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Craig Pirrong has an unbelievable quote from the supposedly brilliant president. It would be funny, except that the president’s economic ignorance has cause so much damage for so many.
The annals of presidential idiocy on economics could fill libraries, but Barack Obama deserves pride of place for this gem:
‘ President Obama explained to NBC News that the reason companies aren’t hiring is not because of his policies, it’s because the economy is so automated. … “There are some structural issues with our economy where a lot of businesses have learned to become much more efficient with a lot fewer workers. You see it when you go to a bank and you use an ATM, you don’t go to a bank teller, or you go to the airport and you’re using a kiosk instead of checking in at the gate.” ‘
Read it. Savor it. Breathe deep the inanity.
Where to begin?…
Growing use of capital makes individuals more productive, which increases their standard of living…Yes, automating some functions eliminates some functions…But that frees up labor and human capital that can be used to do other things, and if labor markets are allowed to function, that’s just what will happen. People will flow to their highest value occupations. With greater technology and more capital, the same number of people can make more stuff, meaning there is more stuff per person. …
Obama, on the other hand, seems to believe that there is only a certain amount of stuff to be produced, and if each person becomes more productive, that means fewer people are required to produce it. That gets an F- in Econ 101. …
In the Daily Caller, Jim Treacher makes fun of the president’s comment. He starts with the title that Obama believes ATMs cause unemployment.
No, really, he does! That’s not a joke headline. He said it out loud in front of the whole world and everything. On yesterday’s Today Show, Obama told Ann Curry his brilliant theory about why the economy hasn’t been doing so well since he became president: “There are some structural issues with our economy where a lot of businesses have learned to become much more efficient with a lot fewer workers. You see it when you go to a bank and you use an ATM, you don’t go to a bank teller, or you go to the airport and you’re using a kiosk instead of checking in at the gate.” That’s right, the Smartest President Ever just said innovation is a job-killer. His next step, presumably, will be to demonize the Republicans for making such deep cuts to the Department of Buggy Whips. Hey, why is the President of the United States blaming machines for unemployment … on TELEVISION? Doesn’t he care about all those out-of-work town criers?
In the Corner, Peter Kirsanow explains Obama’s logic, starting with the problem with ATMs…
. . . is not so much that they destroy jobs, but that in at least 50 of 57 states you can’t conduct transactions in Austrian, making it difficult to withdraw enough cash to spread the wealth around to Midwesterners, who then become bitter and cling to guns and religion and antipathy toward people who aren’t like your doctor, who you can keep (if you like him) but you probably won’t because for extra cash he unnecessarily performs tonsillectomies and amputates the feet of people from Kansas, where a while back 10,000 were killed by a tornado that also air-raided villages and killed civilians in Afghanistan, from which we need to begin withdrawing troops by July so we can use the funds to save or create jobs for people who don’t use air pressure gauges to keep the tires on their cash-for-clunkers car properly inflated, requiring them to buy more gas than they otherwise would at $3.84 a gallon and thereby reducing their disposable income and causing them not to buy consumer products, resulting in slower GDP growth that can only be jumpstarted by another round of stimulus spending so the economy won’t go into a double-dip recession that would result in layoffs and a higher unemployment rate than we had even after the oil spill in the Gulf of Mexico that everyone knows was George Bush’s fault.
Economics is hard.
Newsbusters notes the media will take a pass on telling us how dumb he is.
…Curry moved on to another subject without addressing the faux pas, but she’s not the only journalist to gloss over the story. Despite the fact that the automated teller machine was invented decades before Obama took office, a Lexis search revealed that not a single major news network, including ABC, CBS, NBC, CNN, FNC, and MSNBC, has covered the remark on air.
…Contrary to the president’s assertion that ATMs contribute to nagging unemployment, the Bureau of Labor Statistics (BLS) predicted that teller jobs would grow about 6 percent from 2008 to 2016.
In addition, NRO’s Jonah Goldberg pointed to statistics indicating expansive growth in banking jobs since the self-service banking era began in 1985: “At the dawn of the self-service banking age in 1985, for example, the United States had 60,000 automated teller machines and 485,000 bank tellers. In 2002, the United States had 352,000 ATMs – and 527,000 bank tellers.” …
In Cato at Liberty, Daniel Mitchell explains that recessions are usually followed by periods of accelerated growth. Not this time.
…The key question, of course, is why growth has been anemic, resulting in (what seems to be) a permanent loss of output. In his presentation, Lucas warns that bad government policy is playing a big role. He says that “the problem is government is doing too much,” and he specifically highlights the “likelihood of much higher taxes, focused on ‘the rich’” and a “large increase in the role of government” in the healthcare sector.
