Keynesian Economics

Trump’s “for every new regulation 2 have to go”

Published by Papa Giorgio

The reason for bringing two older posts (2022 and 2021) together and combining them with this Forbes article about Trump’s promise is simple… the Republican base wants less government interference – that is me, the GOP base. The Democrat base wants increased government interference in our daily lives.

Why this “adding of the FORBES article” as a preface of these other posts?

I was asked on the way out of a gathering by a family friend over this past weekend “why I [she] should vote for Trump?” I believe the question COULD HAVE BEEN asked for varying reasons, and as I write a couple of them, keep in mind the opposite could be true:

  • She is a diehard Democrat who is honestly is trying to understand the opposing view of almost half of the voting public. (Alternatively, she thinks that there is no foundation or good reason to vote for Trump and is trying to show the superiority of being “anti-racist” [in modern parlance] or progressive to the point that her vision of caring for the downtrodden is a way to “show up” [so-to-speak] the other side by being on the side of angels.);
  • She is a life-long Democrat who sees the attacks on things such as free-speech and gender and is dismayed on how quickly the political culture of her party has changed and is struggling with where her vote should land. (Alternatively, she supports these agendas, whether in good faith or not [based on false agendas and political propaganda] and is dismayed by the Republican Party — which is defined with these ideas in mind:

sexist, intolerant, xenophobic, homophobic, Islamophobic, racist, bigoted (S.I.X.H.I.R.B.)

HILLARY’S version:

  • “You know, to just be grossly generalistic, you could put half of Trump’s supporters into what I call the basket of deplorables. Right? The racist, sexist, homophobic, xenophobic, Islamophobic—you name it. And unfortunately, there are people like that. And he [Trump] has lifted them up.”

  • Etc, etc.

I think, as human beings – me included – are as complicated as the day is long and we battle many influences and experiences and habits… it would be in some measure a combination of all of the above and much more. I carry many prejudices and experiences that I try to temper with faith, accountability, and checking myself through reading and discussion [putting my viewpoint out in the public to be peer reviewed – sorta].

The largest difference I can point out between her political and economic viewpoint vs. my demographic of religiously conservatarianism is that she thinks mankind and men/women in general are good people… and I believe they are corrupted and fallen in the real sense of original sin.

These two opposite views come out in different senses, say, economics by way of example. Keynsian Economics, the guiding principle founder of much of the Democrat Party’s direction of their economic planning:

John Maynard Keynes hailed the Soviet Union in a 1936 radio interview as,

“engaged in a vast administrative task of making a completely new set of social and economic institutions work smoothly and successfully.”

And in a preface he wrote to the 1936 German edition of his General Theory of Employment, Interest, and Money, Keynes stated that his economic theory,

“is much more easily adapted to the conditions of a totalitarian state” than to “conditions of free competition and a large measure of laissez-faire.” (this quote and the above is from James Bovard’s book Freedom in Chains: The Rise of the State and the Demise of the Citizen, pp. 14,20,21)

Another Keynes quote lets the individual in on the result of his theories, which most nations use (i.e., central banking; e.g., the Federal Reserve Bank):

“By a continuous process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method, they not only confiscate, but they confiscate arbitrarily; and while the process impoverishes many, it actually enriches some . . .. The process engages all of the hidden forces of economic law on the side of destruction, and does it in a manner that not one man in a million can diagnose.”  (Partially quoted from Money Mischief: Episodes in Monetary History, by Noble Prize holder in economics, Milton Friedman.)

This last quote is what happens with Keynesian economics!  An unseen taxation of citizens, on top of normal taxation.

Versus

According to Adam Smith, it is when the businessman “intends only his own gain” that he contributes— via the process of competition— to promote the social good “more effectually than when he really intends to promote it.” Smith added: “I have never known much good done by those who affected to trade for the public good.”

Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (New York: Modern Library, 1937), p. 423; from, Thomas Sowell, A Conflict of Visions: Ideological Origins of Political Struggles (New York, NY: basic Books, 2007), 57.

I can imagine no man who will look with more horror on the End than a conscientious revolution­ary who has, in a sense sincerely, been justifying cruelties and injustices inflicted on millions of his contemporaries by the benefits which he hopes to confer on future generations: generations who, as one terrible moment now reveals to him, were never going to exist. Then he will see the massacres, the faked trials, the deportations, to be all ineffaceably real, an essential part, his part, in the drama that has just ended: while the future Utopia had never been anything but a fantasy.

