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Tuesday, February 24, 2009

Rounds Joins Jindal Jive, Stiffs Stimulus

...not to mention workers.

South Dakota Governor M. Michael Rounds joins the ranks of Republican governors playing politics with the stimulus package, telling that Sioux Falls paper that he will reject five million dollars of unemployment insurance included in the stimulus package. Governor Rounds says he's concerned that accepting the money could (could—I have yet to hear a single governor say it will) require South Dakota to raise its unemployment insurance tax in a couple years after the stimulus money runs out.

The Republican commentariat celebrates, but Governor Rounds's gambit is pure political theater, not to mention bad economics:
  1. The $5M Governor Rounds would so bravely reject is less than 1% of South Dakota's expected $662.5M stimulus take. That's like picking only the blue sprinkles off your birthday cake.
  2. Unemployment benefits are one of the most effective economic stimulus tools available, with every dollar generating $1.64 in economic activity. That's second only to increasing food stamp benefits for direct economic impact and better than infrastructure spending, general aid to state governments, and tax cuts, none of which Governor Rounds is poo-pooing.
  3. The "strings" on the unemployment aid Governor Rounds doesn't like are actually requirements that the New York Times says at least half of the states have already enacted:
    To qualify for the first one-third of federal aid, the states need to fix arcane eligibility requirements that exclude far too many low-income workers. To qualify for the rest of the aid, states have to choose from a menu of options that include extending benefits to part-time workers or those who leave their jobs for urgent family reasons, like domestic violence or gravely ill children [editorial, "What Part of 'Stimulus' Don't They Get?" New York Times, 2009.02.23].
  4. The "strings" would actually modernize unemployment insurance rules to take advantage of computerized income reporting (ah, computers: that's why Gov. Rounds doesn't like it).
  5. The rule changes would expand coverage by keeping better track of part-time and low-income workers... you know, folks who could probably use more help than the GOP's Wall Street pals.
  6. The whole point of the stimulus package is to shorten the recession. Boost the economy and get people back to work sooner, and the state won't have to draw down its unemployment insurance funds as quickly. Let the recession roll, and we'll be raising unemployment taxes sooner to replenish the more quickly depleted fund.
Governor Rounds and his posturing pals are standing in the way of one of the most effective stimulus tools we have available, not to mention fair and effective upgrading of their states' unemployment insurance rules. Let's put politics aside, do what's right for South Dakota workers who can use the help, and take our best shot at boosting the economy.


  1. As far as I can see, this is all part and parcel of income redistribution. And I see nothing wrong with thumbing our nose at this.

  2. Better get your vision checked, Anon.

    Obviously that's not how Governor Rounds sees it, or he'd thumb his nose at the other 99% of the stimulus money, not to mention the 150% return South Dakota gets for every dollar it pays in federal taxes.

  3. More money is not needed for unemployment. As a matter of fact, they should cut unemployment by $10 million just to make a point.

    When you raise or extend unemployment payments, unemployment go up. This is proven time and time again. When you cut unemployment, unemployment goes down.

    There are jobs out there, but when you can sit on your butt and do nothing, why would you want to work at McDonalds or Walmart?

    But when there is no money coming in, then people get desperate and gasp, get jobs.

    So by cutting unemployment, you force people to get jobs. So I would get for every $-1 spent, we would probably get back $2. (And also, not to mention, most places offer health care for the courageous who work full time, many even offer health care for part time, just costs more)

  4. Yup, we sure don't want unemployed people to be able to find money to buy groceries, there are executives who can't live on $400,000 a year, and we know who generates jobs.

    I have found it amusing that a decent minimum wage is opposed because somehow it destroys initiative, but limits on crazy executive salaries will destroy initiative among the already rich.

    Some of these wingnut ideas require some incredible mental gymnastics and varying forms of myopia and blindness.

    Rounds and Jindal are making an appeal to the wingnut GOP right in preparation for getting their support in coming elections. Never mind that their ambitions will mean millions less for people unemployed because their hero George Bush destroyed the economy.

    TIME just noted that less than a half percent of the population got over 11 percent of all the US income. Another commentator noticed that 40% of the income during the Bush administration came from Wall Street and banker salaries and bonuses.

