Remember a few days ago I pointed out how Nancy Pelosi was out and about claiming that unemployment benefits was the greatest job creator in the world?
Well guess where she probably got it from – Paul Krugman?
Wait: there’s more. One main reason there aren’t enough jobs right now is weak consumer demand. Helping the unemployed, by putting money in the pockets of people who badly need it, helps support consumer spending. That’s why the Congressional Budget Office rates aid to the unemployed as a highly cost-effective form of economic stimulus. And unlike, say, large infrastructure projects, aid to the unemployed creates jobs quickly — while allowing that aid to lapse, which is what is happening right now, is a recipe for even weaker job growth, not in the distant future but over the next few months.
I won’t bother you with the reasoning that says this is absolute nonsense – that was covered in the Pelosi post. What’s surprising is how desperate Krugman is to have his way with increased deficit spending – to stoop to this level of argument. Suffice it to say, this doesn’t increase “consumer demand” or support “consumer spending”. Unemployment benefits are a fraction of what the household was making before so what it goes toward is the maintenance of necessities and not much else.
To see a Nobel prize winning economist reduced to this – a political hack – is rather revealing. It certainly, at least in my mind, makes everything he writes that is purportedly about his specialty suspect. If this is his argument, then he hasn’t got an argument, and if you read the rest of his screed you’ll discover it is only an excuse to attack the GOP – falsely, of course.
Krugman has all but ruined his reputation as an economist with nonsense like this. Of course when a person becomes identified with the clueless, like Nancy Pelosi, and their arguments, the decent into full “hackery” is complete.
If ever there was an indicator – an example – of the appalling level of economic ignorance to be found among our national legislators, this from Nancy Pelosi is perfect:
Talking to reporters, the House speaker was defending a jobless benefits extension against those who say it gives recipients little incentive to work. By her reasoning, those checks are helping give somebody a job. "It injects demand into the economy," Pelosi said, arguing that when families have money to spend it keeps the economy churning. "It creates jobs faster than almost any other initiative you can name."
Pelosi said the aid has the "double benefit" of helping those who lost their jobs and acting as a "job creator" on the side.
Demand is not created or "injected" by jobless benefits. At best may be, at some level, maintained. But it also could be argued that if the drop in income in an area is wide enough (former salary income v. jobless benefit income) it could cost jobs.
For instance the store clerk in a grocery store can be economically justified if the average grocery bill in the area is X. But if it falls to Y, which is likely with belt tightening by those receiving lesser unemployment benefits, then the clerk’s salary is no longer economically justifiable.
Jobless benefits rarely lend themselves to purchases outside the necessities because they’re usually not a great amount of money. The benefits are a maintenance income. What they mostly do is allow the recipient to pay for food, clothing, shelter and transportation, or some combination of those necessities.
Employers don’t create businesses and jobs in anticipation of receiving some of a person’s unemployment check. So unemployment checks are not out there creating jobs "faster than almost any other initiative you can name". In fact, their extension most likely inhibits job seeking (as the person and/or family adjust their lifestyle to the income until all necessities are covered).
This is an amazing example of the appalling economic ignorance that has gotten this country in the financial hole it is in and seems bound and determined to dig it deeper. And she’s 3 heartbeats away, folks.
[MICHAEL ADDS:] The left has been pushing this idea for awhile. I tackled it back in January:
If you look closely at the chart you will be unsurprised to find that government spending is calculated to provide substantially more “bang for the buck” in creating wealth and jobs. That’s unsurprising because this chart is intended to support a progressive prescription for the economy. Of course it will show government as the answer.
Without arguing the statistical or modeling specifics behind the chart, there is one glaring item that reveals how much magical thinking went into its creation. By far the most “stimulating” actions set forth are “Temporary Increase in Food Stamps”(calculated to create 9,803,333 jobs), “Extending Unemployment Insurance” (9,236,667 jobs), and “Increased infrastructure Spending” (9,010,000 jobs). The closest tax-cutting measure, according to this analysis, in job creation is a “Payroll Tax Holiday” which is estimated to create 7,253,333 jobs. Do you see the problem?
How, exactly, do food stamps and unemployment benefits create jobs? Arguably, spending on infrastructure could create construction jobs on a temporary basis, although that hasn’t proven to be the case with the stimulus bill that was passed. But there is simply no logic to the idea that providing government benefits to the poor and unemployed will serve to create jobs, much less 9 to 10 million of them. That’s just magical thinking.
And again in February. Based on whatever studies they’ve compiled to prove their point, the Democrats are going to simply go with this economic model sans examination.
