Another far right econ theory shot down

T

tommyjo

New Member
As we hurtled headlong towards the Great Recession, a group of economists, politicians and pundits began arguing for courses of action that had long been disproven. These people (Ron Paul et al), the groups (The Heritage Foundation et al) and the websites (Zerohedge et al) pushed political populism propaganda, not history and certainly not macro-economics. The end result was a political movement, the Tea Party, that is filled with morons who push ignorant and uneducated policy solutions.

These groups of the uneducated and politically motivated screamed that:

*"hyperinflation" was imminent due to the actions of the Federal Reserve. Wrong.

*that stimulus was wrong and would fail. Wrong.

*that the dollar would collapse. Wrong.

*that interest rates in the US would spike. Wrong.

*that the economy should just be left alone to fix itself. Horribly wrong.

*that govt spending must be reduced (despite the clear cut evidence from Europe showing this course of action was wrong was pushed thru Congress anyway). Horribly wrong.

*they screamed that automatic stabilizers like unemployment and extended unemployment served no purpose other than to incentivize workers to NOT look for jobs. Last year, these people succeeded in cutting off extended unemployment benefits despite the obvious on-going problems we have with long term unemployment. We now have enough data to show how horribly wrong that thinking was.


As the economic recovery continued, weak as it was for many in the working class, many lawmakers on the right began to believe that these extended benefits were a drag on employment—the theory being that government checks reduced the incentive for recipients to find a job, and that cutting off this lifeline would compel unemployed workers to look harder for work and perhaps take jobs they may not have accepted if the benefits had continued. Relying on this premise, Congress allowed the federally-funded Emergency Unemployment Compensation program to lapse last December.

Now, more than seven months later, data are available to test this idea. Coming from perspectives that diverge greatly along the ideological spectrum, scholars at both AEI and EPI have come to the conclusion that this “bootstraps” theory is incorrect—curtailing jobless benefits did not boost employment. Because unemployment benefits are contingent upon the people who receive them proving that they are looking for a job, receiving jobless benefits appears to make recipients at least just as likely, and certainly not less likely, to rejoin the ranks of the employed.

Relying on papers from the Boston Fed and the National Bureau of Economic Research, AEI’s James Pethokoukis writes that “the unemployed tended to remain so until their UI benefits were exhausted. But their next move wasn’t into a job,” but rather to give up looking for one. Pethokoukis adds that “it is important to keep people in the labor force looking for work,” and that, “jobless benefits were a key part of that safety net” that propped incomes for people at the middle and bottom of the income distribution during the recession and its aftermath.

Pethokoukis’s colleague at AEI, Michael Strain, agrees that federal jobless benefits should not have been allowed to expire. Writing at the National Review, Strain concludes that “federal unemployment benefits should [have been] extended beyond the standard twenty-six weeks,” and points to an older piece he wrote arguing that benefits should not be cut when long-term unemployment remains elevated, when job seekers so outnumber job openings, and when benefits have been shown to keep recipients on the job hunt.

Both Pethokoukis and Strain point to a New York Times article in which economist Justin Wolfers looked at data from North Carolina—which cut the duration and dollar amount of its state-based unemployment benefits last summer, thus opting out of the federal emergency benefit program before it expired for other states. In the article, Wolfers concludes that “the bottom line is that North Carolina looks quite similar to its peers, and certainly not better” in terms of labor market outcomes.

In a recent paper, I, along with my colleagues Josh Bivens and Valerie Wilson, come to the same conclusion. Indeed, we found that “there was no visible improvement in state labor market outcomes (specifically, the employment-to-population ratio of workers age 25 to 54) following cuts to UI durations.” And in looking at the state level, we found that “even the North Carolina cuts to state UI, which were so extreme that they triggered a cutback of federal UI extended benefits to the state, provided no evidence of spurring employment growth in the state.”
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http://www.epi.org/blog/epi-and-aei-agree-cutting-jobless-benefits-did-not-boost-employment/

One of the Federal Reserve Banks (St Louis or Atlanta) published similar findings in July.

