Commentary

If Democrats understand economics, then why is unemployment so high?

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First, Nancy Pelosi thinks that the productive people should pay people not to work. (H/T Hot Air)

What’s wrong with that?

Ed Morrissey writes:

  • “This is one of the biggest stimuluses to our economy” — No, it’s a net drain on the economy, although for understandable purposes.  It reroutes capital from production to non-production.  We are paying people who aren’t working by using capital that could otherwise go to creating jobs.  It’s a policy tradeoff and understandable, although not for 99 weeks, which is what Pelosi is attempting to extend further.
  • “It injects demand into the economy” — Not at the rate in which the capital gets destroyed.  Remember, the money for this program gets confiscated from producers and passed through the government bureaucracy to non-producers.  What winds up back in the hands of producers is much less than what left their hands in the first place.
  • “It creates jobs faster than almost any other initiative” — No, it doesn’t.  In fact, it depresses job creation, which is part of the policy tradeoff.  If this was right, we’d be at zero unemployment by now.  Tax cuts, especially on capital gains, creates jobs by getting capital into the hands of job creators.
  • “It’s impossible to think of a situation where we would have a country without unemployment benefits” — That’s not actually the debate.  No one is suggesting that we eliminate all unemployment benefits.  The debate is whether we will keep extending them further.

The trouble is here is that the federal government takes a cut for themselves whenever they redistribute money from one group to another. And the government doesn’t produce jobs as well as the producers they take the money from – because government is wasteful and inefficient compared to private business.

Hillary Clinton

Here’s a post from The Right Scoop showing what Hillary Clinton thinks of producers. (H/T ECM)

She says:

It’s important, too, that we look at how to promote broadly-based prosperity. One of the problems in societies around the world today is that too much of the productivity of the economies are going to too few. Too few people, the political and economic elite, are realizing the vast majority of benefits from economic activity. It’s true in my own country where, unfortunately, economic inequality is increasing. And it’s true in Ukraine. It’s true in Europe and Asia and Africa and South America. So part of the challenge of economic growth and prosperity is to make sure it gets down and equally spread among people.

When you take money from the few, and reward the many, it also helps you to get re-elected – because you’re buying more votes. Pretty soon, you have half the population paying no federal taxes and the top half of earners paying almost all the federal taxes. Eventually, the top earners realize that they are being bled dry by the the preening wealth redistributors in government, and they scale back their production and hiring, outsource their jobs to other countries, or leave the country entirely. And that’s why unemployment is at 10%. It’s something that leftists like Pelosi and Clinton never learned – they have no concern st all about how the people they rob will respond to being robbed. And it impoverishes us all when we punish the most productive members of society. Where do you think jobs come from? The poor?

Barack Obama

The Detroit News reports on one of the reason why we all lose when government decides that they know better ways to spend money than entrepreneurs. (H/T The Blog Prof)

Excerpt:

The government is handing out nearly $2 billion for new solar plants that President Barack Obama says will create thousands of jobs and increase the use of renewable energy sources.

Obama announced the initiative in his weekly radio and online address Saturday, saying the money is part of his plan to bring new industries to the U.S.

“We’re going to keep competing aggressively to make sure the jobs and industries of the future are taking root right here in America,” Obama said.

The two companies that will receive the money from the president’s $862 billion economic stimulus are Abengoa Solar, which will build one of the world’s largest solar plants in Arizona, creating 1,600 construction jobs; and Abound Solar Manufacturing, which is building plants in Colorado and Indiana. The Obama administration says those projects will create more than 2,000 construction jobs and 1,500 permanent jobs.

That’s $1,333,333 per new permanent job.

That money could have created many more jobs in the private sector. But now it’s been wasted for politically correct solar power. And that’s why government spending prolongs recessions – it takes money away from job creators for fashionable boondoggles designed to get people elected.

UPDATE: The ONLY stimulus that counts is A JOB – or several job offers. People on unemployment are not going to spend because the future is too uncertain. What makes people spend is a current job, along with the prospect of other jobs if this one falls through. That’s what caused people to spend. You need to give tax breaks to the suppliers – suppliers stimulate demand by creating products that people actually want to buy.

Polemics

John Lennox on the god-of-the-gaps and the progress of science

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The god-of-the-gaps fallacy is a charge made by naturalists against theists.

First, some introduction. Naturalists believe that every effect in the universe has a material cause. Theists believe that it is possible that God, who is not material, can cause effects in nature. Theists think that these effects are detectable because the creating/designing capabilities of material causes are insufficient to explain certain effects either deductively (creating out of nothing) or probabilistically because of the limits of time and space available for material processes to act within (biological information). The naturalist thinks that all effects in nature have physical causes, the theist things that some effects in nature are caused by non-material causes.

In the past, some effects in nature were thought to be caused by God but later were found to be the result of natural (material) processes, often through the scientific method. Because the trend has been to explain these “gaps” in our knowledge with material causes, the naturalist now assumes that every effect in nature will be found to have natural causes. Even discontinuities in nature that are real, like the Big Bang, the fine-tuning, the origin of biological information, etc. are now assumed to have material causes, even though the progress of science has made these effects MORE DIFFICULT to explain with natural causes. The naturalist calls any attempt to attribute an effect in nature to a Creator/Designer a “god-of-the-gaps” fallacy, because the naturalist points to the past and asserts that a natural material cause will eventually be found for whatever gaps we have in nature.

But suppose a material explanation of every effect in nature could be found. Does that mean that there is no role for God anywhere?

Glenn Peoples writes:

Let’s imagine that the following is true: God does not intervene in the world. Once upon a time people who were more ignorant than we are thought that gods, angels, demons, spooks or spiritual forces lurked behind everything that we didn’t have a handy natural explanation for. But in fact, this is all god of the gaps reasoning, and God doesn’t intervene in nature at all. Never. There is a true natural account for everything that goes on in the universe that we know of.