Only to Nancy Peolosi, who, if she had two brain cells to rub together still couldn’t think her way out of a wet paper sack.
Listen to this:
One more time in case you don’t believe you really heard it right:
“We see it as an entrepreneurial bill,” Pelosi said, “a bill that says to someone, if you want to be creative and be a musician or whatever, you can leave your work, focus on your talent, your skill, your passion, your aspirations because you will have health care.”
See, you didn’t misunderstand – quit your job, work on your talent, be irresponsible – the taxpayers will cover you.
A few points about the status of health care reform. First, if the votes were there for passage in the House, the bill would now be law. That should tell you all you need to know about the present status of the bill. The votes aren’t there. The bottom line, however, is if the House manages to pass it, health care reform becomes law. At that point, reconciliation is moot. It will be part of the deal, but with or without reconciliation in the Senate, the bill is law.
President Obama has said he wants to sign the bill into law by March 18th – prior to his trip to Indonesia and Australia. Nancy Pelosi and Steny Hoyer refuse to sign on to that timeline. That should give you a good indication of the level of DEMOCRAT resistance to this bill. Again, I want to make the point that there are enough Democrats in the House right now to pass this bill into law without a single solitary Republican vote (and it appears if it does pass it will be without any GOP votes – something which also scares House Democrats, especially with November looming).
Yesterday the President was reduced to begging Congressional Democrats to pass the bill. He appealed to emotion claiming the fate of 31 million uninsured was in their hands and this bill was their only chance to get insurance (it’s not). And, of course, placing the future of his presidency second, claimed that it too was in their hands.
Heh … no pressure. And it is the sort of appeal that many former “no” votes will have difficulty resisting (calling Mr. Stupak).
But here’s what you should take away from those meetings with liberal members of Congress, because it is important:
[Rep. Barbara] Lee said Obama said he still “strongly supports” a public option, but “the votes aren’t there.”
But, she said, Obama said the current healthcare legislation is a “foundation,” adding he “would work with us on the next effort.”
“I am going to keep hop[ing] for a public option,” Lee said. “And he said he’s going to work with us.”
The term “foundation” is the key. From this bill the plan is to morph it into something that more closely resembles a single-payer system – something Obama has said any number of times he supports (prior to becoming president, of course, where he now claims it’s just not possible in America). The public option is step in that direction and, as Lee is pointing out, passage of this bill allows them to build on the “foundation” at a later date with things like a public option.
One other point I want to make – the dog and pony show the President had the other day where he used doctors in white coats as props (you remember his health care summit rant about Republicans using the actual bill they were talking about as “props”?) was nothing more than propaganda. There is no “Obama bill”. His claim that all of those things that both sides agree on are in the bill is just not true. It was an attempt to claim bipartisanship and paint the GOP as unreasonable if they didn’t help pass the Senate version of the bill. There isn’t nor has there ever been any real attempt to include Republican ideas or at bipartisanship. The speech was transparent propaganda designed for a specific purpose – to justify ramming the bill through by any means necessary. It is the only thing which has been transparent in the entire process.
The next two weeks are going to be among the most interesting politically that I’ve seen in a while. The arm-twisting will be brutal and you can also expect the deals and pay-offs to be monumental (and all done with your money – in the real world we’d call them attempts to bribe a public official and jail those offering the bribe. In Congress, it’s business as usual.).
Will the administration win out in the end or will the people be properly served by the eventual defeat of the bloated, intrusive and costly monstrosity? Stay tuned.
Forget reconciliation for the moment, if the Senate version of the Health Care Reform bill doesn’t make it out of the House, reconciliation is moot. As we talked about on last night’s podcast, the action to be watched is in the House where Nancy Peolosi is trying to gather enough votes to pass the bill into law. If and when that should happen, and that is an extremely iffy prosepect at best, then reconciliation comes into play, with the Senate promising to pass “fixes” to the Senate bill/law to satisfy House Democrats.
So the effort in the House is two-fold: 1) put a legislative package together that will be passed after the Senate bill is signed into law that will satisfy wavering House Democrats and 2) then get enough votes among Democrats (remember they don’t need a single Republican vote to pass this bill in the House) to pass the Senate bill.
As of this writing, Pelosi doesn’t have enough votes to pass the bill. So, in the face of increasing public disapproval and skitish House Democrats, she’s reduced to calling on Democrats to become political kamakazis in order to pass this monstrosity of a bill into law.