In his conclusion, Professor Lucas is not overly optimistic about recovering lost output. He doesn’t make any flamboyant claims, but he does note that “European economies have larger government role and 20-30% lower income level than US.”
The obvious connection, as I’ve pointed out on many occasions, is that America is becoming a European-style welfare state and it is unavoidable that we will suffer from European-style economic malaise.
P.S. It should be noted that America’s anemic economic performance in recent years is not solely Obama’s fault. As the White House repeatedly points out, he inherited a downturn. That is completely accurate. My complaint, however, is that Obama promised hope and change but instead has exacerbated the big government policies of his predecessor.
The Investor’s Business Daily editors explain the ATM issue so simply, even a president could understand.
…ATMs and automatic check-ins were invented since the stimulus? They weren’t around when the country was enjoying 4.5% unemployment under George W. Bush? It’s a socialist fairy tale to blame automation for killing jobs; it’s always brought new jobs because it lets businesses expand faster.
In 1963, AFL-CIO president George Meany similarly called automation “a curse” and “a real threat” that “could bring us to national catastrophe.” But automation reduced the price of any and every type of manufactured good, and made more wealth available for new projects and new jobs. Has the U.S. economy of the last half-century been a “catastrophe”? …
Charles Krauthammer discusses how the president is siding with unions in economic issues, which hurts the economy, but enriches unions and Dems.
…One obvious way to increase exports is through free-trade agreements. But unions don’t like them. No surprise then that for two years Obama has been sitting on three free-trade agreements — with Colombia, Panama and South Korea — already negotiated by his predecessor.
Under the pressure of dire economic conditions and of the consequences of stiffing three valued allies, Obama appeared ready to relent — only to put up a last-minute roadblock. He’s demanding an expansion of Trade Adjustment Assistance — taxpayer money (beyond unemployment compensation) given to workers displaced by foreign competition, something denied to Americans rendered unemployed by domestic competition. It’s an idea of dubious fairness but nicely designed to hold up ratification, while placing blame on Republican heartlessness rather than on political sabotage by Democrats beholden to unions for the millions they pour into Democratic coffers. (A deal reportedly may be near. But the years of delay have been costly. Colombia, for example, is negotiating broad trade deals with China, including a possible Chinese-built railway to bypass the Panama Canal.)
Nothing new here. In 2009, Obama pushed through a federally run, questionably legal, bankruptcy for the auto companies that robbed first-in-line creditors in order to bail out the United Auto Workers. Elsewhere, Delta Air Lines workers have voted four times to reject unionization. A federal agency, naturally, is investigating…
John Fund looks at one of the Liberals many embarrassments: DNC Chair Debbie Wasserman Schultz.
…”We own the economy,” she said this week at a breakfast sponsored by Politico.com. “We own the beginning of the turnaround, and we want to make sure that we continue that pace of recovery.” The economy, she said, “has turned around” since President Obama took office, leaving many reporters who had asked her about rising unemployment numbers scratching their heads in puzzlement. “I’ve really seen such a velocity of spin with so little heft behind it,” one told me.
But that’s only the beginning. Last week she said that Republicans “want to literally drag us all the way back to Jim Crow laws and literally and very transparently block access to the polls to voters who are more likely to vote for Democratic candidates than Republican candidates. And it’s nothing short of that blatant.” Their crime? Republican governors have recently signed laws that require voters to show photo ID at the polls, a position backed by more than 80% of Americans in many published surveys.
The week before that statement, Ms. Wasserman Schultz announced that the GOP was engaged in “a war on women” and for good measure were backing a Medicare reform plan that would allow insurance companies to “throw you to the wolves” and “deny you coverage and drop you for pre-existing conditions.” This prompted FactCheck.org to declare her statements on Medicare “simply wrong.” …
Colin Carter and Henry Miller explain the insanity of ethanol payoffs, in Forbes.
Imagine if the U.S. Congress were to mandate subsidies for the dumping of 40% of the U.S. corn crop into the ocean every year. That would certainly boost prices, which would be a boon for corn farmers and a menace to everyone else. Such a program would lead to widespread inflation, more hunger and political instability in poor countries around the world, and slower global economic growth.
This scenario may sound far-fetched, but it captures the essence of current U.S. subsidies for corn-based ethanol — except that in some ways it would be less harmful than the current subsidy scheme.
The price of corn is pivotal in the world food equation, and food markets are on edge because U.S. corn stocks are plummeting. In fact, the U.S. Department of Agriculture recently forecast that corn inventories could dwindle to 5% of annual use before the 2011 harvest is brought in, the smallest fraction since the Great Depression.
The drawdown of corn inventories is due to huge U.S. government subsidies of corn-derived ethanol. These create an artificial market for corn and remove supply from the food market. Spurred by the corn shortage, the World Bank’s food price index is up about 30% in the past year, which has tipped millions of people in the developing world back into poverty and malnutrition.
…Roughly 40% of the U.S corn crop was diverted to the production of ethanol for gasoline in 2010, up from 20% in 2006. The sharp increase was due to government mandates on ethanol use, the so-called Renewable Fuels Standard. And just a few months ago, the government raised the allowable ethanol blend from 10% to 15%. Citizens are told, in effect, that they must burn this inferior, engine-damaging fuel in their cars, reducing their gas mileage at a time when gasoline prices hover around $4 per gallon. …
The WSJ editors report on what may finally be the beginning of the end of ethanol payoffs.
…The 73-27 vote on an amendment sponsored by California Democrat Dianne Feinstein—33 Republicans, 38 Democrats and both independents in favor—was the kind of supermajority that usually waves through new subsidies for the fuel made from blending corn and tax dollars. Ending the annual $6 billion subsidy, along with the tariff on foreign ethanol, marks the first time in memory that the ethanol lobby has lost a major vote, as the left-right coalition that wants to eliminate its subsidies and mandates continues to grow.
For now, this victory for energy and fiscal sanity is incomplete, because the underlying bill—a new engine for green subsidies—is unlikely to pass the Senate, let alone the House. Still, ethanol’s decades on the public dole appear to be numbered. The 27 “nays” were essentially the Farm Belt contingent, with the disappointing addition of Ohio Republican Rob Portman.
The House also voted yesterday, 283-128, to bar public spending on the special blender pumps and tanks necessary for higher concentrations of ethanol. This is significant because the ethanol lobby has been counting on the pump and tank subsidy to replace the tax credits and tariffs. The Senate defeated a similar amendment from John McCain yesterday, so House Members will need to be on the lookout for this to appear at 3 a.m. in some “must have” legislation. …
Ed Morrissey has another scandal involving former Representative Weiner.
…The New York Daily News did a little investigating after seeing expired tags on his Nissan Pathfinder, and discovered that not only has the car not been registered, but the plates on them belong to a different car (via JWF)…
…As abuses of power go, this one is decidedly tamer than the scandal surrounding Weiner the last couple of weeks. Still, as one investigator told the NYDN, swapping plates is something one would normally expect of a criminal, not a member of Congress. Or is that a redundancy?
This new peek into Weiner’s approach to responsibility may lend itself less to double entendres and hilarious jokes, but it may also be more revealing. Until now, Weiner earned $174,000 in annual salary as a Congressman. His wife earns almost the same amount working for Hillary Clinton, putting their combined household income at a figure exceeding $325,000 per year. Weiner has agitated for higher taxes and more government regulation, but has apparently evaded his responsibility to pay for fees owed the state of New York for the last four years — even switching plates to save himself a few hundred dollars. …
In the Spectator, UK, James Delingpole sings the praises of Pickerhead’s alma mater.
…Let me give you one example: a place called Hillsdale College, Michigan. It’s the only 100 per cent privately funded university in the whole of the US…
…these people look after Hillsdale, to the tune of perhaps $50 million a year. Why do they do it? Because besides being a first-class university, Hillsdale is also a last bastion in that battle to save civilisation. And if Hillsdale is Helm’s Deep, then the orcish hordes are the forces of progressivism represented by the state and federal government.
Every year, Hillsdale loses out on around $800,000 in local government funding and perhaps $10 million in national government funding as a result of its principled stance against arbitrary political authority. The resistance began in the 1970s when the Department of Health, Education and Welfare began sending in the men with clipboards to monitor whether Hillsdale was fulfilling the ‘correct’ admissions criteria with regard to race and gender. By the mid-1980s — and one lost Supreme Court case later — Hillsdale had had enough. It would risk financial ruin by going totally private.
Lest you leap to the conclusion that this is an exclusive Wasp white-flight ghetto protecting its own, consider Hillsdale’s history. Founded in 1844, it was the first college in America to have a charter declaring itself open to all students ‘irrespective of nation, color or sex’. In 1956, it lived up to these principles when its undefeated football team refused to play in the Tangerine Bowl after game officials said Hillsdale’s black players would not be allowed to join their white team mates on the field. Hillsdale has no problem with women or ethnic minorities. What it does very much have a problem with is the injustice of state-imposed reverse discrimination. …