Rush Rips AP's Misnamed Wiseman As 'Ignoramus' Over Perils of Letting Unemployment Benefits Expire
In no uncertain terms, Rush Limbaugh (link will become unavailable in seven days) ripped into an Associated Press report today on the alleged perils of allowing unemployment benefits to expire for what the Labor Department says is nearly 2 million unemployed:
I have not had one class in economics since high school in the 1960s -- not one -- and I understand more about this through my own self-education than these wizards at the AP. And I'm still convinced they just repeated it. They just printed a fax from Pelosi's office or whatever. ... After 23 years and we still get trash like this in our major, #1 wire service. I guarantee you whoever wrote this story is an absolute, abject ignoramus. I don't know about you, folks, but I don't like being surrounded by stupidity.
The chief ignoramus in question whose name Rush didn't have is the misnamed AP Economics Writer Paul Wiseman, with the ignorant assistance of Christopher Rugaber. Behold their ignorance:
Cut-off of jobless aid would lower economic growth
If Congress lets unemployment benefits expire this week for the long-term unemployed, they won't be the only ones to feel the pain. The overall economy would suffer, too.
Unemployment benefits help drive the economy because the jobless tend to spend every dollar they get, pumping cash into businesses. A cut-off of aid for millions of people unemployed for more than six months could squeeze a fragile economy, analysts say. Among the consequences they envision over the next year:
- Annual economic growth could fall by one half to nearly 1 percentage point.
- Up to 1 million more people could lose their jobs.
- Hundreds of thousands would fall into poverty.
"Look for homelessness to rise and food lines to get longer as we approach Christmas if the situation can't be resolved," says Diane Swonk, chief economist at Mesirow Financial.
... That (unemployment) money ripples through the economy, into supermarkets, gasoline stations, utilities, convenience stores. That allows those businesses to hire more people, who, in turn, spend more money.
The Congressional Budget Office says every $1 spent on unemployment benefits generates up to $1.90 in economic growth. The program is the most effective government policy for generating growth among 11 options the CBO has analyzed.
Well, if that's the case, everyone should get unemployed and start collecting benefits. Economic growth will be off the charts. Give me a break.
Seriously now (take notes, Paul and Chris), very few if any businesses will make decisions to "hire more people, who, in turn, spend more money" based on a temporary extension of unemployment benefits. They'll only decide to do so when it becomes clear that overall conditions have significantly improved or very shortly will improve, and if real improvement seems like it is or shortly will be long-lived. Until then, they'll either try to get by with the staff they have and if necessary bring in temporary help to get through the somewhat busier times.
Extending unemployment benefits may or may not have the "multiplier effect" cited, but its effect on hiring is minimal at best, and the supposedly disastrous consequences for the economy by not extending benefits simply aren't credible. In fact, you could argue that ending unemployment benefits will motivate some (emphasis some) some who have been sitting on the sidelines to find work at some of the unfilled jobs that are out there (yes, there are some, even in this economy), thereby adding to GDP and possibly creating genuine economic growth.
The report Rush cited really represents what AP has come to stand for: Absolutely Pathetic.
Cross-posted at BizzyBlog.com.
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Comments
AP
Submitted by Cool Arrow on Tue, 11/30/2010 - 7:55pm.
Yep, let's forget that many of these people are now torn between gainful employment and Government dole.
Given my present state, no debt and house paid off, I could play golf every day if I wanted to. I believe there are lots of people just like me.
No, I hate golf. Actually I
Submitted by Dan The Man 2 on Wed, 12/01/2010 - 12:28am.
No, I hate golf. Actually I am semi-retired. What gets me is all these unemployed people would be looking for or creating jobs if they did not have any other income. My son who is 18 is creating his own income on the internet. I am working for him and he is tutoring me. We have lost our way and the government is not helping us.
I am also crazy when the government says unemployment makes 190 percent off of every dollar spent. I know the CBO only has the information given to it by the Obama toadies. The idea anyone buys into this nonsense flabergasts me.
Look for food lines to get longer
Submitted by Vonu on Tue, 11/30/2010 - 7:56pm.
?
This is actually funny in a
Submitted by Barack_must_go..... on Tue, 11/30/2010 - 7:58pm.
This is actually funny in a sad sort of way. It's like saying ' pull your teeth out, leave them under your pillow to do your part to save the economy.
Barack_Must_Go.....
Way too much sacrifice
Submitted by Rackie on Wed, 12/01/2010 - 1:12pm.
rather, pull your neighbor's teeth and put them under your pillow.
I was an 'Economics' major in college. When it comes to...