C.S. Lewis, The World’s Last Night, p. 131.

Of all tyrannies, a tyranny exercised for the good of its victims may be the most oppressive. It may be better to live under robber barons than under omnipotent moral busybodies. The robber baron’s cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience. They may be more likely to go to Heaven yet at the same time likelier to make a Hell of earth. Their very kindness stings with intolerable insult. To be ‘cured’ against one’s will and cured of states which we may not regard as disease is to be put on a level of those who have not yet reached the age of reason or those who never will; to be classed with infants, imbeciles, and domestic animals.

  1. S. Lewis, God in the Dock, p. 292.

My own affections have been deeply wounded by some of the martyrs to this cause [the French Revolution], but rather than it should have failed, I would have seen half the earth desolated.

Thomas Jefferson, Letter of January 3, 1793, The Portable Thomas Jefferson, ed. Merrill D. Peterson (New York: Penguin Books, 1975), p. 465; from, Thomas Sowell, A Conflict of Visions: Ideological Origins of Political Struggles (New York, NY: basic Books, 2007), 29.

Simply put, one side thinks mankind can qualitatively guide by elitism our economy and lives, whereas the other side does not. “The larger the government the smaller the individual.”

So, with this unnecessarily long introduction, let us get into the FORBES article:

Bookending four years of its infamous one-in, two-out requirement for issuing significant new regulations, the Trump administration quietly just released its status roundup called “Regulatory Reform Results for Fiscal Year 2020.”

According to the administration, agencies in the 2020 fiscal year issued 145 deregulatory actions and 45 significant regulatory actions, for an out-to-in ratio of 3.2 to one.

Of those deregulatory actions, 58 were deemed “significant” by agencies and the administration. Comparing significant-in to significant-out still gives a ratio of 1.3 to one.

[….]

The overall ratio for the entire four-year stretch is 2.5 to one. And since rules considered non-significant may be used to offset significant rules added per E.O. 13,771, the ratios are actually better, as each year’s respective roundup at the White House shows.  

We are not engaging here the debates over whether the cuts in regulations are genuinely highly significant or overblown. Employing different methodologies, the Council of Economic Advisers for its part estimated far more savings from a separate set of Trump-era reforms than the OMB’s year-end reports have claimed. 

But nor does this survey address the warning signs of Trump’s own regulatory actions taken, sometimes of the sort that do not appear in White House Office of Management and Budget compilations. Examples include antitrust regulation, regulation of online content (or the pursuit of it), federal guidance on artificial intelligence, trade restrictions and more. These are capable of swamping regulatory savings.

Note also that E.O. 13771 did not apply to non-significant rules added (although in the year-end updates and in the new Unified Agenda editions, these “Regulatory” actions were also identified). Nor did the Trump order apply to rules mandated by Congress as opposed to ones driven by agency discretion; nor to rules from the so-called independent agencies like the Federal Communications Commission and the Consumer Financial Protection Bureau.

In any event, the leading edge of the one-in, two-out has been the claimed capping of spending rather than the ratio of cuts to additions. Criticisms notwithstanding, other presidents have not implemented a program as ambitious as Trump’s.

We know the generation of new regulations dropped significantly under Trump. But in terms of rollbacks, it would naturally become harder for an administration acting alone (with no help from Congress) to pick the “significant deregulatory action” fruit over time capable of generating rapid rule and cost rollbacks. Major rollbacks like those involving Clean Power Plan and Waters of the United States rules entail years of public consultation, writing, and legal challenges. 

So, for the record and for posterity, Table 1 below presents the inventory of the significant regulatory actions eliminated by the Trump administration per E.O. 13,771, broken down by agency as derived from the administration’s fiscal year 2020 chart. Table 2 presents the significant regulations added….

So, was it as “successful” as Trump said or hoped it to be.

No.

Sounds like a politician or contractor to me – no surprise there.

Was it successful in shrinking control over the American business man/woman?