“Our members, every one of them, wants health care,” Ms. Pelosi said. “They know that this will take courage. It took courage to pass Social Security. It took courage to pass Medicare. And many of the same forces that were at work decades ago are at work again against this bill.”
“But,” Ms. Pelosi continued, “the American people need it. Why are we here? We’re not here just to self-perpetuate our service in Congress. We’re here to do the job for the American people, to get them results that give them not only health security, but economic security.”
Ms. Pelosi, holding a fairly safe seat from the liberal San Francisco area, is willing to spend the careers of every Democrat in the House to get her way. The question is, are enough of the Democratic members of the House willing to go along?
My sense is the answer is no (if they were, the bill would be law right now, wouldn’t it?) and she’s going to have a very tough time selling her “package” to Democrats – especially those among a group of 40 headed by Bart Stupak who are pro-life Democrats and don’t at all like the abortion language in the Senate bill. Reconciliation can’t fix that. And even if only half the Blue-Dogs go for her package, that leaves more than enough to defeat the bill.
As every day passes and we get closer to the mid-term elections I think it becomes less and less likely that Pelosi will get the votes she needs. There are few “courageous” politicians when it comes to jeopardizing their careers. This is one time that actually works for the people’s best interests. And I’d also guess that once the members of the House understand what reconciliation can and won’t fix, the bill’s fate is sealed.
I’m saying the bill won’t pass. That’s a guess. But it is a guess as valid as any other out there since it factors in the vast differences between the two bills in the first place, the fact that reconcilation is a very poor substitute for a normal congessional markup session and the belief that human nature will win out over party kamakazi politics with the desire to retain their jobs winning out over what Nancy Pelosi wants.
How desperate is this bit of pretzel logic?
“But let me say this,” Pelosi continues, “The bill can be bipartisan, even though the votes might not be bipartisan, because they [Republicans] have made their imprint on this.”
By George, Queen Nancy will make this bill bipartisan even if she has to redefine bipartisan.
Does that now make the GOP the party of “yes” since they supposedly imprinted themselves on that “bipartisan” bill?
Talk about whatever strikes your fancy.
Some things that have caught my eye:
Is the Obama administration trying to unionize the government procurement process?
Speaking of unions, what is SEIU’s president, Andy Stern, doing on a Obama’s “deficit reduction” panel. Does that say “I’m serious about this” to you?
Anyone else see the irony in the Hillary Clinton claim that domestic political infighting is hurting America’s image abroad?
Brits aren’t buying the “January was the warmest month ever” nonsense.
Speaking of the Brits, is there a reason we won’t back their claim to the Falklands in a drilling-rights dispute?
Apparently some Dems are calling for Charles Rangel to step down from his House committee chairmanship because of ethics violations. Why isn’t Nancy “the most ethical Congress in history” Pelosi doing the same?
Paul Ryan was the rock star in the health care summit. To date no one has refuted his fiscal points.
The Obama administration has consistently talked about the Bush administration not counting the cost of war in its deficits. Well, it isn’t a war, but the Obama administration continues to nrefuse to cout the hundreds of billions going to Freddie Mac and Fannie Mae – primarily because it would bump this year’s 1.4 trillion deficit by another 300 billion.
And finally there’s some relatively good news. Jeremy Lott says there have been quite a few “quiet libertarian victories” here lately.
Despite all the rumors of back-room deals already agreed upon by the Democrats the House may be short of the votes necessary to pass the Senate version of the Health Care Reform bill.
Of course the rumored plan is to have the House pass the Senate bill without change and then have the Senate amend it to the House’s liking through the reconciliation process which only requires 51 votes to pass.
Not so fast.
First the House has to pass it – and, according to at least one source, they may be as many as 100 votes short. Michael Barone explains why House Democrats may be less than enthusiastic about voting for this bill:
Why are House Democratic leaders having such trouble getting the 217 votes needed for a majority (because there are vacancies now in two Democratic-held seats)? Look at it this way. Imagine you’re a Democratic congressman from a not entirely safe district. The leadership comes to you and says, We’d like you to vote for the Senate bill. Oh, and by the way, we can’t change a word in it. You’ve got to vote for the Cornhusker Hustle and the Louisiana Purchase and all that other garbage.
But hey, the leadership guy will go on, there’s no risk, because the Senate will fix everything through the reconciliation process. You will be suspicious of this. You will note that using the reconciliation process requires favorable rulings from the Senate parliamentarian, rulings over which you have no more leverage than you have over phases of the moon. It requires 50 Democratic senators willing to go along with reconciliation, and given the poll numbers that have been coming out lately that’s not a sure thing. And it requires steady leadership from Harry Reid—who just last week, without notice to the White House, the House leadership or the senators involved, yanked a Baucus-Grassely bipartisan “jobs” bill and substituted a much smaller one of his own.
