Have a listen here.
In a recent NBC interview, President Obama blamed ATMs for taking away bank tellers’ jobs, and computerized airline check-in kiosks for eliminating aviation jobs. Communications Coordinator Lee Doren points out that innovation doesn’t affect the number of jobs so much as the types of jobs. Accomplishing more while using less labor is actually the key to prosperity. People looking for an explanation for today’s high unemployment need to look elsewhere.
Posted in CEI Podcast, Economics
Tagged atms, basic economics, cafe hayek, causes of unemployment, Don Boudreaux, econ 101, economic fallacies, Economics, jobs, jonah goldberg, lee doren, luddites, obama, obama atm, president obama, unemployment
“I have decided to repeat George Bush’s mistakes.”
The House passed a budget enforcement resolution yesterday. It sets 2011’s discretionary spending $7 billion below what President Obama has requested.
Next year’s discretionary spending target is $1.12 trillion for next year. The $7 billion difference represents savings of 0.625 percent. Barely a rounding error. If total spending (including mandatory and defense spending) ends up at $3.5 trillion next year, the savings becomes 0.2 percent.
Of course, 2010 discretionary spending was $1.39 trillion. 2011 spending will very likely end up much closer to that than the targeted $1.12 trillion. The appropriations process is not kind to non-binding resolutions, however well-intentioned. Especially when the resolution “doesn’t detail how Congress should reach that [deficit reduction] goal.”
Congress lacks the will to cut $270 billion of spending. The interests benefitting from that spending will scream bloody murder the second their programs are put on the chopping block. In an election year when incumbents are more fearful than usual, no politician worth his salt wants to cause an uproar.
Congress need not worry too much, though. Even in anti-incumbent years, re-election are almost always above 90 percent. The vast majority of congressional turnover happens through retirement, running for other office, or death.
The pattern is holding this year, so far. The University of Virginia’s Larry Sabato recently pointed out that 5 incumbents have lost their state primary elections this year, while 240 were re-nominated. That’s a 98 percent success rate. There will be a few more casualties, especially in the November general elections.
Most members are safe. They can, and should, rock the boat by cutting unnecessary spending. If anything, the most aggressive cutters might become folk heroes like Chris Christie in New Jersey. They just don’t have the guts.
I will be more than happy if Congress proves me wrong. We’ll find out over the next few months.
Posted in Economics, Elections, Political Animals, Spending
Tagged budget enforcement resolution, chris christie, congress, deficits, election 2010, incumbents, larry sabato, nonbinding resolution, obama, president obama, Public Choice, spending, spending cuts, trillions, university of virginia
March 31 was Cesar Chavez Day. It has been celebrated in California for some time. A few other states also recognize the holiday. But this year, for the first time, it was a national holiday.
The trouble is that nobody knew it at the time.
On April 2, the White House filed a Presidential Document declaring the holiday. It ran in the April 5 Federal Register, five days after the fact.
You’d think this would have been announced in advance. But Chavez remains a controversial figure. And the gesture will be seen by President Obama’s adversaries as yet more evidence of his capture by labor interests.
The president could rebut those charges directly. Instead he actively avoided confrontation, which is one way of admitting guilt.
The Senate just passed an $18 billion spending bill. Since the House already passed it, the legislation is now headed to President Obama’s desk to await his signature and become law.
The hope is that the spending will create jobs. If you’re reading this blog, then you probably know enough about economics to know that isn’t what will actually happen. Remember: anything that Washington giveth, it must first taketh away from somewhere else. It’s a zero-sum game. All those new jobs that politicians will be touting for the cameras will have come at the expense of other jobs elsewhere. On net, they’re not creating a thing.
Take the payroll tax break for small businesses that’s in the bill. Yes, those small businesses benefit. Maybe the money they save will even be used to hire more workers. That’s easy enough to see. But that money had to come from somewhere. That is harder to see. Too hard for the Senate to see, at the very least.
The reason is this: the government is foregoing some payroll tax revenue. But since it isn’t cutting spending to match, it has to borrow more. And there’s only so much investment capital to go around. Because Washington is borrowing more, less is left over for private investment opportunities. At the very least, companies will have to offer investors higher interest rates to lure them away from government bonds.
That makes getting loans more expensive. And when something gets more expensive, there tends to be less of it. Because of today’s bill, about $18 billion less capital will be available for the private sector to create jobs.
The legislation the Senate passed today is no jobs bill, at least on net. It is a spending bill. It doesn’t create jobs, it only redirects them.
Posted in Economics, Spending, Stimulus
Tagged barack obama, billions, creating jobs, Economics, jobs, jobs bill, jobs saved or created, obama, overspending, president barack obama, president obama, profligate spending, senate, spending, Stimulus, unemployment, us senate
George Will has a good column today. He does a wonderful job contrasting Hayek’s philosophy of humility before complexity with the early 20th-century progressive mindset of planning and scientistic design. The framework applies surprisingly well to today’s health care debate, with President Obama playing the role of Woodrow Wilson. Very thought-provoking.
Posted in Economics, Health Care, Philosophy, Political Animals
Tagged barack obama, george will, hayek, Health Care, health care debate, health care reform, humility, obama, president obama, progressive, progressivism, uncertainty, woodrow wilson