If you don’t think that’s true, relax. We’re imagining, OK? I don’t think that the above is true, since I’m one of those crazy people who thinks that at least some miracles have taken place. But let’s suppose that the above account were true. Here’s where things take a step off the cliff of logic. Take the above account, and then add the following statement: “Therefore, since God isn’t required to explain any phenomenon, we have no need of the God hypothesis at all, and we have as good as shown that he need not be thought to exist.” God, some have said, can now be treated as a redundant hypothesis that explains nothing at all. Nothing.

And then Glenn cites John Lennox:

Science has been spectacularly successful in probing the nature of the physical universe and elucidating the mechanisms by which the universe works. Scientific research has also led to the eradication of many horrific diseases, and raised hopes of eliminating many more. And scientific investigation has had another effect in a completely different direction: it has served to relieve a lot of people from superstitious fears. For instance, people need no longer think that an eclipse of the moon is caused by some frightful daemon, which they have to placate. For all of these and myriad other things we should be very grateful.

But in some quarters the very success of science has also led to the idea that, because we can understand the mechanisms of the universe without bringing in God, we can safely conclude that there was no God who designed and created the universe in the first place. However, such reasoning involves a common logical fallacy, which we can illustrate as follows.

Take a Ford motor car. It is conceivable that someone from a remote part of the world, who was seeing one for the first time and who knew nothing about modern engineering, might imagine that there is a god (Mr Ford) inside the engine, making it go. He might further imagine that when the engine ran sweetly it was because Mr Ford inside the engine liked him, and when it refused to go it was because Mr Ford did not like him. Of course, if he were subsequently to study engineering and take the engine to pieces, he would discover that there is no Mr Ford inside it. Neither would it take much intelligence for him to see that he did not need to introduce Mister Ford as an explanation for its working. His grasp of the impersonal principles of internal combustion would be altogether enough to explain how the engine works. So far, so good. But if he then decided that his understanding of the principles of how the engine works made it impossible to believe in the existence of Mr Ford who designed the engine in the first place, this would be patently false – in philosophical terminology he would be committing a category mistake. Had there never been a Mr Ford to design the mechanisms, none would exist for him to understand.

It is likewise a category mistake to suppose that our understanding of the impersonal principles according to which the universe works makes it either unnecessary or impossible to believe in the existence of a personal creator who designed, made, and upholds the universe. In other words, we should not confuse the mechanisms by which the universe works either with its cause or its upholder.

John C. Lennox, God’s Undertaker: Has Science Buried God? (Oxford: Lion, 2007), 43-44.

I’m with Glenn – I think that God is a real agent who exists in time subsequent to Creation just like you and I. He can cause effects in nature like you and I, the same way that you and I can – by using our immaterial minds to affect the natural world freely. But even if everything has a mechanistic explanation – which I don’t for a minute agree with – that still would not rule out an intelligence acting to bring the entire universe into being fine-tuned for complex life, with certain potentialities that would unfold over time.

Commentary

How economic uncertainty causes businesses to hire fewer workers

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Story from center-leftist Fareed Zakaria in the radically leftist Washington Post. (H/T Marathon Pundit)

Excerpt:

But government spending can only be a bridge to private-sector investment. The key to a sustainable recovery and robust economic growth is to get companies investing in America. So why are they reluctant, despite having mounds of cash? I put this question to a series of business leaders, all of whom were expansive on the topic yet did not want to be quoted by name, for fear of offending people in Washington.

Economic uncertainty was the primary cause of their caution. “We’ve just been through a tsunami and that produces caution,” one told me. But in addition to economics, they kept talking about politics, about the uncertainty surrounding regulations and taxes. Some have even begun to speak out publicly. Jeffrey Immelt, chief executive of General Electric, complained Friday that government was not in sync with entrepreneurs. The Business Roundtable, which had supported the Obama administration, has begun to complain about the myriad laws and regulations being cooked up in Washington.

One CEO told me, “Almost every agency we deal with has announced some expansion of its authority, which naturally makes me concerned about what’s in store for us for the future.” Another pointed out that between the health-care bill, financial reform and possibly cap-and-trade, his company had lawyers working day and night to figure out the implications of all these new regulations. Lobbyists have been delighted by all this activity. “[Obama] exaggerates our power, but he increases demand for our services,” superlobbyist Tony Podesta told the New York Times.

Most of the business leaders I spoke to had voted for Barack Obama. They still admire him. Those who had met him thought he was unusually smart. But all think he is, at his core, anti-business. When I asked for specifics, they pointed to the fact that Obama has no business executives in his Cabinet, that he rarely consults with CEOs (except for photo ops), that he has almost no private-sector experience, that he’s made clear he thinks government and nonprofit work are superior to the private sector. It all added up to a profound sense of distrust.

I think this was one of the points that really stood out to me in Amity Shlaes’ book “The Forgotten Man”, a badly-written book on the Great Depression. She spoke at length about how the unpredictable interventionism of statists like Herbert Hoover and Franklin Delano Roosevelt caused businesses to get so flustered that they just stopped all entrepreneurial activity, including hiring, in order to wait the big-government socialists out. It ended up delaying the economic recovery.

And that’s what we see with Obama and his interventions into the free market today. Every dollar spend by the government costs jobs. Every regulation passed to control businesses costs jobs. Every line of anti-capitalist rhetoric costs jobs. Every Obama is doing to oppose businesses costs jobs. At some point, he’s going to realize that the election is over and he needs to stop scaring businesses in order to win the votes. Now is the time for tax cuts on businesses.