Thoughts on Obama’s latest deficit-increasing blather from Jim Geraghty:
We’re a $14 trillion economy that makes everything from timber to jumbo jets to firearms to smart-phone apps to Hollywood movies to every food product under the sun. The notion that some grab bag of tax credits and federal grants is going to kick-start a hiring binge to put 14 million Americans back to work or that the economy is one tax credit for hiring veterans away from recovery is laughable.
The recession we’ve endured for the past three years is far from normal, and yet we keep getting the normal Keynesian responses. I realize I’m about to offer blasphemies and shockers on par with Rick Perry’s Ponzi-scheme comparison, but what if Obama was wrong last night, and a big issue is that some of the people of this country do not, in fact, work hard to meet their responsibilities? What if decades of a lousy education system have left us with a workforce that has too many members with no really useful skills for a globalized economy? What if way too many college students majored in liberal arts and are entering the workforce looking for jobs that will never exist? What if the massive housing bubble got Americans to condition themselves to work in an economy that’s never coming back? (How many realtors are unemployed right now?) What if we have good workers who can’t move to take new jobs because they’re underwater on their mortgages and can’t sell their house?
That’s just crazy talk. (No link because it’s from his morning email.)
And on a related note, is it the end, after decades, of the New Deal Order? I hope so, but it went on so long that the transition to sanity is going to be very painful, and perhaps very ugly, as we saw with the union thuggery in Washington state that is so far not only going completely unpunished, but its author sat in a box with the First Lady at the president’s speech.
what if Obama was wrong last night, and a big issue is that some of the people of this country do not, in fact, work hard to meet their responsibilities?
So they were working hard in 2007, but in 2009 decided to stop trying, coincidentally as the financial system melted down? What a convenient theory for anyone opposed to government action to help the economy. This just-so story flatters Geraghty’s political prejudices, but has no explanatory power.
How many realtors are unemployed right now?
Why doesn’t Geraghty find out, isn’t that what journalists do?
For the record, the May, 2007 BLS report showed 49,270 real estate brokers and 172,030 real estate agents. The latest report, for May, 2010, shows 41,210 brokers and 153,740 agents. So we’ve lost about 30,000 realtors, a number dwarfed by the 600,000 jobs lost in state and local government.
No Jim — they weren’t working hard in 2007. What changed is that another of the silly bubbles encouraged by government redistributionism, burst.
Jim,
In early 2010, a report came out showing that unemployment for those under 25 was about 54%. Now let’s go back to what Geraghty said: “What if decades of a lousy education system have left us with a workforce that has too many members with no really useful skills for a globalized economy? What if way too many college students majored in liberal arts and are entering the workforce looking for jobs that will never exist?” That was in early 2010. We’ve had 4 (6 if you include summer) graduation periods since then.
You know, if liberals were really interested in fixing the economy, they would spend some time looking at what was really wrong with it. Instead, they ignore the causes and just push their toxic snake oil solutions.
A couple of things I don’t get.
What does the reduction in Social Security payroll tax do, apart from undermine Social Security?
What does raising taxes “on the rich” do apart from fulfil a campaign promise. The man is looking for every, any excuse to roll back “the rich” component of the Bush tax cuts, it seems, for the satisfaction of partisan bragging rights.
Here is a heretical idea. This business of showing that Mr. Obama is right and Mr. Bush was wrong is the Great White Whale for this man, not so much the tinkering with tax rates but the tax rates being the Pasteboard Mask behind which hides the Essence of Evil and the Futility of Man’s Efforts in this world (did I miss any of the Cliffs Notes talking points on Herman Melville?).
In the end, those tax rates are probably no big deal — we have survived under the old tax rates — or is keeping the “Bush tax cuts on the rich” a Great White Whale for the Right Blogosphere?
Just saying, and saying hypothetically, Mr. Obama has this strong negotiating “tell” that “raising tax rates on the rich” is his whatever-you-call-it in negotiating. Could we offer him those tax rate increases and really, really squeeze on just about everything else?
Yeah, yeah, you don’t have to come back at me with a “Paul, you don’t quite understand” comment. The tax rates are here-and-now whereas the spending cuts are only vague promises for the electoral here-after.