Submitted by jawebster1 on Tue, 11/30/2010 - 8:34pm.
'economics', I agree 100 percent with Rush and zero percent with the 'Nobel' prize winning economist, Paul Krugman. If an utter fool like Krugman can win a Nobel prize, that tells me more about the people who award the Nobel Prize than it tells me about Krugman.
You have a great point, and
Submitted by Van Halen on Tue, 11/30/2010 - 8:42pm.
You have a great point, and don't forget - Krugman's job before rising to brilliance on the Left was:
Served on board of Advisory Panel to Enron.
That should tell you all you need to know about Mr. Krugman.
Taking this line of - er -
Submitted by Chris Norman on Tue, 11/30/2010 - 9:31pm.
Taking this line of - er - thinking - further, the federal government should just arm the military with debit cards and drop them in by parachute to the malls.
They did that, remember?
Submitted by CO2Maker on Tue, 11/30/2010 - 9:41pm.
It was called Katrina.
Like all failed government
Submitted by Chris Norman on Tue, 11/30/2010 - 10:07pm.
Like all failed government programs,the Katrina test wasn't successful because they didn't load those cards with enough money. This time, they need to increase the starting balances on the cards dramatically and that should do the trick. It's a use of the military that every liberal would support. Instead of rifles, they carry Macy's gift cards as they storm the malls.
Are they really so dumb to
Submitted by goldbough on Tue, 11/30/2010 - 10:46pm.
Are they really so dumb to not realize that if you have a job, you make more money than unemployment benefits? According to their thinking, they should immediately get fired and collect unemployment to help the economy. We all do that and there won't be unemployment tax flowing into the govt to hand out!
The money circle
Submitted by UltraC on Tue, 11/30/2010 - 11:56pm.
Unemployment benefits help drive the economy because the jobless tend to spend every dollar they get, pumping cash into businesses.Cash which is collected from those businesses in the form of taxes. No wealth creation, just moving money around in a big circle.
they both fail
Submitted by Bull Moose Prog... on Wed, 12/01/2010 - 12:18am.
Rush fails to understand unemployment and the AP fails to understand the economy.
First of all, the economist's numbers are clearly made-up.
Second for Rush you can't quit your job and get unemployment. Unemployment is a form of insurance and your payroll taxes go to support it. The amount you get is a reduced percentage of your salary as a non-temporary employee. Those who have not been employed for a long enough period of time, working at a non-profit (they're exempt from payrol unemployment insurance), or in a temporary position are not eligible for unemployment,
Unemployment is NOT a form of welfare, you have to earn it.
Second against the economists, unemployment is not productive on the economy. If I take a dollar from you and then turn around and give it to you, then you still have not "made" a dollar. As someone who took a single economics class in college I realize you always have to factor in the "opportunity cost". Which neither sides in this argument are doing.
The next fallacy is that ending unemployment will lower the unemployment rate and that people are somehow "sidelines". Even the best estimates show that there is at least an average of 5 people competing for every open position. Meaning that 80% of those actively applying still can't get anything. The bottleneck in this equation is not a lack of workers, it is a lack of jobs. Even if we really want to cure unemployment we need to get beyond talk of the bush tax cuts, unemployment and any of the current talking points. We need to discuss structural change (i.e. Fair Tax discussions, promoting entrepreneurs and new business startups) to the nations economy to get more jobs in the U.S. and make our economy more productive.
Also, frankly supporting the end of unemployment benefits, supporting more foreclosures and bank bailouts is the way to Republicans losing in 2012.
There are plenty of jobs out
Submitted by Dan The Man 2 on Wed, 12/01/2010 - 12:43am.
There are plenty of jobs out there, both from employers and jobs one creates. People need to be hungry enough to get a job, even one they don't want to work at. Funny enough in this economy my kids are able to get and keep jobs or make jobs. My youngest daughter goes to college and she found a job easy enough paying 8 bucks an hour. She even got promoted to a supervisor.
She worked this last summer at a summer camp and she related that some of the counselors were just marking time there and did not pay attention to the kids at the camp and work with them. She did while some of the others were on their phones or talking amongst themselves. She got promoted there and a raise while the others did not.
The moral of the story is ya gotta show you are worth hiring and keep. And sometimes ya gotta travel to other places to work. My dad lost his job as a structural engineer and then had to go overseas to Saudi Arabia for a couple years work and then to Johnston Island for a stint. He was traveling and out of country for over 12 years until he landed a job in Vegas.
My dad was willing to do what it took to get and keep a job. Tough nuggies if otehrs wont do what is needed. I also had to move to find work in 1981.
