Dispatches from the Creation Wars

Dumbass Email of the Day

I got an email from the incredibly appropriate address of BigAndDumb@aol.com. It began with, “I dunno the truth but consider the evidence.” It included a picture of Obama and a picture of Malcolm X. Then this:

There is plenty of evidence that it could be Malcolm.

My thoughts are DNA should be taken, prove it or squish it..

Stranger things have been proven true, and my mother, who had no reason to lie, told me this was the case when he was elected for Senator.

She told me how she knew, and it is certainly possible.

“My mama done told me!” Yes, I’m sure she did. Now go away, the adults are talking.

Comments

  1. #1 Dr X
    October 31, 2010

    What pols generally mean is that they are going to direct pork to certain sectors of the economy in an effort to get businesses to hire more people. This is certainly NOT job creation because every dollar the government directs to one industry is a dollar other businesses do not have access to. That isn’t job creation, it’s just transferring jobs from one sector of the economy to the other.

    I shared your view at one time, but no longer. I find the arguments to the contrary convincing.

    Have a look at Stan Collender’s comments comments on this line of reasoning after Brian Reidl made an argument similar to yours.

    The goal of economic stimulus is to create activity that wouldn’t otherwise occur at that time. Your statement would have been correct if the economy had been operating at close to full employment and capacity. But it wasn’t. Businesses weren’t spending, consumers weren’t spending, and monetary policy adjustments were not doing much to change that behavior.

    So the federal government used borrowed funds (Nice try, Brian, but there were no tax increases), that is, it got funds from those who were not spending the money and then spent it or gave it to others with a tax cut (about 40 percent of the stimulus was tax cuts) to create that activity. Unless there are no limits on productivity improvement, that has to result in more jobs than would have otherwise existed.

    And, Delong, also responding to Reidl, notes that this line of reasoning would imply that spending is constant, a argument easily refuted by readily available evidence:

    What Brian Riedl doesn’t seem to realize is that the only way he can get extra money to spend is by borrowing it or selling his assets. In either case, the person he borrowed it from or sold his assets to no longer has the money to spend–and so by Reidl’s “logic” any private-sector decision to spend more (or less!) money doesn’t create (or destroy!) demand: “it’s [just] a zero-sum transfer of existing demand.” According to Reidl’s logic, no private decision to spend more or less can ever change the flow of existing demand: spending in the economy must always be a constant.

    You have only to look at employment in America to understand that the claim that spending in the American economy is always a constant is simply and completely false.

    And Yglesias:

    So suppose this engineer Henry Ford wants to build a car factory, but he doesn’t have the money it costs to build a car factory, so he borrows the money from a coal dealer named Alexander Malcomson—is that a zero-sum transfer that doesn’t create jobs?

    The issue with government stimulus spending, I would say, isn’t that money doesn’t “fall from the sky.” The issue is that we’re not very confident that congressional appropriators can allocate real resources (people, electricity, buildings, steel, etc.) in the most efficient way and prefer to leave this allocative function up to the free market. But how reasonable a concern this is has to be a function of fully-employed the resources are. If unemployment is at 4 percent, then injecting spending into the economy probably is going to mostly involve just shifting things around.

    But if unemployment is at 10 percent, office vacancies are sky-high, retail stores are closing their doors, millions who would prefer full-time work are working part time, and capacity utilization is in the dirt then things look different. It’s hard for government planners to outsmart the market in terms of how resources should be employed, but it’s not that hard—having tons of people sitting around doing nothing is not an efficient outcome.

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