Yes….

which leads into why we should all want to shrink the role of government in our every-day lives:

TWO OLDER POSTS

Here are the two articles mentioned in the below audio by Armstrong and Getty (Hour 1 Thursday, and Hour 3 – same day):

  • America’s Welfare State Is on Borrowed Time — Biden has fully embraced the mad goal of giving 98% of the population lavish benefits at no cost. (WALL STREET JOURNAL | THE RED LINE [no pay wall])
  • Democrats Are Killing the American Dream — Joe Biden’s American Families Plan replaces individual striving with middle class entitlements. (WALL STREET JOURNAL | BLACK REPUBLICAN)

REASON.COM has been on fire as of late:

Since the start of the Covid crisis, the American economy has been turned on its head. Times are good for the big guys — Big Business and Big Government. But what about for the small business owner, the personification of the American dream? Carol Roth discusses Crony Corporatism/Capitalism and is the author of, “The War on Small Business: How the Government Used the Pandemic to Crush the Backbone of America“

UPDATED my “BAM! What Is Crony Capitalism“ with this Prager U video.

Birtherism

Published by Papa Giorgio

(I am changing some of my “Pages” to “Posts,” so some of this info is older to my site)

This is a discussion between myself and a black, lifelong Democrat. He intimated to me that he would never vote Republican because of the party’s racism. Okay. I asked him to provide me with one example or evidence of racism from Republican leaders. He offered me “birthirism.” Birthers are people who believe Obama was born in Kenya, and thus, not able to be President. Let us begin

What are our options with birtherism? Options:

a) Either the conspiracy theories are true, or;
b) He lied to gain access and recognition at Occidental College/Harvard/Columbia an/or at his publisher… similar to Elizabeth Warren;
c) The media made this up whole cloth.

Why do I only allow for the above two options? Let me explain and then we will continue with the response.

FIRSTLY, I truly believe Obama was born in Hawaii. In other words, I am NOT a birther in the true sense of the words meaning.

That being said, I do believe he lied about this in order to get more opportunities for educational as well as more opportunities to get published. I say this BECAUSE of the following evidence, which is: that only a few months after Obama threw his hat officially into the 2008 Presidential run, his publisher scrubbed their site of the following. And mind you, the following could not have happened without Obama’s consent/knowledge:

Obama’s literary agent changed Barack Obama’s bio page in April 2007, two months after he announced his run for President of the United States in February 2007. Before that, Obama’s bio said he was born in Kenya.

So, we can rid option “c” from above… we now know this was not a “hit job” by a “vast right-wing conspiracy.” Here is an highlighted portion of the above which was on Obama’s publishers website from 1995-to-2007(to the right).

The media is not that smart to foresee into the future like that and plant said evidence with full-knowledge of Obama. So we have “a” and “b” left.

a) Either the conspiracy theories are true, or;
b) He lied to gain access and recognition at Occidental College/Harvard/Columbia an/or at his publisher… similar to Elizabeth Warren;

Again, to be clear, I reject birtherism (“a”), but doing so doesn’t mean that common sense can say the following:

  • Obama was the first “birther.”

In 2003 for instance, when his publisher published Barack Obama’s book, Dreams of My Father, they wrote that Barack Obama was born in Kenya in their own promotional material (Gateway Pundit). Either way there is “some splainin’ to do Lucy.”

Back to the aforementioned Elizabeth Warren. Ann Coulter’s comments on Warren:

“Warren’s lie is outrageous enough to someone like me, who isn’t a fan of race-based affirmative action programs. Still, she is a liar, and she stole the credit of someone else’s suffering. For liberals, it should be a mortal sin: Elizabeth Warren cheated on affirmative action.”

If true of Obama… he would be doubly guilty of this mortal sin. One commentator on my FaceBook made this astute point that “Either way, Joe Wilson was right! He lies!”

BACK to the options.

a) Either the conspiracy theories are true, or;
b) He lied to gain access and recognition at Occidental College/Harvard/Columbia an/or at his publisher.

We know the more modern theory was started by the Hillary camp during the contentious campaign between her and Obama (audio to the right). We also have the long-form birth certificate… as well as the birth announcements of Obama from Hawaii when he was born (from two papers: [1961] Honolulu Advertiser; and, [1961] Star Bulletin). So we can exclude “a,” that the conspiracy theories are true.

So, I am inclined to believe “b,” but more importantly… over the years I have been inundated with the “racist” label by those assuming I am a “birther.” So this is why I wanted to expand my thinking on this.