But again, I am just saying, Mr. Obama is a poor, poor negotiator, he can’t negotiate anything with dictators, he can’t negotiate with the Chinese, he can’t negotiate with the Congressional Republicans. What makes him a poor negotiator is that he makes all of these strident demands that he never backs up, and his whole negotiating posture is one giant tell. You know what his negotiating tactics are — the Alinsky Playbook — his opposition has gotten “inside the OODA loop” of that because he never deviates or adjusts to circumstances and keeps doing the same thing over and over again.
Again, what I am saying is that a great negotiator could really “wipe the floor” with this man, and in John Boehner and Mitch McConnell we at least have some pretty good negotiators, who by now have gotten the measure of the man.
The thing is that the Tea Party faction is pretty naive and green at this negotiating thing, and Messrs. Boehner and McConnell are regarded as much as being “part of the problem of Washington” as much as Mr. Obama. There is an opportunity to seize, and opening to pursue, and our side may yet blow it.
So we’ve lost about 30,000 realtors, a number dwarfed by the 600,000 jobs lost in state and local government.
Which in turn is dwarfed by the millions of other private-sector jobs lost, and not coming back until there is a president who is no longer waging war on private-sector employers.
“In the end, those tax rates are probably no big deal — we have survived under the old tax rates — or is keeping the “Bush tax cuts on the rich” a Great White Whale for the Right Blogosphere?”
It might not be a big deal to increase taxes on the rich. It is not like anyone will really feel sorry for them. The question is when would the best time be to do it, before the election or after the election? If there is a new President, that could lead to another read my lips moment.
If a tax increase came out of the super gang committee, the Republicans could easily blame it on the Democrats or say that it was either raise taxes or gut the military.
But something to keep in mind, taxes will be going up regardless. http://www.atr.org/comprehensive-list-obama-tax-hikes-a6433
“So we’ve lost about 30,000 realtors, a number dwarfed by the 600,000 jobs lost in state and local government.”
Obama wants to give states money to hire new teachers and first responders. What will happen a year later when the stimulus redux money is gone? And why is Obama only worried about creating union jobs?
It is almost like the other 90% of the work force isn’t even a consideration for the Obama.
“It is almost like the other 90% of the work force isn’t even a consideration for the Obama.”
Not “almost” at all.
“What a convenient theory for anyone opposed to government action to help the economy.”
Jim, we’re not opposed to government action to help the economy, we’re opposed to government SPENDING to help the economy. I would like to see another 3-4 MILLION gov’t workers out of a job, their Cabinet Secretaries too and a commensurate cut in the budget. Repealing Obamacare, reduced regulation bureaucracy and systemic entitlement reform will do wonders, deficit spending and taxes on the “rich”, not so much.
We’re already being heavily taxed by this administration in the form of an accelerated inflationary rate. For Obama it’s just been a matter of keep-on keeping on with the spending and print more money to cover the tab. Meanwhile for the rest of us we keep finding our food, fuel, and household supply costs continually rising.
All this speech did was elicit a chorus of business CEO’s to start singing the praises of, “hey dummy, just get the f’ out of our way”.
But I guess we are thinking about this too much. After all Obama says, “there isn’t time to think, we just got to act; and act boldly! So pass this bill! Pass it right now!! Come on hold the vote right this second! That’s why I got all yalls here together for this. So lets do it, where’s my gavel?”
It’s just more Porkulus in spite of his no earmarks comment. Like we really need to refurbish more school buildings and hire more teachers for an public education system that is a total failure.
Oh, and infrastructure too. Like more bridges and repaved roads will create even a small fraction of 14 million jobs. Plus, ARRA has already re-paved most of the highways here in KC in the past year.
“and yet we keep getting the normal Keynesian responses.”
I guess this is one of my personal great white whales.
“It [government spending] is all good!” isn’t Keynesian just because Obama says so. I call it neo-Keynesian. But honest Keynesian spending requires that the spending be core infrastructure – and the labor spending needs to be new and local to the region you’re stimulating.
Doing it as -deficit- spending is also suboptimal.
All O is trying to do is shore up a collapsing system well enough to get him through the next election. Regardless of the pain, that is added to the present pain, afterwards.