It is amazing how much better our recovery from a financial crisis has been when put into historical context. Those with any modicum of intelligence are forced to wonder how much farther along might we be had it not been for the obstructionist policies of the ignorant and uneducated politicians that now slither around the halls of Congress.
 
Gilligan

Gilligan

#*! boat!
PREMO Member
I knew it! You were a professional cherry-picker throughout most of your life, weren't you?
 
Larry Gude

Larry Gude

Strung Out
Any conversation like that has to start with a predicate; what is the ideal?

It follows that if there is too much money and too little supply, inflation occurs as the dollars compete to buy stuff, inflating prices. In this recovery, broad inflation hasn't happened because the dollars aren't competing. In the macro, wages are flat or declining and large interests are sitting on enormous amounts of cash. Why? Uncertainty. The reasons are numerous, not least of which was the endless uncertainty of what health cost responsibilities would end up being. Inflation SHOULD have happened, and has very much happened in food, but, any prediction relies on assumptions and it was kinda hard to assume the administration would repeatedly punt the realities of the health care law, their own law, down the road and that large interests would just sit on money. That's not normal nor was anyone, especially the administration, presuming they would. That was not the picture of the 'ideal'.

Worse, all that money has given large interests enormous leverage to make profits out of their supply chains; there is no competition because there is no spending so, vendors are screwed. It's not 1929 any more and the global economy was incredibly dynamic to begin with, VERY able to ramp up production of new products and ideas, as well as pounding out profits of small concerns that had no one competing for their goods and services. So, again, what is the ideal?

If the 'stimulus' worked, let's just do it again and double it. Maybe triple it. Again, what is the 'ideal'? I don't see people leaving the shrinking private sector for awesome government jobs. I just see a shrinking private sector.

If these folks don't think the dollar is in a precarious position given what Russia and China are doing, I really have no comment.

If inflation occurred, naturally, more dollars would be needed causing, naturally, interest rates to climb. Supply meet demand. Inflation didn't occurred because, as above, not a lot of buying is going on. Absent the policies that motivated large concerns to sit on cash, inflation would be going on and quantitative easing would have been difficult to maintain. Just like the deferral of the reality of the costs of the health care law, quantitative easing was an unknown when those normal predictions were made. It was unthinkable 6 years ago that money would simply be printed in whatever levels deemed necessary and at virtually free rates. What we've been doing is not only NOT the ideal, it is virtually incomprehensible to basic free market economic theory based on competition. It would be like, in 1929, snapping fingers to make goods appear and disappear as they can now in an economy that it, as a practical matter, took years to ramp up and down. This is where Bernanke got it so wrong; he has been fighting the last war from the beginning. He had no faith in and put no trust in modern production capacities stunning responsiveness.

As far as unemployment benefits, again, basic supply and demand; if you're paid to not work, you won't. This is one area we may agree; the administration sees that the economy is not recovering, that little buying is going on, thus, no jobs and no one feels the pain faster than the working man, so, you gotta do something. We refuse to control immigration so, there is huge down ward wage pressure. Micro inflation, especially food, adds pressure to working people, stunning education costs producing degrees in basket-weaving exacerbate the problem and the vicious cycle of large customers crushing profits out of vendors exacerbates the exacerbated; increased productivity, little spending, zero motivation to spend, wage pressure, basic necessity pressure; the mess we have.

If you're too big to fail it's been a fabulous recovery. If you're in guns, oil and health, it's fabulous. If you're most everyone else, to put it mildly, it isn't...

...ideal.

Predicate and perspective.
 
Merlin99

Merlin99

Visualize whirled peas
PREMO Member
tommyjo said:
As we hurtled headlong towards the Great Recession, a group of economists, politicians and pundits began arguing for courses of action that had long been disproven. These people (Ron Paul et al), the groups (The Heritage Foundation et al) and the websites (Zerohedge et al) pushed political populism propaganda, not history and certainly not macro-economics. The end result was a political movement, the Tea Party, that is filled with morons who push ignorant and uneducated policy solutions.

These groups of the uneducated and politically motivated screamed that:

*"hyperinflation" was imminent due to the actions of the Federal Reserve. Wrong.

*that stimulus was wrong and would fail. Wrong.