Please don't be quite so glib
Submitted by Chris Norman on Wed, 12/01/2010 - 1:11am.
Please don't be quite so glib on just how easy it is for older people to get a job in today's economy - even for jobs that are well below the level of the older person's qualifications. Their qualifications work against them for lower paying service jobs. Many companies prefer hiring inexperienced young people to older people who they assume may be there temporarily while trying to find a job commisersate with their experience. While arguing against the lberals preference for unlimited unemployment benefits, you argumant sounds good, it's just not as easy or pat as you describe.
Where did I say it was easy?
Submitted by Dan The Man 2 on Wed, 12/01/2010 - 3:03am.
Where did I say it was easy? I said sometimes ya gotta do what ya gotta do to get a job. My dad was out of work for 3 months before he got the job overseas. And he had to take the overseas one because he was older and the companies were not hiring during the Carter years.
I was canned in 1981 from a 25K a year job designing refineries. It took me from October to March to get me a job making 8 bucks an hour and I was happy to do it. I was making 160 a week tax free unenployment and took a 320 buck a week job where I actually had to work and they took out taxes and I drove 25 miles one way. I knew my benefits would run out and needed a job.
All said the job was 9K less than what I had been making. I know a bit about trying to find work so screw off. Been there done that.
Basically I still stand by you can find a job, just depends on what you are willing to do.
ditto chris where are the good jobs?
Submitted by lbcdawn on Wed, 12/01/2010 - 3:04am.
Unemplyment is spposed to be a bridge to walk across not a gridlocked freeway at rush hour...
I went back into the work force 4 years ago when my husband took a huge cut. It didn't take long to find part time intermittent work. In fact I found 2 jobs and thought this is it no more worries... then the diving economy got worse.. over the past 4 years I have kept those 2 jobs and have juggled other temporary positions. My salary has been all over the place. I took a 75% reduction in the last year while working 3 jobs! its been insanity. But for Gods grace we would be living in boxes. I would love to live in AP-ville where every $1 I earned could magically become $1.90 and be used for stuff -not bills. But I live in the real world. SO I keep applying and throwing resumes and networking and praying. I have never applied for unemployment but it has been tempting.
I don't want to go on unemplyment I want my husband to have a better job and my employers to pay me for working instead of demanding I put in hours for free. Best way to stimulate the economy is to cut the red tape. Lower corporate taxes reward new business by waiving taxes for 2-5 years, and lowering ridiculous environmental standards that prevent building.
Whoa, Missy!
Submitted by Blonde on Wed, 12/01/2010 - 3:13am.
Long time no see.....I'm thrilled to find you back here.
Don't be a stranger...and keep on truckin'.
I have been unemployed for 2 years....I've had lots of great interviews, but when potential employers see my former salary, they go into shellshock....no matter how badly they want me, they won't even consider alternatives...which sucks for me, and them.
But I've had a lovely time this year, check my blog out (in my profile).
Come back soon, okay?
Handy Reference Guide to Obama's Gaffes and Goofs ~ Currently Numbering 200 (and Counting)
BLONDE!
Submitted by lbcdawn on Wed, 12/01/2010 - 3:20am.
shellshocked is better then shallacking.. <wink> I'll check out your blog. Last time I spoke to you you were leaving the country for 6 months weren;'t you? welcome back.
Sorry, you are wrong
Submitted by Blonde on Wed, 12/01/2010 - 1:12am.
Non-profit organizations are not exempt from paying unemployment premiums, nor FICA/Medicare, nor Worker's Comp insurance premiums. A not-for-profit organization is exactly like a for-profit corporation in regard to paying for these government mandated "insurance premiums" and taxes.
As for governmental entities...I can't say...but I know for a fact you are incorrect in your assertion that NPO's don't pay unemployment insurance premiums.
The amount of unemployment one can collect is based upon one's salary, and is capped at a certain (subsistance) level in each state.
The government is artificially propping up (1) the employment numbers, by bailing out the state and local municipal governmental payrolls, and (2) prolonging this recession by artificially propping up state mandated unemployment rules.
At the margin, there are many unemployed workers for whom unemployment benefits are roughly equal to their post-tax earnings, providing a disincentive to find gainful employment. If these workers lost their benefits, they'd have to find gainful employment. However, each time the federal government bails out the state's unemployment funds....it disincents those on the bubble from seeking employment.
Without the massive governmental interference in the markets, and these obscene bailouts, the economy would have been approaching equilibrium, instead of being unsteadily tossed to and fro by inept governmental intervention....in the employment markets, the capital markets....hell, everywhere.
