It’s never too early to critique a President’s speech, so why wait until he’s given it?  President Obama’s September 7 jobs speech is certain to take a new run at the longtime favorite: extension of unemployment benefits.  You’ll recall noted would-be economist Nancy Pelosi described how effectively unemployment insurance creates jobs, as did would-be economist and Press Secretary Jay Carney.

It’s a wonderful thing, irony!  I say that because Obama’s recent nominee for Chairman of the Council of Economic Advisers also happens to be an expert on the topic.  Princeton professor Alan Krueger has published several papers about it (Krueger 2011; Krueger 2008; Krueger 2002).  Remarkably, the actual economist on the President’s team doesn’t agree with the aforementioned would-be economists.

In 2002, Professor Krueger’s study found that more generous unemployment benefits resulted in longer spells of unemployment, measuring an elasticity of -1.0.  This elasticity means that a 1% increase in unemployment benefits results in a 1% increase in length of unemployment.  Professor Krueger’s 2008 article refined the analysis, teasing out the effects of laid off workers expecting recall and the actual unemployment benefit received (as opposed to the legal maximum).  These refinements showed that the actual effect was even greater.  Elasticities were between -1.6 and -2.2.  This means that an increase in unemployment benefits by any given percentage, say 10%, will increase the length of unemployment by 16% to 22%.

To put this in perspective, Professor Krueger analyzed the hypothetical situation of an unemployed worker moving from the state with the lowest weekly benefits to the state with the highest weekly benefits: the study concluded that the worker would reduce the time spent looking for work by 54 minutes per day (pg 15, Krueger & Mueller, 2008).

I am not the first to notice the irony.  In a demonstration of spin that would make Tim Groseclose proud, the Huffington Post and HotAir.com recently also commented on Krueger’s findings.  Predictably, each took their own slant.

The HuffPo article steered away from Krueger’s findings in 2002 and 2008 (described above) and instead focused on his 2011 working paper.  The paper explores some specific details of job searching during unemployment, and HuffPo focused on the fact that job search time declines as the length of unemployment increases; then the article offers a very reasonable explanation: that people get better and exhaust the stock of job opportunities.  The author uses an attention getter (“unemployed get more sleep!”) but then sets the reader’s mind at ease with the commonsense conclusion.  Picture the Scotland Yard Bobbie repeating: “Nothing to see here.  Move along!”

One has to wonder, how does the author miss the point?  We have a President advocating a policy that his recently-named adviser has shown is counter-productive.  And HuffPo bypasses that for a “no duh” point about how people search for jobs?

On the other hand, HotAir didn’t miss the opportunity.  Citing two Heritage Foundation pieces (2008 article) (2011 blog) HotAir’s author Tina Korbe pointed out the irony and predicted whether the President will follow Nancy Pelosi and Jay Carney’s advice or Alan Kreuger’s research.  What’s your guess?  We’ll find out on September 7th (correction, now the 8th).

“Most recessions… are not very important events. This one, though, has taken U.S. GDP almost 10% off its long-term growth trend.”  So says Robert Lucas, 1995 Nobel laureate in economics as quoted by Dan Henninger in “The Disappearing Recovery” (6/13/11 WSJ Opinion).

Why is this important? Why do we care if we’re 10% below the trend? Here’s why: think back a couple decades to the cars, computers and medicine that we had in 1990. Breast cancer survival rates were much lower.  Diseases like AIDS were thought to be a death sentence, whereas people now live a long time with the disease under control.  Cars used more gas, created more pollution, were less comfortable and broke down much faster. Most computers didn’t have graphics, much less high speed internet… not to mention cell phones, HDTV, tablets, etc.  How many things do you enjoy today that did not exist 20 years ago?

In fact, the UN produces a calculation of “Human Development” that combines life expectancy, education and living standards into one number, and that shows a 5.25% improvement in the U.S. from 1990 to 2010.  If that doesn’t seem like much, think again.  In the whole of human history, human life has improved 5% in just two decades!  That’s staggering improvement.

What about pollution you say?  Turns out that as society grows, more people means more waste, but wealthy societies also care more about quality of life.  Pollution where I live (Los Angeles, CA) has been improving dramatically in the last two decades.  Look at the data yourself.

The wonderful things that we have today, the things that make our lives more interesting, better and, most importantly, healthier and longer, are the result of robust economic growth. If you are glad that you live in the world of 2011 instead of 1991, then you should be thankful that economic growth has averaged three percent since 1951 instead of two percent. If policies in 1951 had limited our growth by just that one percent, we would only now be achieving the progress that we had 1991. We would have lost a whole generation’s worth of progress!  Who wants to use a computer or watch a television from 1990?  And, if you had an accident tomorrow, who would want to be transported back in time to a hospital in 1990, with vintage equipment and know-how?  Who wants to condemn their children and grandchildren to that?

This is why we should always care about policies that promote growth, because they promote human life.  A single percentage point difference in economic growth can result in 20 years of progress over the course of 60 years.  That may be the difference between enjoying or aching for life saving advances 50 years from now when you and your loved ones need them.  It may be the difference between finding a way to reverse global warming or suffering the consequences in 50 years.  We can’t predict the next great advances that will improve and extend our lives, but we can count on one thing: we can push them further into the future by pursuing policies that retard economic growth today.

Thanks to Politizoid for pointing out on June 1 the Meghan Daum editorial offering a laughable explanation of Obama’s inarticulate stammering. Rather than an articulate defense of the inarticulate, she provided an instructive example of the nature of liberal argumentation in this post-Alinsky world. Let’s break it down.

Instead of defending Obama on his merits, she offers a preposterous and flimsy alternate explanation: he’s too smart for his own mouth.  Recognize the ring of propaganda? Assert a position that is superficially absurd, but assert it anyway, and let that assertion deflect at least part of the blame.  If the other side argues, at least you’re arguing about the explanation, and not discussing the shortcoming. It moves the debate off topic. Underhanded, cheap and effective to a degree.

Quickly transition to step two, which is to accuse the other side of equal if not greater inadequacies.  This time, it’s William F. Buckley, who’s no longer here to defend himself.  He’s an inspirational and revered character for conservatives, so their first instinct will be to defend him, even though he doesn’t need defending because a) he’s passed on, and b) the issue is not about him, it’s about Obama.  But, she spends half the article reminiscing about Buckley, poking fun at him, baiting opponents and deflecting attention from Obama’s shortcomings.

The first tactic is just standard propagandist tactics. The truth is irrelevant; make something up. Plausibility is secondary.  The second tactic is from Rules for Radicals, this time used in a counterattack form.

· Pick the target, freeze it, personalize it, and polarize it

· Ridicule is man’s most potent weapon.

The article is hopeless for convincing any skeptical conservative, but for Democrats, no doubt they lapped it up. Daum told them what they wanted to hear, regardless of how absurd it was.  That’s another Alinsky tactic.

· A good tactic is one your people enjoy.

The real question is how effective is it with Independents, and I have to think that it is a net plus for Obama, even if it is small.  If nothing else, there is a writer in several major papers saying that Obama’s really smart, and his stammering is just like, maybe not as bad as, conservative greats from the past.  It is another voice in the chorus echoing, “Yeah, it must be OK, and he must be as great as they say.  Everyone seems to think so.”