Unemployment is the Best Way to Create Jobs

[Gaspar]

Echoing previous statements from Nancy Pelosi, Whitehouse Press Secretary Jay Carney confirms the administration's continued job creation strategy.


"I understand why extending unemployment insurance provides relief to people who need it, but how does that create jobs," Wall Street Journal's Laura Meckler asked Jay Carney at Wednesday's WH briefing.

"Oh, uh, it is by, uh, I would expect a reporter from the Wall Street Journal would know this as part of the entrance exam."

"There are few other ways that can directly put money into the economy than applying unemployment insurance."

"It is one of the most direct ways to infuse money directly into the economy because people who are unemployed and obviously aren't running a paycheck are going to spend the money that they get. They're not going to save it, they're going to spend it. And with unemployment insurance, that way, the money goes directly back into the economy, dollar for dollar virtually."

"Every place that, that money is spent has added business and that creates growth and income for businesses that leads them to decisions about jobs, more hiring. So, there are few other ways that can directly put money into the economy than applying unemployment insurance, Carney said.

The failure in this logic is that employed people put far more money back into the economy than unemployed people.

Unemployment benefits do not represent an open loop, as we hopefully understand now.  The money must first come out of the economy in the form of wage deduction, loans, or just be printed.  It re-enters primarily in the form of payment on mortgage/rent and basic survival necessities such as food and energy.  While it does serve to maintain these industries, it does little or nothing stimulate job creation.

Secondly with each extension of benefits, pressure on businesses to hire decreases, as does pressure on job seekers to market, and general confidence in the economy.  The longer job seekers stay out of the market, the less likely they are to acquire employment.

I had a candidate tell me just last week, when I asked him about the hole in his resume, that he had been "waiting until the economy gets better to look for a job."  He then added that "he has 2 weeks until his benefits run out."  Do you think we will hire this guy?

Carney estimates that unemployment could create up to one million jobs this year.

[AquaMan]

Is there something untrue in what Carney said? No.

Is there something misleading in characterizing his remarks as "confirmation of a job creating strategy"? Yes

Are you losing credibility with each anti-Obama, anti-dem, negative spin? Yes

If you are so incensed by the practice, then by all means get your TP buddies in Congress to shut the valve on unemployment compensation and watch the economy dwindle to riot status.

I am currently unemployed but refuse to apply because I know the repercussions that ensue when employers with your attitude note gaps and punish accordingly without regard to circumstances. I did file against Cities Service Oil when they arbitrarily released me in exchange for a long term co-worker not suing them for gender discrimination back in the day. Seems she thought her tenure was more important than my degree. Like many people, it was for revenge and gave me a chance to catch my breath and start over.

[Cats Cats Cats]

I am sure it doesn't "create" jobs.  But keeps jobs.  I am sure if 10% of your households stopped paying their electricity bill then the power companies would want to lay people off.

[Gaspar]

I am sure it doesn't "create" jobs.  But keeps jobs.  I am sure if 10% of your households stopped paying their electricity bill then the power companies would want to lay people off.

I agree, but to sell it as a jobs program is really sad. . .or at least sadder. It's an indication that "more of the same" is all we will be offered.

We should never be in a situation where increasing unemployment benefits is the first direction we run.  That is a reactive position. 

There are so many things we could do, should have done, can still do, but won't. There are so many things that we have done in the past, can do again, and have always succeeded, but won't consider.

We are simply stuck until the next election, and that's sad.

[we vs us]

There are so many things we could do, should have done, can still do, but won't. There are so many things that we have done in the past, can do again, and have always succeeded, but won't consider.

I agree with these sentences entirely. Sadly, though, I think those things that you're referring to are entirely different than the things I'm referring to.  Which is where the issue really lies.

[Gaspar]

I agree with these sentences entirely. Sadly, though, I think those things that you're referring to are entirely different than the things I'm referring to.  Which is where the issue really lies.

No.  The issue is that you and I are vastly different in our political views.  Diabolically diverse.  However the sad part is that we can both agree to the above.

That is why I believe we will be stuck until the next election.

[Cats Cats Cats]

I agree, but to sell it as a jobs program is really sad. . .or at least sadder. It's an indication that "more of the same" is all we will be offered.