Governmental intervention has created lopsided sectors in the economy, thereby delaying and upsetting any semblance of reaching equilibrium in the markets.
It's pure hubris on the part of politicians to believe they can control a free (or not so free, via regulation) market by jaw boning and artificial stimuli.
In other words, que'lle crap.
Handy Reference Guide to Obama's Gaffes and Goofs ~ Currently Numbering 200 (and Counting)
I have a bunch of college
Submitted by Bull Moose Prog... on Wed, 12/01/2010 - 12:39pm.
I have a bunch of college friends who went to work for a local non-profit and were wage earners there for over 5 years when they were let go early in this recession. They thought they'd be fine because they get unemployment like all the rest of us getting it at the time (I was laid off in 2007, got severance and unemployment, and was rehired a few months later).
Whether or not the agency paid the taxes, they were not eligible to collect based on the non-profit status of their former employer. This is in Washington state and out of respect for the agency I'll not name them as it was the government's decision that they were not eligible rather than the agency's.
But sense you accuse of lying, I"ll accuse you of being unable to GOOGLE IT.
Also, some people fail at math. There are on average 5 applicants for every job (not to mention the hordes of unemployed who aren't actively applying that much). Not it isn't a literal 5, it is a ratio. So in your town it might be 500 unemployed versus 100 jobs. If they don't get that first round of jobs there is a very, very good chance they can't get any of the others for no fault of their own. Whether it is a lack of experience, being too old, being "overqualified" or any of the other myriad of factors that one can be rejected for. I'm glad some of you are employeed, but to pretend there are enough jobs for all the job seekers means you're either ignorant of the current economic condition or fail at elementary school math.
I myself can't find employment it what I was doing when I was laid off. It is a very specialist field with very few openings and I'm not competititive enough. Luckily for me I could fall back on other job skills which I have many years of experience doing and I'm overqualified enough that I've been snatched up for many temporary positions. A permanent position with benefits to provide for my family (and all my kids are on the state's insurance automatically as a result) has been elusive despite my best efforts. There just aren't that many permanent positions out there.
Oh, by the way the feds and Obama have NO interest in propping up the unemployment numbers, it is bad publicity for them and they've been doing every trick of mathematics to cut people from the rolls. Our true unemployment from those who've fallen off the rolls but are still seeking (efven if not "actively" as defined by the feds) would put this nations unemployment up to about 20% depending on the sources of your numbers.
Also, unemployment in no way "prolongs" the recession. A good limited unemployment program typcially helps shorten it because prospective employees can focus on finding work instead of chairty which people depend on when they can't provide for themselves.
ty
Submitted by amyshulk on Wed, 12/01/2010 - 5:33pm.
You said it!!!
Ronald Reagan
I've got no sympathy for
Submitted by Bruzilla on Wed, 12/01/2010 - 9:00am.
I've got no sympathy for these people either. I've been laid off four times since 2004, and was out of work for eight months back in 2007. There were always more than five people applying for any job I applied for, but somebody is going to get hired, and eventually it was my turn and the other four+ appliers lost out and got some other job. You make it sound like there's just one job, and if you're one of the four who lose out, you're finished. That's nonsense!
I have two family members who have been on longterm unemployment, and I know they are spending zero time looking for a job. The only time they start looking is when they think their benefits are going to end, then when the extension gets approved, the job hunting comes to an end.
It's taken me six years to get back to the income level I had in 2004, but I made it back, and didn't need government handouts to do it.
"...as we approach Christmas..."
Submitted by ljacone on Wed, 12/01/2010 - 8:54am.
Not only is the economic theory backwards and silly, notice also the specific mentioning of Christmas in their "bad news" context. If it's doom and gloom, it must be Christmas.
Christmas is being used to
Submitted by Bruzilla on Wed, 12/01/2010 - 9:17am.
Christmas is being used to stregthen their argument by tugging at the old heart strings and to make Republicans out to be Scrooges.
Excellent ...
Submitted by Tom Blumer on Wed, 12/01/2010 - 11:55am.
... catch.
Unemployment is earned?
Submitted by KC Beach on Wed, 12/01/2010 - 8:55am.
Please explain to me how an employee has "earned" unemployment benefits. As an employer, the state of Kansas taxes my business per employee based on the number of former employees that have filed for unemployment. I have worked for the company for 20 years and have been owner for the past five. In that time we have never had anyone file for unemployment as we have not had to let anyone go. You would think that this would drop our unemployment insurance payment to nothing, or close to it. However, since the unemployment funds in the state have dried up my business unemployment insurance has gone up.
