Thursday, January 29, 2015

Bizarro Economics

A Wall Street Journal editorial premised on a Seinfeld reference? Yeah, that’s way too good not to note.

President Costanza’s Jobs Boom:

In a 1994 “Seinfeld” episode, George realizes that “every decision that I have ever made in my entire life has been wrong. My life is the complete opposite of everything I want it to be.” Jerry replies: “If every instinct you have is wrong, then the opposite would have to be right.”

So Costanza approaches a gorgeous woman in the coffee shop and announces, “My name is George. I’m unemployed and I live with my parents.” To his surprise, she’s interested. He lands a job with the Yankees after insulting George Steinbrenner.

Maybe President Obama ought to take Jerry’s advice too. That’s our reading of a striking new economic study that examines Congress’s decision to zero out extra unemployment benefits last year.

The authors find that this abrupt policy shift created some 1.8 million jobs, or slightly more than three of five net positions filled in 2014. The cuts also pulled a million workers who dropped out of the labor force back into the workplace. This reality happens to be the opposite of what Mr. Obama and other liberal sachems predicted.

The idea of President Obama going the opposite direction from everything he’s done in the past is intriguing however implausible especially in the realm of foreign affairs.

The fact that ending unemployment benefits did actually help get people back to work is, as the editorial notes, pretty much exactly the opposite of what progressives enamored of government spending to stimulate the economy had predicted.

One of my favorites was Nancy Pelosi’s claim that unemployment benefits were the best way to create new jobs: