Top 7 Responses to Obama’s Push for Unemployment Extension

| January 7 2014
Christopher Cook

President Obama’s call today for an extension of emergency unemployment benefits is, not to put too fine a point on it, perverse.

  • It includes false claims;
  • It seeks to cover up his administration’s own economic failings;
  • It asks us to continue perverse incentives, damaging the economy and individual drive to work;
  • It includes gross contradictions, in the hopes that the American people won’t notice;
  • It deploys the standard, barely-tacit calumniation of Republicans as being “uncaring,” when in fact they are simply trying to help the economy recover and not bust the budget.

 

False claims

#1 — A blatant “error”

Claim: The White House says,”The unemployment rate (7.3% in October) is currently higher than it was at the expiration of any previous extended UI benefits program.” (New Report: The Economic Benefits of Extending Unemployment Insurance, White House Economic Report, 12/5/13)

The Truth: The unemployment rate is actually lower today than it was when “emergency” benefits were allowed to expire following the recession in the early 1980s. Our unemployment rate is at seven percent and dropping; it is entirely within the historic norm to allow the emergency benefits to expire.

 

#2 — A bizarre assertion

Claim: “Expiration of extended UI benefits may also lead some long-term unemployed to stop looking for work and leave the labor force, reducing the number who could eventually find jobs as the economy heals.” (New Report: The Economic Benefits of Extending Unemployment Insurance, White House Economic Report, 12/5/13)

The truth: The non-partisan Congressional Budget Office has found that extending the program will lead to some workers reducing the intensity of their job search and staying unemployed longer.

Such data are repeated elsewhere, in numerous sources. But there is something else here:

It is mendacious in the extreme for this administration to fret publicly about people dropping out of the labor force. This administration has presided over a precipitous decline in labor force participation—down to levels below those we saw at the end of the 1970s.

labor_force_participation rate

Meanwhile, they take credit for even moderate drops in the unemployment rate, despite the fact that if the participation rate were at the level it was when Obama took office, unemployment would be over 10%. Driving people out of the workforce and then taking credit for “lowering” the unemployment rate takes some chutzpah.

 

Cover-up of failure

#3 The lack of jobs is your fault, Mr. President.

Barack Obama and the Democrats want to hold themselves out as the saviors of people suffering from a terrible economy, as the only ons who “care.” But this is an economy that they broke. As Katie Pavlich astutely points out . . .

The Bureau of Labor Statistics confirms that a lot of jobs have been created under Obama’s leadership — 4.4 million by the bureau’s latest count. What Obama did not say, however, was that the nation shed 4.3 million jobs during the early days of his term, and that the net gain since he took the oath of office in January 2009 is just 125,000 jobs.

The time for blaming our economic woes on a previous administration are long over. This is the worst recovery since the Great Depression. Just because the voters were too addled to hold Obama accountable for it in 2012 doesn’t change that fact.

Obama’s policies are, in many ways, a repeat of the damaging polices undertaken by FDR (which were a continuation of, rather than a departure from, the mistakes that Herbert Hoover made): Increased taxes, massive new government programs, heavy regulation and government involvement in the economy (including takeovers), Keynesian stimulus, injecting massive uncertainty into the economy, etc. Obama is screwing up by the numbers, and yet he’s claiming credit for whatever little recovery the beleaguered private sector has been able to eke out.

 

Perverse incentives

#5 A typical trope

Claim: “In over a dozen studies, economists have found that any disincentive to find new work that could result from extended UI benefits is, at most, small.” (New Report: The Economic Benefits of Extending Unemployment Insurance, White House Economic Report, 12/5/13)

Oh really? Then explain this: In July of 2013, the Emergency Unemployment Compensation (EUC) program ended in North Carolina. Since then, the state of North Carolina has seen it’s unemployment rate fall a full percentage point and a half, from 8.9% to 7.4% in only four months.

If that drop had taken a year, one might be able to claim that correlation was not causation. But four months?

The White House’s claim also defies common sense (for whatever that is worth these days).

Someone who has been unemployed for a long time keeps receiving benefits. Is he

A) More likely to look for work in earnest?
B) Less likely to look for work in earnest?

Benefits finally end for someone who has been unemployed for a long time. Does he become

A) More eager to find a job?
B) Less eager to find a job?

Think about it for a moment. Use your logic and your understanding of human nature. Place yourself in these two positions and imagine what you might be compelled or tempted to do.

 

Gross Contradictions

#6 Having and eating cake 

Unemployment benefits are designed to be a transitional aid. Emergency extended unemployment benefits  are designed to be temporary. They are used only in the worst economic situations, and they have only been offered a handful of times in our history. The current program was put in place as we entered a deep recession in 2008, but according to the administration’s own claims, we’re supposedly doing so much better economically on the jobs front now. So what’s the deal—do we need emergency benefits extended, or not? Here’s Pavlich again:

This is a classic example of Democrats wanting to have their cake and eat it too. Democrats cannot honestly argue an unemployment benefit extension is necessary because jobs aren’t available for the unemployed while also touting a successful economy and growing jobs.

Extended unemployment benefits are just a political ploy. Obama and the Democrats don’t care how much money they spend, or how much perverse incentive they inject into the economy—or about the negative impact that either has on human lives. They just want to gain a political advantage by appearing more “caring” than those wicked, dastardly Republicans. Obama would extend benefits for a million weeks if he could . . . as long as the GOP opposed it. The only time he might act otherwise is if the GOP proposed extending benefits.

 

Calumniation, Thy Name Is Democrat

#7 Bring forth the Cudgel of Compassion!

Barack Obama has no idea how to “fix,” the economy. If he did know, he would not try, for several reasons:

1. Fixing the economy involves leaving the economy alone and letting millions of voluntary interactions, undertaken by people acting in their own best interests, repair the damage. Barack Obama is a statist—he is ideologically incapable of leaving anything alone. He must meddle, coerce, and control. That is what statists do.

2. Fixing the economy would leave Obama and the Democrats without a cudgel with which to beat Republicans. If people go back to work, then there’s no political wedge issue about extending emergency benefits with which to clobber his enemies. As long as there is some way that Obama can spend (other people’s) money to appear compassionate—and as long as the Republicans are still compelled to try to inject some fiscal sanity into the discussion—he has them right where he wants them: with a giant “Uncaring” target painted on their hapless faces.

Never mind the fact that . . .

The recently expired emergency benefits

  • were in place longer (66 months),
  • extended more times (12),
  • cost more($265 billion), and
  • added more to the debt ($210 billion)

than any previous program.

Never mind that fact that, it has to be sold with lies, it will delay the start of an earnest job-hunt for many, and it will harm the economy and people’s lives. Barack Obama hasn’t even thought the issue through that far. Our Community-Organizer-in-Chief has found another issue with which to bash Republicans, and that’s all he needs to know.

 

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