Let us expose the “racism” portion of this a bit more with an example from ThinkProgress (the title of the article is “9 Most Racist Moments of the 2012 Election“) that racism is in the root cause of this conspiracy rather than hyperbole. For instance they quote in their #1 example the son of a Republican, Jason Thompson:

Jason Thompson told a crowd of supporters at a brunch that “we have the opportunity to send President Obama back to Chicago — or Kenya.” Thompson is the son of former Wisconsin governor Tommy Thompson, who is now running for Senate. In attendance at the brunch was Reince Priebus, the chairman of the Republican National Committee.

In the original challenge by a friend, he stated that Republicans have racist tendencies, provable by their support of birther conspiracies. So my new question is this:

“If Obama used this canard [that he was born in Kenya] in order to receive more accolades or recognition at Harvard and/or his publisher, would this be evidence that he is racist”?

This is obviously hyperbole. But let’s say Jason really believed Obama was born in Kenya… I still cannot see “racism” in this remark. But this claim of racism cuts both was, as we will see. So, here are the four areas I will compare this “racism” claim made about being a birther and this being the best example a life-long Democrat can use to show “Republican racism.”

1) Dem vs. Repub % of belief in conspiracies;

2) what type of conspiracy?;

3) Who believed these conspiracy theories;

4) What is my point?

1) PERCENTAGES

(Speaking to my Democratic detractor) You are aware, I am sure, that the birther story was first started by a Democrat and the story made popular via Hillary Clinton.

For instance, Politico says this in one of their classic articles:

…Where did this idea come from? Who started it? And is there a grain of truth there? The answer lies in Democratic, not Republican politics, and in the bitter, exhausting spring of 2008. At the time, the Democratic presidential primary was slipping away from Hillary Clinton and some of her most passionate supporters grasped for something, anything that would deal a final reversal to Barack Obama. The theory’s proponents are a mix of hucksters and earnest conspiracy theorists, including prominently a lawyer who previously devoted himself to ‘proving’ that the Sept. 11 attacks were an inside job. Its believers are primarily people predisposed to dislike Obama. That willingness to believe the worst about officials of the opposite party is a common feature of presidential rumor-mongering: In 2006, an Ohio University/Scripps Howard poll found that slightly more than half of Democrats said they suspected the Bush Administration of complicity in the Sept. 11 attacks….

(Politico)

So not only would Obama in 1995 would have to of intimated the idea that he was born in Kenya in 1995, here [above] Politico traces the “birther” beginnings to a Democrat. Let us digest this a bit.

I am combining the above with polls from Rasmussen (and others compiled at WIKI) that show an amazing thing. What is this “amazing thing,” you rightly ask?

Democrats in America are evenly divided on the question of whether George W. Bush knew about the 9/11 terrorist attacks in advance. Thirty-five percent (35%) of Democrats believe he did know, 39% say he did not know, and 26% are not sure. 

(RPT)

Not sure? Not sure? To be clear, Democrats by over a majority believed Bush either knew directly or they said they were [basically] “still on the fence.” Here is more:

I’ve been looking for a good analogue to the willingness of Republicans to believe, or say they believe, that Obama was born abroad, and one relevant number is the share of Democrats willing to believe, as they say, that “Bush knew.”

There aren’t a lot of great public numbers on the partisan breakdown of adherents to that conspiracy theory, but the University of Ohio yesterday shared with us the crosstabs of a 2006 poll they did with Scripps Howard that’s useful in that regard.

“How likely is it that people in the federal government either assisted in the 9/11 attacks or took no action to stop the attacks because they wanted the United States to go to war in the Middle East?” the poll asked.

A full 22.6% of Democrats said it was “very likely.” Another 28.2% called it “somewhat likely.”

That is: More than half of Democrats, according to a neutral survey, said they believed Bush was complicit in the 9/11 terror attacks….

(Politico)

What is the percentage of Republicans that believed (at it’s height of belief) Obama was not born in America?

  • 31% of Republican think/thought that Obama was not born in the states…

How many Democrats?

  • 15% of Democrats believe the same… [well as 18% of Independents]

However, a third who believe him to be born out of the country approve of him (ABC-News and my RPT post).

2) WHAT KIND OF CONSPIRACY?

So we have two conspiracies to compare and contrast: 9/11 culpability, and birtherism. What do they show? Are their differences? Let’s work through these. One, birtherism, has a belief held that a person was born out of country, and that other people covered this up.