A. First you have to trust Nancy Pelosi enough to vote on it.
B. Then you have to trust Harry Reid to do what he says he’ll do – i.e. initiate the reconciliation process and address the specific points the House wants changed.
C. You have to hope there are enough Democratic Senators (not in tight races) who’ll go along with reconciliation. And finally,
D. You have to hope that the process is favorably ruled upon by the Senate parlimentarian.
If all of that doesn’t come to pass and the Senate bill passes unchanged, the Democratic member of the House has handed his political opponents in this year’s midterms some ready made ammunition. He or she will have voted for the Louisiana Purchase, Cornhusker Kickback and all manner of other other objectionable portions of the bill. Concludes Barone:
The only protection you have against this is the assurance that the Senate parliamentarian and scared incumbent senators will come through for you, and that Harry Reid will pursue a steady course.
So your response to the leadership is either, I gotta think about this, or, Hell no. The House Democratic leadership’s problem is that it cannot credibly promise that the Senate will keep its part of the bargain.
In terms of trust, my guess is Senate Democrats rank somewhere below used car salesmen and lawyers.
Nancy Pelosi, not exactly the sharpest knife in the drawer, explains why the 60 vote majority in the Senate is “unconstitutional”:
“A constitutional majority is 51 votes,” Pelosi said in an interview Tuesday with Roll Call. “If in fact the Republicans are going to say nothing can be done except by 60 percent, then maybe we all should be elected with 60 percent. It isn’t legitimate in terms of passing legislation.”
Conveniently missing in this romp through the illogical is the fact that a “majority” in the Senate is whatever the Senate rules say it is – and that’s a power left to them by the Constitution. In fact, to change this rule, the Senate requires 67 votes or a 2/3rds majority. I assume Ms. Pelosi would find that “unconstitutional” as well. Just another, albeit a fairly pathetic one, in an increasing number of assaults on the filibuster by Democrats who understand that they either have to actually be bi-partisan now or change the rules.
Guess which they opt for?
Isn’t also ironic when “Justice” Pelosi cites the Constitution incorrectly as a means to push a blatantly unconstitutional health care bill through?
Anyway, remember to wish long lives and good health to Barack Obama and Joe Biden. As bad as they are, Pelosi being 3 heartbeats away from the Oval Office necessitates those good wishes.
It’s over. And it has been over long enough so my gag reflex doesn’t automatically kick in when I think about it. Democrats managed a close “victory” (I don’t consider it a victory for the American people at all, thus the scare quotes) which included one misguided Republican (what a surprise).
Before I talk about it further, there’s an “Irony Alert” in full swing for the irony-impaired leftists who took great joy in touting NY-23 as a Republican civil-war and party purge. They’re are now doing the same sort of thing concerning the 39 Democrats who voted “no” on Pelosi’s monstrosity (and those that voted for the Stupak amendment).
Back to the bill: I make no bones about it – it is a bureaucratic, bank-breaking monstrosity that still will leave millions uninsured and put those who don’t want to play Pelosi’s game in jail – literally.
Additionally, it will cost much more than the Pelosi smoke-and-mirror act is claiming. Sen. Judd Gregg says it will be about 3 trillion over 10 years. I’ve seen reports from other organizations saying 2 to 2.5 trillion. Donald Marron lays out his argument with a handy dandy chart for 1.3 trillion. Once caveat to his analysis – his chart shows the “doc fix” at “$0” dollars. That’s because they plan to pass the $250 billion dollar doctor buy off in a separate bill so it’s not included in the 894 billion faux cost they’re trying to sell. That brings his 1.3 up to 1.6 trillion. The point, of course, is no one is buying the Pelosi figure.
Bottom line – it won’t be anywhere near the supposed deficit reducing 894 billion they claim. And when the front-loaded 500 billion in new taxes begin to hit (well before the program takes effect) there’s going to be a whole lot of political hell to pay especially if it kills the recovery.
That said, the Senate still has to pass its version for this to go anywhere, and with a vote that close in the House, the preliminary betting is against passage in the Senate. And besides, Harry Reid couldn’t organize a one-man parade.
But I think Doug Mataconis, borrowing a line from Star Wars, summed up last night’s vote on the bill and then applause that followed the best – “So this is how freedom dies – to thunderous applause.”