The Blindness of Ideology

I just read an article lambasting Obama's policies from the Opinion pages of the Pittsburgh Tribune-Review. This is part of a media group owned by Richard Mellon Scaife who with $1.2 billion is a principal heir to the Mellon Banking and Industrial Estate. Mr Scaife is a major funder of conservative and libertarian causes.

Given Mr Scaife's background it is not surprising to read conservative editorials and given the fact that truth and objectivity are no longer journalistic prerequisites I take everything I read from his media empire with a huge grain of salt.

So I was not surprised to see an article published yesterday decrying Democratic red ink and more dependency on government checks. The writer, a certain Ralph R Reiland is an associate professor of economics at Robert Morris University, and a local restaurateur.

He decided to berate the extension of unemployment benefits and to focus on Massachusetts in general, and just happened to pick Nantucket as his specific target. I don't know if his figures are correct and I certainly have no idea out of what context they were snatched. I have to assume that the amount you draw is somehow related to the amount you earned so the national average is probably a good starting point.

In Mr Reiland's example he stated that the average national unemployment check is $309 a week, but in Massachusetts the top benefit is $943 per week. His focus is that if you get the top benefit in Massachusetts than you have no incentive to work. He does seem to ignore the fact that the average is $16,068 a year-he doesn't discuss the mean, doesn't address that this is an extension up to 99 weeks (it's not forever) and that the real problem is that there are not enough jobs.

I surmise that there is quite probably a concern on the part of the Administration that we could kick along at relatively high levels of unemployment for a while and what they are trying to buy is time. Mr Reiland has decided that the reason that the jobless rate has increased in 2009 is because Obama has created "an increasingly hostile environment for investment and job creation".

Of course he doesn't mention that unemployment was 4.7% when GW entered the White House and increased to 6.0% and then declined back to 4.6% in 2007 only to start to clime again leaping to 9.3% as Obama entered the White House. He also declines to mention that it peaked at 10.1% and is now back down to 9.5%.

This might be because it doesnt sit wel with the Republican mantra that "Investing and hiring new employees is too risky if business sees a plethora of higher taxes and more regulatory costs." I love it. The Bush Tax Cuts that are being reinstated are now being trumpeted as one of the largest tax increases in US history. That would make sense given that they were one of the largest tax CUTS in US history.

The Republicans are always accusing the Obama Administration of not understanding economics. Well I just wonder if the reason that investment and hiring are not taking place is because the captains of industry don't see an opportunity to make money. I am sure that where there are good opportunities there is investment and hiring taking place. It's just much easier to blame someone else for the lack of growth in the economy-especially at a time that corporate profits are going through the roof.