In other words… when Obama was a child/infant other adults made this happen. He, Obama, was powerless to affect it. Obviously, he was an infant or child. In fact, assuming the conspiracy true and giving the most leeway of the options behind it… Obama may not have known about this until his Presidential run.

What about 9/11?

This conspiracy asserts that a leader of these United States knew of the coming attack and allowed it to happen, thus killing fellow citizens and going to war over it [for oil, a myth]. Thus, murdering more Americans in a war over a conspiracy to profit.

Many of these Democrats also believe Bush was involved in making this happen (HotAir). So this conspiracy would be considered — if we had an evil scale — much more “evil” because it is an American in the highest office basically directly culpable for the death of innocent people.Evil Scale

It doesn’t take a rocket scientist for an outside observer to say, “whoa, whoa, whoa… calm down DEMOCRATS! Yeah this other conspiracy [birtherism] is nuts, but it doesn’t posit such an overtly evil act.”

in other words a much larger number of Democrats are on the “fringe” and would be called racist if they were Republicans, for their crazy opposition to a black President. LIKE Republicans are called racist for their birtherism position. Which would also include the 15% of Democrats being equally racist who believe in this birther theory.

3) MAGAZINES, PUNDITS, AND LEADERS

Here is what the Left believes to be a radical, extreme right pundit, Ann Coulter. Her point is instructive, which is, no one in the major influence of the conservative/Republican believes this conspiracy (see Ann Coulter reject birtherism — to the right):

NOTE: not a single mainstream right-wing talk show host believed this (I should stipulate that I listen to Rush Limbaugh, Dennis Prager, Michael Medved, Hugh Hewitt, and Larry Elder). None of these conservative talk show hosts believed this. In fact, Michael Medved typically takes calls that disagree with him — which led to some great excoriation of this birther conspiracy (here are some of those calls).

I tackled the subject back in 2010 on my old blog, it on my old blog as well as my new site. And I am as conservative as you can get!

The next LOGICAL question becomes who in congress or Democratic leadership believed Bush knew? To name a few: Rep. Dennis Kucinich; Rep. Cynthia McKinney; Congressman Alan Grayson, etc.

4) What Is My Point?

Simply my point is this:

1) The complexity of the seemingly simple “around the cooler” accusation that birtherism equals racism is never addressed. If Republicans are painted as racist, then so to must Democrats since a large percentage of them are “birthers,” not to mention Obama was the O.G. birther and recent birtherism was pushed by Hillary Clinton’s camp.

Simply painting your opponent as bigoted or racist sounds good if one wishes to label and dismiss opposing viewpoints. It is the easy way out for the lazy of mind.

2) If such beliefs make Republicans racist or bigoted, how much more are Democrats with their larger fringe group pushing a theory that infers Bush was personally involved with this act?

3) Since almost all major conservative/Republican magazines, pundits, radio hosts, and Congressmen reject “birtherism,” and many more liberal/Democratic magazines, pundits, radio hosts, and elected-officials believed their own 9/11 theories AND birtherism to some extent… how does this paint the people pushing these conspiracies?

In other words, Republicans at least say Obama was lying about his place of birth in order to get special preference in educational and publishing opportunities; at most saying that Obama later found out about other peoples lies in getting him over to America as a child and tried to cover it up for his Presidential run.

On the other-side of the coin, you have Democrats saying that [at least] Bush knew about the pending attack and allowed it to happen in order to financially profit from a war[s]. At most they say he was actually involved in the taking down of the Trade Towers in order to go to war. BOTH options Bush is culpable for the murder of innocent and military lives.

BIG DIFFERENCES!

Food Stamp Mantra[s] from Democrats Rebutted

Published by Papa Giorgio

Michael Medved responds to the food stamp issue that Democrats and the Left are bringing up. I take a clip from yesterday’s show and insert it into the middle of today’s show to give the listener some ammunition when these banal arguments come up. At the 5:17 mark, the caller mentions taxes for the millionaires as part of his argument. Medved Responds well to this challenge at the… and at the 6:24 mark you hear the caller respond with a bumper sticker jingle. In other words, talking about facts matters little to these people, but at least you will be able to influence those around you eavesdropping in on the conversation.

I posted this video on LIVELEAK, and a comment got me “clicking around” the internet to test what the person said. Here is the comment:

For every $1 spent on food stamps there’s a $1.80 stimulative effect to the economy. The poor person spends the funds at the grocery store, which allows the store to employ more people, the store spends the funds to buy more food which helps farmers and food producers. On the other hand, tax cuts for the wealthy have a negative effect on the economy, it just doesn’t trickle down enough so it drains economic growth. Plus it helps feed poor people that can’t afford to eat. — Warren H.

First, it should be noted that this idea was championed mainly by Moody’s chief economist Mark Zandi, a hard-core Keynesian. However, it should be noted that unfortunately “for Zandi, there has never been any empirical evidence of the Keynesian multiplier.  Government doesn’t take one dollar and turn it into more by spending it.  God doesn’t live in the White House, no matter how much Paul Krugman prays.” (AMERICAN THINKER)

HERITAGE FOUNDATION puts it like this:

…The Keynesian argument also assumes that consumption spending adds to immediate economic growth while savings do not. By this reasoning, unemployment benefits, food stamps, and low-income tax rebates are among the most effective stimulus policies because of their likelihood to be consumed rather than saved.

Taking this analysis to its logical extreme, Mark Zandi of Economy.com has boiled down the government’s influence on America’s broad and diverse $14 trillion economy into a simple menu of stimulus policy options, whereby Congress can decide how much economic growth it wants and then pull the appropriate levers. Zandi asserts that for each dollar of new government spending: temporary food stamps adds $1.73 to the economy, extended unemployment benefits adds $1.63, increased infrastructure spending adds $1.59, and aid to state and local governments adds $1.38. Jointly, these figures imply that, in a recession, a typical dollar in new deficit spending expands the economy by roughly $1.50. Over the past 40 years, this idea of government spending as stimulus has fallen out of favor among many economists. As this paper shows, it is contradicted both by empirical data and economic logic…

They then respond to the above:

The Evidence is In

Economic data contradict Keynesian stimulus theory. If deficits represented “new dollars” in the economy, the record $1.2 trillion in FY 2009 deficit spending that began in October 2008–well before the stimulus added $200 billion more–would have already overheated the economy. Yet despite the historic 7 percent increase in GDP deficit spending over the previous year, the economy shrank by 2.3 percent in FY 2009. To argue that deficits represent new money injected into the economy is to argue that the economy would have contracted by 9.3 percent without this “infusion” of added deficit spending (or even more, given the Keynesian multiplier effect that was supposed to further boost the impact). That is simply not plausible, and few if any economists have claimed otherwise.

And if the original $1.2 trillion in deficit spending failed to slow the economy’s slide, there was no reason to believe that adding $200 billion more in 2009 deficit spending from the stimulus bill would suddenly do the trick. Proponents of yet another stimulus should answer the following questions: (1) If nearly $1.4 trillion budget deficits are not enough stimulus, how much is enough? (2) If Keynesian stimulus repeatedly fails, why still rely on the theory?

This is no longer a theoretical exercise. The idea that increased deficit spending can cure recessions has been tested repeatedly, and it has failed repeatedly. The economic models that assert that every $1 of deficit spending grows the economy by $1.50 cannot explain why $1.4 trillion in deficit spending did not create a $2.1 trillion explosion of new economic activity.

(read it all)

CATO likewise notes that the numbers were fudged to provide exaggerated outcomes:

Food stamps are effective economic stimulus. Led by Mark Zandi and other Keynesian economists, food-stamp advocates have made wildly exaggerated claims about the program’s role in stimulating the economy. Zandi, for instance, claims that “extending food stamps is the most effective way to prime the economy’s pump.”

But aside from the fact that those economic models just as well predict an alien invasion would be a boon to the economy, there is little evidence to support the theory. Even the Agriculture Department’s own inspector general concluded that it was unable to determine whether the additional dollars in the stimulus’s food-stamp expansion were in any way effective in meeting the 2009 Recovery Act’s goals. Three of the four performance measures the program was supposed to use, the office found, “reflected outputs, such as the dollar amount of benefits issued and administrative costs expended” and did not provide any insight into outcomes.

On the other hand, we do know that a failure to get government spending under control will have long-term economic consequences. Food stamps are hardly the major cause of deficits and debt — that distinction lies with middle-class entitlements such as Social Security and Medicare — but every little bit helps.

