Free Markets, Free People

NY Times still clueless about economic woes

Cluelessness seems to be a fairly rampant disease among those who seem unable to peer objectively at reality and analyze it.  They prefer to pretend they know what they’re talking about and unhelpfully prescribe exactly the wrong antidote every single time (in this case, more of what we’ve watched fail for two plus years).  And, as it turns out, the New York Times editorial board is peerless among that group:

It was not surprising to hear the Republican presidential candidates repeat their tiresome claim that excessive government spending and borrowing were behind Friday’s terrible unemployment report. It was depressing to hear President Obama sound as if he agreed with them.

And the NYT’s claim as to why that’s not the case?

There has never been any evidence that the federal debt is primarily responsible for the persistent joblessness that began with the 2008 recession. The numbers have remained high because of weak consumer demand and stagnant wage growth, along with an imbalance between jobs and job skills.

Who has ever argued that “federal debt is primarily responsible for the persistent joblessness?”  Certainly there are other factors.  However, there’s no question that excessive government spending – i.e. borrowing to spend – has had a hand in the stagnation we’re now undergoing.  In fact, increased and excessive government spending has had no effect and, given the promises made, could be argued to have had a negative effect. 

The debt is the indicator of the problem – excessive and unaffordable spending.  As we’ve been pointing out for months, revenue isn’t the problem – spending is.   So pointing to this strawman, as the NY Times does, is just more politics from the side who thinks it prudent to penalize those who produce in order to bail out those who spend what they produce (and the reason the Democrats insist on calling the present income tax levels “Bush tax cuts”).  What doesn’t seem to penetrate the thinking of those who continue to push this line is one of the reasons we’ve had weak consumer demand and stagnant wage growth is the unsettled business and regulatory atmosphere this administration has created in its 2 plus years.  That, of course is pushed aside by the NYT in favor of this argument:

The president may have a nebulous approach to unemployment, but he is hardly indifferent to it. His re-election hinges on reducing it. It is hard to understand, though, why Mr. Obama has adopted the language of his opponents in connecting the economy to the debt. To his credit, he talked about the one step that would work — investing money in rebuilding the country. But the debt-ceiling ideas he is now considering would make that investment much less likely by pulling hundreds of billions of dollars out of the economy at precisely the moment when the spending is needed most.

Yeah, there’s absolutely no connection between the “economy” and the “debt” is there?   Of course there is?   And pretending that borrowing money we don’t have to push it out in the economy and calling it an ‘investment’ doesn’t fool most rational folks.  The NYT even points out that the last time the money was thrown out there is it mostly went to service state debt which only delayed the inevitable.  Now, apparently, that will somehow be different in the face of “weak consumer demand”.   Really?   And, of course, the jobs the NYT laments about aren’t private sector jobs but government jobs (state and local) which we all know are the engine of our economy (/sarc).

The types of increases in revenue that government should be encouraging are those that come from private sector jobs.   They provide tax revenue from created wealth.   They don’t require the government to borrow money to “invest” (i.e. borrow money, create jobs and then tax the jobs created with the borrowed money and claim “increased revenue”.  Make sense to you?).

So while I don’t disagree with the Times when it says “his re-election hinges on reducing” unemployment, it appears the Times would opt for the easy and wrong way to do it – borrow more money, pump it into creating make-work jobs just long enough to get Obama past the 2012 election.   Then, who care?   Debt ceiling, increased drag on the economy’s GDP and all that stuff, forgetaboutit.  Well, at least till they get this guy re-elected.  Then, of course, I expect a clarion call by the Times wondering how this could have all be so mismanaged and spinning and twisting it, as they have in this editorial, so it all ends up being the fault of the Republicans.


Twitter: @McQandO


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10 Responses to NY Times still clueless about economic woes

  • The numbers have remained high because of weak consumer demand and stagnant wage growth…

    So, why is there “weak consumer demand”?  Hmmm… Is it that many “consumers” just decided all at once to take up a life of aestheticism and stop buying things?  Or is it that many consumers lost their jobs and couldn’t AFFORD to consume as much as they wanted?

    And why did they lose those jobs?  Is it because government under that skinflint George Bush wasn’t spending enough?  Or is it because the feds were propping up what amounted to corrupt organizations (Fanny and Freddy) to inflate home values and just about everything else with easy money?

    And why aren’t those jobs coming back as they have by this point in past recessions?  Could it be that (A) Uncle Sugar is hogging all the money and (B) making the business climate so uncertain that nobody in his right mind will hire anybody even if he has the money?  Hmmm…. COULD BE.

    … along with an imbalance between jobs and job skills.

    Jebus.  So, in the NYT’s alternate reality, millions of Americans suddenly found themselves unqualified to do millions of jobs that were allegedly out there???  What, did the Model T replace the horse and buggy again?

    This sort of stupidity just boggles the mind.  And their prescription?  Why, MORE borrowing for MORE spending on MORE “infrastructure”.  We blew about $800 billion on “infrastructure” just a couple of years ago; how many more roads and bridges do we need?  Oh, wait: we didn’t actually GET any roads and bridges.  We got… um… er… Hey!  We got exactly jack sh*t for that money.  And the NYT wants to do that AGAIN???

    How stupid can they be?

    The president may have a nebulous approach to unemployment…

    That’s about the nicest way to say that somebody doesn’t have a f*cking clue as I’ve ever read.

    … but he is hardly indifferent to it. His re-election hinges on reducing it.

    Well, I’m glad that his motives are totally selfless and he will concentrate on J-O-B-S because he cares about the American people.

    / sarc

  • Who is John Galt? Didn’t he say something similar 60 some years ago?

  • NY Times still clueless about economic woes

    I guess we needed to know what exactly they are clueless about today, but my first thought when I saw the headline was that the last three words are redundant.

    But then, I guess that wouldn’t be news, since it’s an ongoing condition.

  • 1) What in the world do stagnant wages have to due with unemployment being high?
    2) States and municipalities are shedding jobs because they have financial problems, i.e. too much debt or debt-like pensions obligations. That directly affects unemployment.

  • Thu Mar 26, 2009 3:03pm EDT

    NEW YORK (Reuters) – The New York Times Co laid off 100 employees on Thursday and cut salaries for the rest of the year by 5 percent, and said it might cut newsroom jobs at its namesake newspaper if it cannot get union employees to agree to a similar cut.

    Somebody at the Times seems to understand the economics of it all. Apparently, the editorial staff isn’t one of them.

    • Sweet, sweet schadenfreude.

      NeoSomebody at the Times seems to understand the economics of it all.

      Yeah, people who actually have to deal with economic reality (business owners, accountants, and people generally who can’t just borrow / print all the money they want or get it from a sugar daddy) tend to be pretty good at understanding it.  People like “editorial writers”, politicians, and Tim Geithner, not so much.

  • I wonder how much the editorial baord is influenced by Krugman.  It would be fun to see an editorial that was exactly counter to a Krugman column.  But, I doubt that will happen until the times is willing to take the column away from Krugman.  Until then, expect “lockstep”.