapped the demand for new homes. The annualized rate of new-home sales fell to a 46-year low in May, which had a 33% drop from April’s figures.”
I have the feeling most people in the Obama Administration don’t really understand why America needs vibrant home construction and offshore oil drilling industries. After all, they have homes and all the gas they need.
“The number of Americans seeking jobless benefits last week unexpectedly rose to a one-month high, indicating firings are staying elevated even as the U.S. economy grows.”
The experts explain why this isn’t good news, although we non-experts have a good idea why more jobless Americans is a bad thing:
“The labor market is not improving,” said Steven Ricchiuto, chief economist at Mizuho Securities USA Inc. in New York. “If you really are going to have a sustainable recovery, you need the labor market to improve.”
I guess this means June’s numbers won’t look that good either.
“Twice since the BP oil spill began in late April the United States has sent notices out from all of its embassies worldwide asking countries if they have certain types of boom, a State Department official tells ABC News. The US also recently began seeking high-speed, high-capacity off-shore skimmers overseas, the official said.”
Tapper clarifies that the U.S. has to pay for most of the products, and only a few of our worldly neighbors are donating their products and assistance. Apparently the world is full of capitalists when it comes to cleaning up the oil spill.