Valerie Jarrett and Nancy Pelosi said similar things:

  • JARRETT: Let’s face it: Even though we had a terrible economic crisis three years ago, throughout our country many people were suffering before the last three years, particularly in the black community. And so we need to make sure that we continue to support that important safety net. It not only is good for the family, but it’s good for the economy. People who receive that unemployment check go out and spend it and help stimulate the economy, so that’s healthy as well.
  • PELOSI: Economists agree that unemployment benefits remain one of the best ways to grow the economy in a very immediate way. It immediately injects demand into our markets and increases employment. For every dollar spent on unemployment benefits, the economy grows by, according to one estimate, $1.52; by others, $2. So somewhere in that range, but much more than is spent on it…. We have a responsibility to the American people. These are people who have played by the rules, have lost their job through no fault of their own, and need these benefits in order to survive. So we must extend this insurance before the end of the year and we must extend it for at least a year. And I’d like to see that as we go forward before this year ends. Hopefully it could be part of a budget, but it doesn’t have to be part of a budget. It could be in its own vehicle as it goes forward, but it’s something we must consider.

Again, similar responses happened then as well:

Economists at the Heritage Foundation have written about this claim, explaining:

The theory behind extending UI [Unemployment Insurance] benefits as a stimulus assumes that unemployed workers will immediately spend any additional UI payments, instantly increasing consumption, boosting aggregate demand, and stimulating the economy.

This is not a new idea. Economists in the 1960s thought that unemployment insurance could function as an important automatic economic stabilizer. Empirical research in the 1970s demonstrated that this was not the case, and studies since then have concluded that unemployment insurance plays at best a small role in stabilizing the economy. Empirical research at the state level also finds that UI plays a negligible role in stimulating the economy.

Studies that have found that UI stimulates the economy effectively — such as studies by the Congressional Budget Office and economist Mark Zandi — rely on two faulty assumptions, thereby drawing a false conclusion:

They assume that unemployed workers spend every dollar of additional UI benefits almost immediately and that extending unemployment insurance does not affect workers’ behavior. In that case, every dollar spent on unemployment insurance adds a dollar to consumption without any direct effects on the labor market. Both assumptions are false.

Unemployment Insurance Prolongs Unemployment. One of the most thoroughly established results in labor economics is the effect of unemployment benefits on unemployed workers’ behavior. labor economists agree that extended unemployment benefits cause workers to remain unemployed longer than they otherwise would.

This occurs for obvious reasons: Workers respond to incentives. Unemployment benefits reduce the incentive and the pressure to find a new job by making it less costly to remain without work…..

Paul Krugman Gets Rude Awakening

Published by Papa Giorgio

(Originally posted in July of 2012, re-posted as a response to Dennis Prager asking if Paul Krugman has ever debated anyone. RARELY, but here is one of the few examples)

Just so many know, Krugman never debates, and this is one of the only times I am aware of he has. From Video Description:

Tyler Durden submitted this much longer presentation (which I shortened) over at Zero Hedge, and points out the emotional clash between the two economists that is sure to be watched by the many free-marketers out there. Tyler entitled this posting, “The Ultimate Krugman Take-Down,” …he continues:

Forget Ali – Frazier; ignore Santelli – Liesman; dismiss Yankees – Red Sox; never mind Silva – Sonnen; the new undisputed standard by which all showdowns will be judged happened in Spain over the weekend. During a debate on Europe’s crisis, Pedro Schwartz (a mild-mannered Spanish ‘Austrian’ economics professor) took on the heavyweight Paul ‘I coulda been a Fed Chair contender’ Krugman, and – in our humble opinion – wiped the floor with his Keynesian philosophy. From the medicinal use of more debt to fix too much debt, to the Japanization of world economies and the demand-side bias of every- and any-thing – interested only in the short-term economic growth; the gentlemanly Spaniard notes, with regard to the European crisis, the fact that “Keynesians got us into this mess and now we have to sacrifice our principals so that they can get us out of this mess”. Humble and generous in his praise – though definitively serious with his criticism – Schwartz opines: “Often Nobel prize winners are tempted to pontificate on matters that are outside the specialty in which they have excelled,” noting “the mantle of authority whereby what ever they say – whether sensible or not – is accepted with resignation from some and enthusiasm by others.” Krugman’s red-faced anger is evident at the conclusion as he even refused to shake Schwartz’s hand after the debate.