*that the dollar would collapse. Wrong.

*that interest rates in the US would spike. Wrong.

*that the economy should just be left alone to fix itself. Horribly wrong.

*that govt spending must be reduced (despite the clear cut evidence from Europe showing this course of action was wrong was pushed thru Congress anyway). Horribly wrong.

*they screamed that automatic stabilizers like unemployment and extended unemployment served no purpose other than to incentivize workers to NOT look for jobs. Last year, these people succeeded in cutting off extended unemployment benefits despite the obvious on-going problems we have with long term unemployment. We now have enough data to show how horribly wrong that thinking was.




http://www.epi.org/blog/epi-and-aei-agree-cutting-jobless-benefits-did-not-boost-employment/

One of the Federal Reserve Banks (St Louis or Atlanta) published similar findings in July.

It is amazing how much better our recovery from a financial crisis has been when put into historical context. Those with any modicum of intelligence are forced to wonder how much farther along might we be had it not been for the obstructionist policies of the ignorant and uneducated politicians that now slither around the halls of Congress.
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Your a moron and have so many faults in your story that no ones going to have time to explain each and every one of them.
 
D

dontknowwhy

New Member
tommyjo said:
As we hurtled headlong towards the Great Recession, a group of economists, politicians and pundits began arguing for courses of action that had long been disproven. These people (Ron Paul et al), the groups (The Heritage Foundation et al) and the websites (Zerohedge et al) pushed political populism propaganda, not history and certainly not macro-economics. The end result was a political movement, the Tea Party, that is filled with morons who push ignorant and uneducated policy solutions.

These groups of the uneducated and politically motivated screamed that:

*"hyperinflation" was imminent due to the actions of the Federal Reserve. Wrong.

*that stimulus was wrong and would fail. Wrong.

*that the dollar would collapse. Wrong.

*that interest rates in the US would spike. Wrong.

*that the economy should just be left alone to fix itself. Horribly wrong.

*that govt spending must be reduced (despite the clear cut evidence from Europe showing this course of action was wrong was pushed thru Congress anyway). Horribly wrong.

*they screamed that automatic stabilizers like unemployment and extended unemployment served no purpose other than to incentivize workers to NOT look for jobs. Last year, these people succeeded in cutting off extended unemployment benefits despite the obvious on-going problems we have with long term unemployment. We now have enough data to show how horribly wrong that thinking was.




http://www.epi.org/blog/epi-and-aei-agree-cutting-jobless-benefits-did-not-boost-employment/

One of the Federal Reserve Banks (St Louis or Atlanta) published similar findings in July.

It is amazing how much better our recovery from a financial crisis has been when put into historical context. Those with any modicum of intelligence are forced to wonder how much farther along might we be had it not been for the obstructionist policies of the ignorant and uneducated politicians that now slither around the halls of Congress.
Click to expand...

Why do you keep coming on here, spewing crap you clearly have no clue about, slinging your insults which instantly discredits whatever your babbling about, & then run away, refusing to defend your stance?
It's as if you do this, knowing full well you will be educated properly on ANY subject.
Why can't you just say thank you for the free education you get here you unappreciative little cumwad!
 
GURPS

GURPS

INGSOC
PREMO Member
tommyjo said:
As we hurtled headlong towards the Great Recession, a group of economists, politicians and pundits began arguing for courses of action that had long been disproven. These people (Ron Paul et al), the groups (The Heritage Foundation et al) and the websites (Zerohedge et al) pushed political populism propaganda, not history and certainly not macro-economics. The end result was a political movement, the Tea Party, that is filled with morons who push ignorant and uneducated policy solutions.
Click to expand...



let me guess, you have a Paul Krugman Coffee Mug in your basement office

....Keynes might, MIGHT work [borrow more in a recession] but the progressives never want to slow down borrowing when the economy is up ... the left always wants to spend MORE and MORE ....
 
stgislander

stgislander

Well-Known Member
PREMO Member
Life must be good for TJ... overlooking Wall Street from his/her/its penthouse, noshing on Beluga caviar, and sipping a nice Chateau Lafite Rothschild.
 
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