Please, Bull Moose, explain to me how the unemployed people have earned their benefits from my company when they have never worked for me. Instead of being able to pay my people more or even hire more, I get to send the money we did actually earn to Topeka so the funds can be sent to those not working.
If individuals contribute their own funds to an "unemployment insurance account" similar to a 401K, then they would have earned the benefits. As it is now, these benifits are not earned by the employee, they are dictated by the government.
In a way, Bull Moose is
Submitted by Bruzilla on Wed, 12/01/2010 - 9:05am.
In a way, Bull Moose is correct. Unemployment benefits are not an entitlement program as no one is automatically entitled to getting them. You do have to work for a required period of time. Yes, companies do pay the taxes used to pay for most of the benefits, but that is a cost of doing business, just like paying for the electricity to run the machines, paying salaries/benefits, or paying other taxes. If your company pays for a portion or all of an employee's health insurance, it's paid for in return for their services. Same deal with unemployment insurance, with the only difference being you have to pay unemployment taxes.
Still disagree
Submitted by KC Beach on Wed, 12/01/2010 - 7:10pm.
Bruzilla, all of the employee and business expenses you mentioned, I pay because it is a cost of me conducting my business. My unemployment insurance expenses continue to go up yet I have not had an employee file for benefits in 20 years. Therefore, I fail to see how those collecting unemployment benefits have earned my money.
I agree the unemployment insurance I pay to the state is a cost of doing business, but that has no bearing on weather an arbitrary (in length and amount) payment from the state to an individual for not working is actually earned. It seems to me to be like the Earned Income Tax Credit. That is where the government takes taxes you pay and credit them to someone else. They can call it "Earned", but that doesn't make it so.
Well, Democrats Lie. Economics is not their strong suit.
Submitted by acaiguana on Wed, 12/01/2010 - 9:13am.
Gee, do ya think?
Krugman actually didn't win a 'Nobel' Prize. He won another Prize which is sponsored by the Nobel Committee; but is not actually part of the real Nobel Prizes which come from the original Nobel gift for such.
But since everyone blurs the distinction between Tax Cut and Tax Hike; Unemployment 'Insurance' and Employer Tax; and finally, GOP resistance to a wildly Radical Socialist Agenda and Free Men and Free Markets - what would one expect when some twit at AP conflates an imaginary multiplier effect from a transfer payment with a created multiplier effect from producing some product or service for consumption.
Oh well...
Some days I just want to lie on the beach.
ACA
...
Quoted from: 'Acaiguana notes from the Underground' (Soon to be at theaters near you)
These clowns should fired.
Submitted by maxvolt on Wed, 12/01/2010 - 11:22am.
Interestingly,
These so-called "economists" never draw the distinction that the "UNEMPLOYMENT WAGES" these people spend are not their own HARD EARNED MONIES. Its our taxes we are giving to the government to run the government NOT hand outs so that the unemployed can go get cell phones, cars, and HDTV. Nor is it for them to go to Vegas and get poker chips as they have been allowed to do, courtesy of Harry Ried's sick manifesto of redistribution. This money is ultimately HUNG on OUR KIDS and now even THEIR KIDS NECKS. What a disgrace of humanity this is, that there are those like these two idiots who even think this is in any way...ethical...this is a crime...and ultimately we should seek justice from these theirving civil servants...thats right they are civil servants, elected to SERVE us, NOT rule over us...wake up! This is how you destroy a nation, not build it up, and this therefore is TREASON...Our enemies have been trying to tdo this to us for years, but only now have we become so stupid that we give an ounce of credence to idiocy such as these two twerps perpetuate. Its astounding how stupid as a nation we have become. We are the generation that is urinating on the founders graves and we shrug our shoulders and say...but what can we do? Really? Imagine if our founders said that? No, they were real men of wisdom, they laid down their lives for what has become an ungrateful and moronic people, too stupid to help themselves...THIS IS YOUR COUNTRY not the politicians country! But I digress.
How dare these two ignoramuses profess to know anything about economics. I would NEVER even consider backrupting my family so that one of my kids could live a life of luxury as the rest of the family worked and slaved everyday to earn what we have. Where would be that one kids incentive to go out and get a job, if everything was just handed to him? Simple there would NOT be ANY incentive PERIOD.
Also these DUNCES dont even realize that taxpayer money comes OUT of out disposable income of the remaining 90% of the populace, meaning everybody who is paying taxes has LESS to "drive" the economy, simply because we have to support the 10% (and climbing )population who have NO JOBS due to idiotic policies of the ruling class liberal elites. So 90% WILL have LESS money and these morons think that 10% will drive the economy????....stupid is as stupid does...what a pathetic disgrace these clowns are.