Browsing the blog archivesfor the day Monday, July 5th, 2010.


Heartless, Clueless, Confused, and Calculating

Obama Administration

The Senate went on recess without extending unemployment benefits, and now Republicans are arguing that this is Democrats’ fault.

How so? GOP senators say they would have voted for the unemployment extension if the money were taken out of the budget, in particular from “unused” stimulus funds, to avoid running up more debt. Odd how deficits don’t matter when there’s a Republican in the White House, but that’s the argument.

Sen. Debbie Stabenow, Democrat of Michigan, explained (emphasis added),

Republicans want to pay for it [unemployment extension] from taking money away from the recovery dollars. Those are dollars being used to create jobs in construction and manufacturing incentives and alternative energy. To take money from job creation to fund unemployment benefits makes no sense.

Essentially, what the GOP favors is a kind of economic cannibalism. Think of the economy as a starving person, and the Republicans are saying they’ll feed this person, but only with some of his own cooked body parts.

Republicans keep talking about “unused” stimulus funds, as if there’s a pile of money somewhere that no one knows what to do with. But my understanding is that it’s all allocated already, even if not all of the projects to which the money is allocated have gone into effect. From an editorial in the Boston Globe:

Senator Brown has said he would vote for extended unemployment assistance if money for it came from unused stimulus funds. But yesterday’s jobs report proved that the economy needs both aid for the unemployed and the ongoing boost that stimulus projects provide as they come on line. Just this week, Massachusetts received $45.4 million in stimulus money to expand broadband access in the western part of the state where some towns have virtually no high-speed Internet service. Overall, the 2009 stimulus package includes $7.2 billion to upgrade the nation’s data networks — and, at the same time, create 5,000 construction jobs.

Clearly, not all stimulus projects were shovel-ready when Congress passed the bill last year, but that is just as well, since the economy still needs the turbo-injection of an initiative like broadband expansion.

And, of course, unemployment benefits also stimulate the economy.

In his column today, Paul Krugman asks how the Senate could possibly have turned its back on the unemployed. “The answer is that we’re facing a coalition of the heartless, the clueless and the confused,” he writes.

The “heartless” are Republicans who blocked the extension as a political ploy. They somehow think blocking the benefit extension will give them an advantage in the midterm elections.

The “”clueless” are people like Sharron Angle, the Republican candidate for senator from Nevada, who says people would get off their lazy butts and get jobs once their benefits are cut off. Given that Nevada has, I believe, the highest unemployment rate of all the states, I hope Nevada voters think hard about where this woman’s head might be.

The “confused” are those who think the deficit is more dangerous to the economy than the lack of money in circulation. Krugman writes,

Helping the unemployed, by putting money in the pockets of people who badly need it, helps support consumer spending. That’s why the Congressional Budget Office rates aid to the unemployed as a highly cost-effective form of economic stimulus. And unlike, say, large infrastructure projects, aid to the unemployed creates jobs quickly — while allowing that aid to lapse, which is what is happening right now, is a recipe for even weaker job growth, not in the distant future but over the next few months.

But won’t extending unemployment benefits worsen the budget deficit? Yes, slightly — but as I and others have been arguing at length, penny-pinching in the midst of a severely depressed economy is no way to deal with our long-run budget problems. And penny-pinching at the expense of the unemployed is cruel as well as misguided.

But, Krugman adds,

So, is there any chance that these arguments will get through? Not, I fear, to Republicans: “It is difficult to get a man to understand something,” said Upton Sinclair, “when his salary” — or, in this case, his hope of retaking Congress — “depends upon his not understanding it.”

Exactly, and I’d say many Republican lawmakers are not so much confused as calculating. They want the economy to be as bad as it can get in November. They want to keep the value of labor low; that’s been one of their goals for generations now. An opportunity to strangle the economy and drive workers into greater and greater desperation must seem too good to pass up.

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