The problem with the economy is simple: Tax codes, regulations, and the welfare system conspire to punish industriousness and reward sloth. I can’t see the big Zero allowing anything to correct this underlying cause.
i still think Obama should take the stimulus money and short the Euro.
Great idea, Alan. After all, shorting the USD has been “unexpectedly” profitable.
working hard in 2007, but in 2009
You find it hard to believe that people beating their heads against a wall would eventually stop? You think people do not change their behavior regardless of the environment? Your realtor numbers suggest exactly that.
What if Obama was wrong?
Is too damned polite to someone hell bent on destroying this country. He is not only wrong but he is blatantly and obviously only doing that which he thinks will keep him in power.
Name one thing from his speech that is for the general welfare and not welfare of his union supporters.
“Name one thing from his speech that is for the general welfare and not welfare of his union supporters.”
Easy:
“Mr. Speaker, Mr. Vice President, Members of Congress, and fellow Americans:”
You almost did it Gregg. You missed his definition of fellows.
“It [government spending] is all good!” isn’t Keynesian just because Obama says so. I call it neo-Keynesian. But honest Keynesian spending requires that the spending be core infrastructure
That depends on what you mean by “core infrastructure.”
Keynes said the government could eliminate unemployment by paying people to bury bottles then dig them back up again. Buried bottles might be considered infrastructure but they are certainly not useful infrastructure and probably not what you have in mind.
Which in turn is dwarfed by the millions of other private-sector jobs lost, and not coming back until there is a president who is no longer waging war on private-sector employers.
Causing corporate profits to rise at a record pace (and then to sit in cash reserves, waiting for demand to justify hiring). Is this a new kind of war where you shovel money at the enemy? Those new tax breaks for private-sector employers must be the latest salvo.
And I thought (per Geraghty) that the jobs weren’t coming back until those lazy unemployed people got off their butts. It must be tough mentally balancing the impulse to blame Obama with the impulse to blame the unemployed.
We’re already being heavily taxed by this administration in the form of an accelerated inflationary rate.
Did you somehow miss the fact that inflation’s been lower under Obama than under any other recent president? Your mental process seems to be: Obama is bad, inflation is bad, taxes are bad, so Obama must have raised inflation and that’s a tax. Pay no attention to the fact that inflation and taxes are down, reality is just a pesky detail.
I would like to see another 3-4 MILLION gov’t workers out of a job,
Now that’s a cure for unemployment — a few more million people looking for jobs, spending less, having their houses foreclosed on…. It’s the right wing version of the underpant gnomes:
1. Cut government spending on salaries, purchases and services
2. ???
3. More jobs!
Repealing Obamacare … will do wonders
Again, Obamacare is bad, so it must be the reason for unemployment, even though it’s significant provisions don’t kick in until 2014. It must be wonderful living in such a simple world.
Like more bridges and repaved roads will create even a small fraction of 14 million jobs.
Yeah, screw those mere thousands of jobs. Clearly we should instead wait until we don’t need the jobs, construction costs are higher, and our crumbling infrastructure has cost us some more productivity.
The problem with the economy is simple: Tax codes, regulations, and the welfare system conspire to punish industriousness and reward sloth.
And yet all those things — including even higher taxes, and more generous welfare — gave us a booming economy in the 1990s. But never mind, you don’t like taxes, regulations and welfare recipients, so they must be the problem.
He is not only wrong but he is blatantly and obviously only doing that which he thinks will keep him in power.
Indeed — he knows that he’ll only be re-elected if the economy is doing better by November, 2012, so he’s trying to improve the economy. The things he’s proposing are the very same things that people like Paul Ryan were pushing in 2001, when the goal was to make sure that Republicans would get re-elected in 2002. If Rick Perry is president in 2015, and unemployment is 9%, he too will argue for injecting money into the economy. Anti-Keynesian incumbents are as rare as unicorns.
he knows that he’ll only be re-elected if the economy is doing better by November, 2012, so he’s trying to improve the economy.
