One of the top stories on Fox Nation this afternoon features this headline: “Amazing White House Discovery: Unemployment Creates Jobs.”
Readers are told, “President Obama has lately been pushing a number of policies that he says will create jobs, including extending unemployment benefits. This is puzzling, since new benefits obviously will not create jobs for unemployed people, who after all are the ones who need work.”
It’s troubling how often the right considers this “puzzling.” I know the right has been struggling with the argument for quite a while, but it’s really not that difficult to understand.
We’ve been over this a few times, but let’s briefly recap for Fox’s benefit. Paul Krugman had a column the Republican network might find helpful.
When the economy is booming, and lack of sufficient willing workers is limiting growth, generous unemployment benefits may keep employment lower than it would have been otherwise. But as you may have noticed, right now the economy isn’t booming — again, there are five unemployed workers for every job opening. Cutting off benefits to the unemployed will make them even more desperate for work — but they can’t take jobs that aren’t there.
Wait: there’s more. One main reason there aren’t enough jobs right now is weak consumer demand. 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.
Krugman wrote that a year ago, and fortunately, benefits were extended a few months later. With Fox’s friends now in the House majority, the jobless probably won’t be as fortunate this time.
The basic concept here is quite simple: unemployment benefits are good for the economy. People who receive the aid aren’t sticking it in a mattress or a money-market fund; they’re spending it and doing so immediately because it’s their main source of income. This injects demand and capital into the economy quickly, helping the beneficiaries and the rest of us.
Fox finds this “puzzling” — or at least pretends to in order to play a stupid game for voters who don’t know better.
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