    It may just be that the huge executive salaries are the reason that more people are now unemployed and plants are shutting down.

  5. Cory, why are you always so interested in giving a handout versus a hand up. Do you know what it means to enable someone? I have a brother-in-law who has his 30 y/o step son living with him. Why? Because there are no rules, no boundries. His mother feels guilty over her previous marriage so just lets Junior hang out with a free meal ticket and he is happy to do it. This is like providing a alcoholic a 5th every morning and telling him its okay to stay home because he/she is sick. Obama has a big heart, he just has to learn how to motivate versus resuscitate.

  6. Way to go Governor Rounds! Jindal for President in 2012!

  7. The problem with socialism is that you eventually run out of other people's money." - Margaret Thatcher

  8. So now unemployment is socialism? Tell us, just what is compassionate conservatism - is it the hypocrisy that we always thought it was?

    Unemployment sure looks like a hand up, a means to get your feet back under you so you are able to stand up and get another job. These right wingnuts won't be happy until servitude is made legal (again). These clowns act like they are the only ones who pay taxes.

  9. Nice quotes and slogans, kids, but I'm still waiting for a more effective prescription for stimulating the economy. Oh yeah, and Governor Rounds's plan will raise unemployment taxes on South Dakota businesses sooner than the stimulus.

  10. "Always" giving a handout? No, not always, but I recognize that sometimes when a guy is down, through no fault of his own, he doesn't need you stand there moralizing about the free market and personal responsibility. The folks who lost their jobs at Gehl because bankers wrecked the economy and won't lend don't need a lecture; they need jobs, and they're looking. But at the moment, they need grocery money for their kids.

    Pragmatism over ideology. Try it.

  11. Anon 4:42

    Yes, when business is forced to pay unempoyment insurance premiums, then this money is redistributed, it is in fact socialism.

    Why the outrage, does the term socialism strike a nerve with you? Sounds like it does.

  12. Gehl started to go downhill when it got sold to a foreign country.

    And once again to the poster who blames all this on Bush. Get a life, look at the facts, or don't, just continue Bush bashing if it makes you happy. Doesn't make it true though. Lots of reasons - greed yes, Acorn etc forcing banks to give loans to people who never could pay them back, the dependent attitude of so many, the present wholesale spending by O, Pelosi, et al.

  13. Hey 6:11, News flash: Banks starting really making high risk loans when wall street got involved after Fannie and Freddie had accounting problems, not by Acorn, but the huge profit margins. Manitou is a long standing company more stable than Gehl. Better distribution system.

  14. Unemployment for part time jobs. Are you fricking kidding me!!! What a joke!!
    People get a clue!!! This money is not growing on trees!!! Quit using the wallstreet LOANS as an excuse to give away the farm!!!

  15. It doesn't make any differnce if Manitou (I assume that's the group that bought Gehl) is a good company or not. It bought Gehl and redistributed the jobs right out of Madison. If the same ownership were in place at Gehl, I would imagine the jobs would still be here too, or at least most of them.

  16. The former Gehl wanted to be acquired by Manitou. There's no going back so better to have your eyes open. They are family controlled but their stock has taken a beating (5.38 Euros from almost 50): http://www.reuters.com/finance/stocks/overview?symbol=MANP.PA

    1-28-09 "Given the sharp downturn in order intake in the last few weeks of 2008, the group expects sales for the first quarter of 2009 to be down significantly on the year before," the statement said.

    Citing an unstable economic outlook and poor visibility on its activities for 2009, it said it would "intensify the rightsizing measures initiated last Summer aimed at scaling back production capacity and reducing structural costs". (Reporting by Dominique Vidalon; Editing by David Holmes)

  17. Gehl: I know some folks around here take solace in blaming foreigners for our problems, but I'm with Anon 9:28. Ownership is irrelevant to the fact that heavy equipment sales dried up last year and Gehl didn't have orders to fill.

    And the folks at Gehl who are unemployed or undermeployed did nothing to bring that problem on themselves. They aren't eager to live off government checks; they want those skidsteer orders to come rolling in again. But until they do, let's help 'em out and put off having to increase UI taxes on South Dakota businesses until after the recession.


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