Two Americans [Anti-Keynesians] Win Nobel Prize for Economics

Published by Papa Giorgio

Gateway Pundit has this:

Two anti-Keynesians won this year’s Nobel Prize for Economics.
Investor’s Business Dailyreported:

Failed Policy: The Nobel Prize for Economics goes to two Americans who have separately exposed the flaws in government stimulus spending. For a Keynesian president, it’s the Anti-Peace Prize.

When President Obama was awarded the Nobel Peace Prize during his first year in office, detractors said it was for doing nothing.

That can’t be said for Thomas Sargent of New York University and Princeton’s Christopher Sims, whose macroeconomics work has been of invaluable help to central bankers and other economic policymakers, and for which they now share this year’s economics Nobel.

Sargent’s discoveries in particular echo the rationale Republican leaders in Congress have presented in opposing the massive Democratic stimulus spending during the first two years of the Obama administration — that such spending seeks to give the economy nothing more than what House Budget Chairman Rep. Paul Ryan over the weekend aptly called a “sugar high.”

…(read more)…

Here is a good (as good as an economist’s presentation can be) presentation by Thomas Sargent:

A Keynsian End ~ Conservative MEP for South East England, Daniel Hannan

Published by Papa Giorgio

I have been a fan of Daniel Hannan for a while, but I think with the looming failure of the E.U. enterprise of borrow-borrow-borrow (similar to ours), this is a fitting post from him:

We are approaching end-game. Greece is supposed to pay off its next tranche of debts on 17 October, and the markets are now expecting what this blog has long predicted: a large-scale default. It is conceivable that another rescue package will be put together, and the collapse deferred for a few more months. Either way, though, Europe’s banks are staring at a Lehman moment. This is the tempest long foretold, slow to make head but sure to hold.

All the options now are bad. The least bad is a swift and orderly unbundling of the euro, allowing Greece and the other peripheral countries to devalue and begin exporting their way back to growth. The worst is to deny reality, to stagger on as now, and so to ensure that the catastrophe is all the more terrible when it comes. No prizes for guessing which option Brussels wants.

Shakespeare, as I never cease to remark, has something to say about every subject, including the way Eurocrats have brought this calamity upon themselves:

The plague of Greece upon thee, thou mongrel beef-witted lord!

I do wish to show one of his “tags” for his posting of the video (thumbs up): ,

Insane Keynesian Failure

Published by Papa Giorgio

This is the type of stuff that makes you understand how a whole economic school of thought fails the people who prop it up with their hard earned blood, sweat, and tears!

Obamas Economists: Stimulus Has Cost $278,000 per Job

…. The council reports that, using “mainstream estimates of economic multipliers for the effects of fiscal stimulus” (which it describes as a “natural way to estimate the effects of” the legislation), the “stimulus” has added or saved just under 2.4 million jobs — whether private or public — at a cost (to date) of $666 billion. That’s a cost to taxpayers of $278,000 per job.

In other words, the government could simply have cut a $100,000 check to everyone whose employment was allegedly made possible by the “stimulus,” and taxpayers would have come out $427 billion ahead.

Furthermore, the council reports that, as of two quarters ago, the “stimulus” had added or saved just under 2.7 million jobs — or 288,000 more than it has now.  In other words, over the past six months, the economy would have added or saved more jobs without the “stimulus” than it has with it. In comparison to how things would otherwise have been, the “stimulus” has been working in reverse over the past six months, causing the economy to shed jobs.

…(read it all)….

In His Own Words~Obama

Published by Papa Giorgio

This nugget comes from Sweetness and Light via Gateway Pundit.

Mission Accomplished. Obama told the “Today” Show back in 2009 that if the $787 billion stimulus failed he would be a one-term president.

President Barack Obama acknowledged Monday that the fate of his re-election four years from now likely rests on the success of the proposed $825 billion stimulus package.

“A year from now, I think people are going to see that we’re starting to make some progress. But there’s still going to be some pain out there,” Obama predicted during an interview on NBC’s “Today Show.”

“If I don’t have this done in three years, then there’s going to be a one-term proposition.”

In acknowledging that his political fortune hinges on the state of the economy, Obama urged the country to be patient in waiting for the stimulus to take effect.

Experts agree that America destroyed 1,000,000 private sector jobs with the failed stimulus.

And now we have this: