Daniel A. Bosh – 2/12/09

This page was last updated on February 16, 2009.

Helping the jobless boosts economy; Daniel A. Bosh; Beaver County Times; February 12, 2009.

If you’ve read Mr. Bosh’s letters over the years, you recognize him as a died-in-the-wool leftist. In the 2004 presidential campaign, Mr. Bosh was a Democrat national delegate committed to Dennis Kucinich. I could be mistaken, but I believe Mr. Bosh is/was a fulltime employee of the Steelworkers Pension Trust. There’s nothing wrong with that except it means Mr. Bosh isn’t an impartial observer when it comes to labor union issues, and “minimum wage and collective bargaining” are labor union management issues.

Below is a detailed critique of the subject letter.

“The Jan 28, letter ‘No reason to extend benefits for jobless’ could not be more wrong.”

[RWC] Sure it could. It could have agreed with authors like Mr. Bosh. This is the second attempted rebuttal to my letter. The first was entitled “Jobless benefits should be extended.”

“Leaving aside the letter’s fairy tale economics and disjointed logic, I’d just like to point out that programs like unemployment compensation at the very least serve as economic defense against spiraling unemployment.”

[RWC] Mr. Bosh wants to “leave aside the letter’s fairy tale economics and disjointed logic” because he knows he can’t refute it. Mr. Bosh would have been all over it if he could.

“When people lose their jobs, they spend less. When their unemployment compensation runs out and they have no income, they obviously can’t spend any money.

“Demand for goods and services decreases, resulting in more job losses, leading to further decline in disposable income, further reducing demand, leading to more job losses.

“The economy spirals downward.

“Extending unemployment benefits in a severe economic recession such as this helps impede that downward spiral by putting money in the hands of people most likely to spend it. Spending stimulates the economy far more than tax cuts for the rich.”

[RWC] Where did “tax cuts for the rich” comment come from? My letter advocated “cutting income taxes for those who actually pay them.” Is Mr. Bosh implying only “the rich” pay income taxes?

Mr. Bosh seems to believe only spending helps in a recession. Does Mr. Bosh believe people who don’t spend their money stuff it under their mattress? Whether you invest, save, or spend, it helps the economy. For example, saving makes it easier for lenders to lend to both businesses and consumers. You may recall one of our problems is a reluctance for lending institutions to lend because they are concerned about maintaining sufficient cash reserves to cover potential bad loans. Saving increases those cash reserves. The problem for folks like Mr. Bosh is this. If they acknowledge investing and saving also help the economy, they have a tougher time selling the idea government needs to rob Peter to pay Paul to “stimulate” the economy.

“Additionally, fiscal stimulus, including direct government spending on infrastructure, will also be needed. However, government programs that benefit the unemployed and policies like minimum wage and collective bargaining, which increase the income of workers, are an important part of any plan to restore prosperity.”

[RWC] Wow, and Mr. Bosh accuses me of “fairy tale economics and disjointed logic?” As I noted in my letter, “the minimum wage artificially drives up all wages and provides a disincentive for business owners to offer employment.” The same is true when wages arrived at by “collective bargaining” aren’t market driven.

“Failing to extend benefits for the unemployed and support the income of working people in a recession of this magnitude for those who are the victims of the disastrous policies of the Republicans would be wrong.”

[RWC] Note Mr. Bosh didn’t detail “the disastrous policies of the Republicans.” That’s because it’s just another talking point Mr. Bosh can’t defend. Indeed, Mr. Bosh likely knows it was Democrat programs and policies that fostered giving mortgages to people who could not afford them.

Be aware Mr. Bosh’s definition of “working people” may not be the same as yours and mine. According to a local lefty, you’re “working people” only if someone else signs your paycheck. Therefore, no matter how large or small the business, we’re not “working people” if we own a business.

“It would cost us dearly in terms of economic recovery and could be measured not only in monetary terms but also in terms of human suffering.”

[RWC] Hmm, let’s see what Henry Morgenthau, FDR’s Treasury Secretary during the Great Depression, said about Mr. Bosh’s position. Testifying before the House Ways and Means Committee in May 1939, Sec. Morgenthau said, “We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong … somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises … I say after eight years of this Administration we have just as much unemployment as when we started … And an enormous debt to boot.” Further, unemployment never got below 9.9% before the U.S. entered World War II.