Streetwise Professor

August 19, 2011

Doubling Down on Stupid

Filed under: Economics,Politics — The Professor @ 11:16 am

Whoops!  He said it again.

Several weeks ago Obama blamed high unemployment on ATMs and the like.  He was widely ridiculed for those remarks, and rightly so.  But apparently he believes it, because he said virtually the same thing yesterday:

One of the challenges in terms of rebuilding our economy is – businesses have gotten so efficient, that, uh, when was the last time somebody went to a bank teller? Instead of using an ATM. Or, used a travel agent instead of going online. A lot of jobs out that that used to require people now have become automated.

And the world is supposed to wait with bated breath for his jobs proposal?  What will it be?  To ban the internet?

This reminds me of the famous Milton Friedman story:

There’s a story about Milton Friedman in China that may be apocryphal but illustrates this point. In observing hundreds of Chinese workers clearing land for a new building using shovels, Friedman asked his hosts “Why are they using shovels? Why not use heavy equipment like an earth-mover?” The Chinese official said “If we did that, we’d lose all of those jobs!” Supposedly Friedman said “Oh, you’re trying to create jobs! I thought you were trying to build a building. If you want to create jobs, why not take away their shovels and give them spoons?”

So maybe the jobs program won’t be based on shoveling money to shovel ready projects, but to spoon ready ones.

I have little patience with those who label Obama as a Marxist.  However, his economic conceptions do seem to be little more than warmed over crypto-Marxist drivel; he looks at the nation’s poor employment picture and sees a modern day version of Marx’s description of the plight of the handweavers.  This is not evidence of hardcore Marxism, just the kind of thing one picks up in the intellectually miasmatic swamps of progressivism that Obama has inhabited the last 30 odd years.  Abject ignorance of real economics is the default condition in those swamps, as we find out whenever Obama chooses to bless us with an exegesis on the subject.

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    Despite the big cloud of smug emanating from the Fedsury regarding the fact that Kudrin and the Kremlins are still buying U.S. Treasuries, there’s this little nugget buried in the Bloomberg story today, which at least gets the Putin quote accurate rather than cutting it to make us hate Vladimir Vladimirovich:

    Russia’s holdings of monetary gold rose to a record $43.6 billion as of Aug. 1, from $35.6 billion on Jan. 1 and $27.3 billion a year ago. The country wants to diversify its reserves, Alexei Ulyukayev, a central bank first deputy chairman, said this week in an interview posted on Bank Rossii’s website.

    I suspect the Kremlins approved Hugo Chavez’ demand that those banksters at JP Morgan deliver el real oro pronto this week instead of pretending it’s all still there in the bowels of some London bank building.

    At least they’re not buying Fann…oops, that one went down the memory hole. Too embarassing to both sides, though it provided a useful CYA excuse for Hank Paulson — the evil Kremlins made me nationalize Fannie and Freddie!

    Comment by Mr. X — August 19, 2011 @ 8:04 pm

  2. He’s also forgetting why the internet took over from travel agents: because people did not like having to take time off from work or their weekend and make a special trip to an office to pay somebody to check airline schedules. People would rather do some things for themselves.

    Comment by Tim Newman — August 20, 2011 @ 7:52 am

  3. When asked to articulate why I believe Obama is illsuited to manage our economy, I usually start by voicing my objections to the belief that government should an instrument to confiscate wealth from citizens and redistribute it to those seen by politicians to be more deserving, that government should use levers of power to identify enemies of the state to be punished and friends of the state to be rewarded and that government’s contribution to the economy is the creation of jobs. Government is a service industry that consumeand destroyss wealth. Government doesn’t create wealth. While Obama, Rahm Emanuel, Charlie Rangel, etc,etc,etc have all become incredibly wealthy by using the levers or power, they seem oblivious to fact that their millions have come at the expense of those who actually do create wealth and actually do create productive jobs.

    Comment by Charles — August 20, 2011 @ 2:34 pm

  4. Obama is right, though.

    The Internet and automatization HAVE eliminated a lot of low-skilled jobs. That is because the US has a minimum wage, so part of the US population – the lowest-skilled tiers – have become simply unemployable. The productivity advantage gained, however, is a good thing, and Obama does not say otherwise.

    There are ways to solve this. One is to go libertarian and relax or remove labor laws. Another is to invest more in education. Both have their costs and potential pitfalls.

    Comment by Sublime Oblivion — August 20, 2011 @ 9:40 pm

  5. I characterize Obama as a Narcisso Euro Socialist. He may have claimed to be a Marxist during his Occidental days but has over time evolved a more convenient world view.

    I just finished David Mamet’s book-The Secret Knowledge On the Dismantling of American Culture. Nothing earth shattering but a decent quick read. I intend to give it to a colleague whose wife is a stereotypical liberal.

    Comment by pahoben — August 21, 2011 @ 7:33 pm

  6. […] He isn’t that smart. […]

    Pingback by Monday Mamas and Papas Breakfast Links | Points and Figures — August 22, 2011 @ 2:05 am

  7. The Internet and automatization HAVE eliminated a lot of low-skilled jobs. That is because the US has a minimum wage, so part of the US population – the lowest-skilled tiers – have become simply unemployable.

    Credit where it’s due, you’re absolutely right about that. In the UK, the first major recession since the introduction of the minimum wage has seen unemployment amongst the young and unskilled soar. The minimum wage makes some people unemployable.

    Comment by Tim Newman — August 22, 2011 @ 12:48 pm

  8. I fear that throwing the dice and overthrowing all the secular regimes in the Middle East could be the biggest mistake of all. I couldn’t be a bigger supporter of Israel against their neighbors and fear what is coming. The worst theocracies are left intact and secular regimes overthrown. Looks like a recipe for disaster.

    Comment by pahoben — August 22, 2011 @ 7:14 pm

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