We should never be in a situation where increasing unemployment benefits is the first direction we run.  That is a reactive position.  

There are so many things we could do, should have done, can still do, but won't. There are so many things that we have done in the past, can do again, and have always succeeded, but won't consider.

We are simply stuck until the next election, and that's sad.

Well, it is a stimulus program targeted towards people that used to work.  I say its way better than mailing out another check to everybody.  Is stimulus a jobs program?  Is firing all government workers a jobs program?

[nathanm]

Yes, Gaspar, there is in fact a rash of people who aren't actually looking for gainful employment, but are instead subsisting on around 40% of their previous pay, just because they're lazy.

But yeah, UI doesn't really create jobs, it just slows down the death spiral to a point where it can be controlled, presuming the political will to control it exists. I can understand why you don't like it, though. You seem to be eagerly anticipating a deflationary spiral, what with your comments about hard money the other day. I'm slowly becoming convinced that we'll see exactly that quite soon, so bully for you.

[Conan71]

Well, it is a stimulus program targeted towards people that used to work.  I say its way better than mailing out another check to everybody.  Is stimulus a jobs program?  Is firing all government workers a jobs program?

Sure it's better than a pigeon drop of a one time stimulus because it's recurring.  However, both means don't create productivity.  The government is paying people to be idle.  Of course, the next question is "What do you expect them to do?  Allow unemployed people to starve?"

Of course I don't want those people to starve.  But referring to unemployment as some sort of a jobs program illustrates a true disconnect with what creates jobs.  This administration consistently shows a complete lack of understanding of how to create jobs which is so poor, it's never been seen before by any previous administration.  

This has nothing to do with a bias against Democrats or liberal policy.  I'd call it out just as harshly on McCain were making the same mistakes right now.

[Gaspar]

We have good news.  As soon as President Obama gets back from his 10 days on the Vineyards, he is going to unveil his Jobs Plan.  This is the plan we've been waiting for. . . 3 Years in the making, this plan is designed to give lower and middle class voters a reason to vote jobs.

Seeking to jolt the economy, President Barack Obama will propose new ideas to create jobs and help the struggling poor and middle class in a major speech after Labor Day. And then he will try to seize political advantage by spending the fall pressuring Congress to act on his plan.

http://hosted.ap.org/dynamic/stories/U/US_OBAMA_JOBS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2011-08-17-07-07-10

Of course we've had hints as to what's going to be in the plan.  In a candid slip this week President Obama's Secretary of Agriculture Tom Vilsack indicated that more food stamps will be part of the program, and White House Press Secretary Carney indicated that more jobs would be linked to more unemployment benefits. We can also make a reasonable assumption that the plan will include extending the payroll tax deduction, and $250 billion in extra stimulus money for green jobs.

I am so excited to hear what else in in the plan.  There is going to be fainting, and teleprompters, Henrietta Hughes, and it's just going to be like old times. This is going to be the longest 10 days for me.

[Townsend]

We have good news.  As soon as President Obama gets back from his 10 days on the Vineyards, he is going to unveil his Jobs Plan. 

Well, that is good news.

Getting any plans from your people too?  Let's see all of their plans.  I bet they're super.

Your posts...

[Gaspar]

Well, that is good news.

Getting any plans from your people too?  Let's see all of their plans.  I bet they're super.

Your posts...

Eliminate Obamacare and deregulate the sale of private insurance across state borders.
Adopt the concepts of Cut, Cap, and Balance, and get our AAA rating back. 
Simplify the tax code (pick a plan as long as it doesn't raise taxes).
Heal unemployment by restoring it to it's previous limits.
Stop talking about businesses and the rich like they are enemy's, they are not, they are goals!
Then if their's time, eliminate almost all government agencies who's name starts with "The Department of. . ."

You are probably not real keen on that plan though.

[Townsend]

You are probably not real keen on that plan though.

If it was implemented by the government in power right now, you'd still be "not real keen" on it.

That's how you post.  It's why people tend to blow you off.

[Gaspar]

If it was implemented by the government in power right now, you'd still be "not real keen" on it.

That's how you post.  It's why people tend to blow you off.

Well that is something to think about.

[Townsend]

Well that is something to think about.

Well it sure is.