Green Room

Jay Carney Claims Unemployment Checks Create Jobs

posted at 12:55 pm on August 11, 2011 by

In an exchange yesterday with a reporter from the Wall Street Journal, White House Press Secretary Jay Carney made the outrageous claim that extending unemployment insurance creates jobs.

That statement is worth rereading. Carney wasn’t claiming that unemployment checks promote spending, which is the point he subsequently attempted to make (see accompanying video), but that they create jobs.

Carney, who was supposed to be a cut above his predecessor in both intelligence and demeanor, even channeled Robert Gibbs in his caustic reaction to the reporter who posed the question:

Oh, uh, it is by, uh, I would expect a reporter from the Wall Street Journal would know this as part of the entrance exam.

Ho, what a knee slapper!

Bryan Preston at Pajamas Media reacts to Carney’s addled logic:

True, unemployment pays people money and they’re likely to spend it. But you’re also paying people not to work. Not to produce anything. The longer you pay them to not work, the longer they’re likely not to work. And the money to pay people not to work has to come from somewhere. Guess where (besides Jay Carney’s back side)?

That’s right—from people who are working, being productive, and who also are likely to spend the money. While unemployment insurance of some form and length is reasonable, the notion that it creates jobs is laughable on a Seinfeldian level. It’s a safety net, not an engine of our economic might.

Put it this way: If Carney’s logic held up, we should just carpet bomb the country in unemployment checks, forever. That would create a billion jobs and we’d all be swimming in prosperity.

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Doggone it! If only there were more unemployed people around we could give unemployment checks to, the quicker we’d get people back to work!

munchnstuf on August 11, 2011 at 1:45 PM

Any minute I expect Carney to say, “I know you are, but what am I?” This Admin is just shattering the records for obnoxious.

teacherman on August 11, 2011 at 3:23 PM

I’m pretty sure Pelosi said the same thing not that long ago?

Dingbat63 on August 11, 2011 at 3:55 PM

If Democrats really cared about the economy, they’d all quit their jobs and go on unemployment. Selfishly keeping their jobs just depresses job growth and is an act of terrorism.

malclave on August 11, 2011 at 3:56 PM

I’m pretty sure Pelosi said the same thing not that long ago?

She did indeed. I thought Carney was brighter than that.

Howard Portnoy on August 11, 2011 at 4:31 PM

JC: The White House does not create jobs, but unemployment does.

Therefore, the White House can create unemployment and it does.

Dhuka on August 11, 2011 at 5:44 PM

In fact, Pelosi and the Dems kept extending unemployment benefits all the way out to 99 weeks for the stated reason that it was great stimulus. They employed the reasoning that the higher percentage of stimulus that is spent the better, and the unemployed were perfectly situated to spend the highest percentage of the money. So to the economically illiterate, unemployment benefits are great stimulus.

I’m trying to remember where the administration ranked unemployment benefits on the multiplicative factor scale. For instance, they claimed every dollar of upper income tax cut extensions would only create, say, 75 cents of increased GDP (at least in the short term). But most forms of government spending, like infrastructure supposedly had multiplicative effects as high as $2-$3 per government dollar spent. The money would be spent, jobs would be created, those people would spend the money, that would create more jobs in the industries that money was being spent on, and so on. And somehow that is supposed to multiply the effect of the money, as opposed to someone merely investing their money and providing capital for businesses to expand, which somehow was ranked not very stimulative. Of course you can follow the flow of any money. But a true economist has to take into account a complicated series of costs AND benefits (Bastiat called it “what is seen and what is not seen”) all along the way.

At the core, paying people to not work just seems like bad economic policy on it’s face. Our GDP is a measure of how much we PRODUCE, so paying people to not produce cannot possibly be the best way to raise GDP. It is another welfare program to help people through hard times.

willamettevalley on August 11, 2011 at 7:37 PM

And eggs create lions.

gary fouse on August 11, 2011 at 8:50 PM

The money would be spent, jobs would be created, those people would spend the money, that would create more jobs in the industries that money was being spent on, and so on.
willamettevalley on August 11, 2011 at 7:37 PM

No No No your not paying attention!
here it is, all business large and small need to take out loans so they can make payroll!
The more ya borrow the more people you can hire, the more money you can borrow each week to make payroll!
Soon no more unemployment! Business large and small are going to have to hire people in other countries just so they can borrow more money to make payroll!
Isn’t that great! That’s how the government does it!

S/off, but that is how the government does it!

DSchoen on August 12, 2011 at 1:46 AM

Obviously, Jay meant unemployment creates ‘government’ jobs. Otherwise lowering taxes would do the same thing more efficiently. So, don’t forget to include his subtext when you listen to Mr. Blarney.

sleepyhead on August 12, 2011 at 11:53 AM