If he was trying to improve the economy, he’d listen to CEO’s and not union bosses. Union bosses don’t create jobs, they suck the life out of employees and employers. And here’s the kicker, unions are not really the problem in the private sector. They are causing havoc with civil servant and goverment auto company pension plans, but otherwise not a big problem with companies. The problem business have is Obama, or one of the departments under his administration, constantly discussing new regulation to “reign in greed”, so no company has any idea what their revenue stream will look like 3 months down the road.
If Obama wanted to improve the economy, he’d shut up and take more vacations. But before he left, he’d tell his regulatory agencies to put a muzzle on their stupid plans to squeeze another dollar for the next 9 months. Since he’ll never do it, he won’t be re-elected in 2012.
Keynes said the government could eliminate unemployment by paying people to bury bottles then dig them back up again.
Sure. There’s nothing wrong with that (other than the part where they run out of other people’s money). “Full employment” is not synonymous with “roaring economy” – witness the CCCP. Particularly if some of the employment is deliberate make-work.
But ‘things Keynes said’ the ‘Keynesianism’ isn’t (entirely) about eliminating unemployment. The economists that espouse it (ok, pre-1990 economists that espouse it) and have published “proofs” all rely on the work being done being sensible.
Hiring people to lay railroad tracks is fine -> also hiring people to rip them back up is beyond moronic. It doesn’t double the stimulus effect – it zeros it.
The economists that espouse it (ok, pre-1990 economists that espouse it) and have published “proofs” all rely on the work being done being sensible.
Those “proofs” are often disproven before they were written.
I recommend “The Critics of Keynesian Economics” ed. by Henry Hazlett, available as a full-text preview and free PDF download on Google Books.
To quote Hazlett’s introduction:
In spite of the incredible reputation of [Keynes’s “General Theory”], I could not find in it a single important doctrine that was both true and original. What is original in the book is not true; and what is true is not original. In fact, even most of the major errors in the book are not original, but can be found in a score of previous writers.
he knows that he’ll only be re-elected if
the economy is doing betterhe can fool enough people againFIFY
things he’s proposing are the very same…
Except where they ain’t. The point is to funnel money to his supporters and send the FBI after those that don’t.
“Did you somehow miss the fact that inflation’s been lower under Obama than under any other recent president?”
Okay, Jimbo. Did you somehow miss the fact that this administration has modified the definition of inflation? Inflation has always been calculated using price increases in a “basket” of consumer goods (when is the last time you bought anything in a “basket,” btw? Talk about out of touch…).
This administration has taken a couple of non-essentials out of the “basket”: food, and energy. So, yeah, inflation is low, even though the price of those two things (all anyone can afford anymore) is skyrocketing.
Add to that, not have they just taken essentials out of the basket, but they’ve added non essentials that cost less like certain specific electronics. If they could they figure out a way to say cost of living is less under this admin. than all of history.
No COLA for the last two years. Make of that what you will.
Hey Jim, here’s one of your fellow travelers. This guy is a piece of work. Bet we won’t see him talking to Brian Williams. Also, where did I say I wanted them gone now? I didn’t but you won’t let that get in the way of accuracy. There should be a hiring freeze on ALL federal employment. If someone quits, either eliminate it or move a current employee into it.
Jim spews, “…and more generous welfare…”, except Clinton signed a welfare reform bill lowering benefits and making it harder to qualify.
More Jim spew, “…Again, Obamacare is bad, so it must be the reason for unemployment…” If it’s so good why are all his union buddies getting waivers? if it’s so good, why are costs going to go up for many by 30 to 40%? Businesses are sitting on cash so they have a cushion because the regulation happy administration is making it hard to forecast what their costs are going to be.
Jimspew, “Yeah, screw those mere thousands of
jobsUNION jobs.” FIFY because Obama has to take care of Jimmy and Dicky (see abouve link).Jimspew, “…so he’s trying to improve the economy.” Except he doesn’t know how and no President can “fix” the economy. That’s another “progressive” trope. He can create an environment that is conducive to job growth but can’t guarantee the jobs will show up.
I do have to laugh where you talk about government salaries. You do understand that spending money on government is an expense. It’s just like the phone bill or the electric bill or rent. The lower it is, the more you get to keep. Some of those people are a necessary expense and that’s fine. The rest are a drag on the economy.
Jim, you really need to know that when seconds count, the government is only minutes away.
MSNBC April 2011 article saying, “Inflation actually near 10% using older measure.” And I think it’s hit over 11.5%-12% at times which would even make Carter blush.
Hell, even by the gamed up numbers, the as reported rates have been back up into Bush era territory in the last 3 months. Not to mention gas is twice as expensive as this time last year. And anecdotally speaking, my 2 meat dinner with a small drink was nearly $14 at Dickie’s the other day. I thought it was bad a few years back when it broke the $10 barrier.
I got a few things from Obama’s speech. The only jobs worth protecting are government jobs (5 of the 6). But for those who don’t want to become a public sector union employee, he magnanimously offered us the option of dangling off a bridge by a rope (the rest of his jobs package). Any other Americans can pound sand and eat dirt.
We see once again that Obama’s solution to any problem is more government and more bureaucracy.
Wait — Obama is a Keynesian? I thought they released his birth certificate….
“And yet all those things — including even higher taxes, and more generous welfare — gave us a booming economy in the 1990s. But never mind, you don’t like taxes, regulations and welfare recipients, so they must be the problem.”
The economy in the 90’s was not good because of high taxes but despite of them. Much of the Clinton economy was a giant tech bubble which burst. Lucky for him it burst as he was leaving office.
Actually, I detect a marked shift away from Keynesianism in this last speech. We won’t know for sure until he tells us how he will “fully fund” this $450B pseudo-stimulus, but consider the likely scenario that a big chunk of this will be hiking taxes on “the rich”. One way or another, raising taxes on the rich means raising taxes on people who hire other people, either through taxes on small business or taxes on the income that goes to small and large businesses.
So, in February 2009, Obama spends $800B he will borrow, in order to “stimulate” the economy. This is Keynesianism, and it is an epic fail. The failure is due in no small part to the intricate fiddling with the rules for doing business that is part of the new regime’s plan for society. But Keynesianism it is.
In September 2011, Obama proposes to give businesses a tax break for hiring unemployed workers. He will fund this by taxing those businesses. In other words, he proposes to create an incentive for hiring a specific class of people by making it harder for businesses to hire other kinds of people and easier to hire the favored class. This isn’t Keynesianism. I’m not sure economists have a specific name for this kind of “stimulus” (which naively doesn’t even seem like it would result in any net job growth). Any suggestions?
Details, details. Has anyone stepped back and noticed that over the last 50 to 150 years, the more the elected and appointed government gets involved in our everyday lives, the deeper in debt and less human we become? Government debt is supposed to be for un-anticpated happenings; war, natural disaster, and the like. It is not for ongoing programs designed to keep elected representative in office. This correction is going to hurt. A lot. Better us who watched it grow and did nothing, than the young who were born into it.
Compare Obama’s speech to Sarah’s crony capitalism speech which is getting broad support.
Ken, I find it amusing that the New York Times seems unaware that the corporate/government collusion she decries is exactly what Adam Smith described as the worst form of government, and he wore tube socks and a powdered whig.
Do any of these liberal elites even read anything about economics? They’ve lived in a capitalist country, as did their parents, going back centuries, yet they’re so ill-informed and uneducated that they’re like communists writing for Pravda who’ve never even heard of Karl Marx.
Of course a key difference is that Adam Smith was a scientist who observed and described, whereas Marx wrote bizarre conspiracy theories in his basement, theorizing about what working must be like without ever holding a job in his entire life. He should’ve focused on the illuminati or perpetual motion like other basement crackpots.
I think the problem is most journalists are too young to have much of any experience and have never been exposed to the reading that would most benefit them. The school system never exposed me to any reading of substance.
At 52 I feel terribly inadequate in experience and education and I’ve been all over this country and world with a voracious appetite for knowledge. Can you imagine these 30 somethings with hardly any life experience most of which is equivalent to ‘so what’s your sign?’
We really do need a readers digest condense version of basic world knowledge. I’m using Wikipedia as a substitute.
We need a framework of knowledge that we can all relate to so we can have intelligent discussions. It could never be all encompassing, but it should cover certain fundamentals (not that we could agree on what those might be.)