Tag Archives: jobs

Unemployment and Unemployment “Benefits”

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From the Abstract of the Naitonal Bureau of Economic Research’s just-released paper, The Impact of Unemployment Benefit Extensions on Employment: The 2014 Employment Miracle? by Marcus Hagedorn, Iourii Manovskii, and Kurt Mitman [emphasis added]:

We measure the effect of unemployment benefit duration on employment. We exploit the variation induced by the decision of Congress in December 2013 not to reauthorize the unprecedented benefit extensions introduced during the Great Recession. Federal benefit extensions that ranged from 0 to 47 weeks across US states at the beginning of December 2013 were abruptly cut to zero. To achieve identification we use the fact that this policy change was exogenous to cross-sectional differences across US states and we exploit a policy discontinuity at state borders. We find that a 1% drop in benefit duration leads to a statistically significant increase of employment by 0.0161 log points. In levels, 1.8 million additional jobs were created in 2014 due to the benefit cut. Almost 1 million of these jobs were filled by workers from out of the labor force who would not have participated in the labor market had benefit extensions been reauthorized.

If you want more of something, you subsidize it. The Democrats, since the Panic of 2008, have demanded ever more unemployment benefits, and it was only over their objections that the repeated extensions were halted and unemployment benefits stopped.

Hmm….

An Implication of the Greek Elections

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Greece is nearly bankrupt, it has defaulted on one round of national debt since the global Panic of 2008, it has received two bailouts from the rest of the European Union and from the IMF in partnership with various EU institutions (one of which included that default), and it’s demanding another round of…debt relief…against which the current troika of the IMF, the European Central Bank, and the European Commission are refusing to certify that Greece is ready and able to handle another loan. This current crisis reached its fullness last fall, and the then Greek government collapsed, necessitating Sunday’s snap elections.

Against that backdrop, the Syriza party won those snap elections resoundingly, coming from being a back bench party of growing influence to winning 149 seats in the 300 seat Greek Parliament—two short of an outright majority and the ability to govern alone. Syriza has been, throughout the post-Panic crisis, very much opposed to any sort of bailout other than outright debt forgiveness (the polite word for default), while the EU has been just as opposed to any alteration of the terms beyond stretching out payments in return for the Greeks submitting to ever higher taxes and ever reduced government spending. The result of acquiescence to the prior rounds of raising taxes and cutting spending has been an economy that’s varied between stagnation and collapse—driven especially by the combination of cutting spending (which, alone, would have been beneficial) and raising taxes. Hence the appeal of Syriza.

Lacking two seats, though, the party had to form a coalition government; if no one would join, the government would collapse again, and new elections would be necessary. The party thought most likely to join was To Potami with its 16 seats, a generally centrist party, but one also generally opposed to yet more taxing and cutting. Instead, Syriza formed the needed coalition with the Independent Greeks Party, which won 13 seats Sunday.

Either coalition party would have given Syriza sufficient cushion over the 151 seats needed to govern, so why the Independent Greeks? Syriza is a far-left party of Marxists, and the Independent Greeks are far-right party formed two years ago explicitly to oppose the EU’s austerity impositions on Greece. They’re also opposed to immigration and…multiculturism…and they want Greece out of the EU altogether. To Potami, not so much on any of those accounts, and although they oppose further “austerity,” they’re not hard over on it; they’re more malleable.

Now, what happens next? The new Greek Prime Minister, who should be Syriza’s Alexis Tsipras, has said he will force renegotiation of Greece’s existing “bailouts,” worth €240 billion ($268 billion), “or else.”

The EU is just as adamant about not renegotiating. German Chancellor Angela Merkel:

We believe Greece has accepted terms that are not off the table after the election day[.]

President of the Eurogroup [of eurozone finance ministers] of the Board of Governors of the European Stability Mechanism [of financial assistance programs for eurozone members in “financial difficulty”] Jeroen Dijsselbloem on the prospect for “leniency” for Greece regarding its debt:

I don’t think there is a lot of support for that in the eurozone[.]

The most likely (the plurality of a plethora of options) “or else” from this potential impasse would be Greece’s departure from the eurozone—to use its own currency—and possibly from the EU altogether. With the Independent Greeks joining Tsipiras’ coalition, he got the political backbone to hold out for exactly that as the only alternative to debt forgiveness.

A Greek departure has been projected to be a disaster for the eurozone, the euro, and the EU. It certainly would shake them, but even in the extremity of those three falling apart, it would hardly be a disaster. And it would be, in the longer run, good for Greece, too.

Even the AP Is Catching On

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They fact-checked President Barack Obama’s State of the Union speech, and they found these things.

OBAMA: At this moment—with a growing economy, shrinking deficits, bustling industry and booming energy production—we have risen from recession freer to write our own future than any other nation on Earth.

THE FACTS: Job growth has been…fueled in part by lower-paying jobs…which have replaced many higher-paying positions…. Part-time jobs also remain elevated: there are still 1.7 million fewer workers with full-time jobs than when the recession began in December 2007.

[F]aster hiring hasn’t pushed up wages much. They have been growing at a tepid pace of about 2% a year since the recession ended 5 1/2 years ago. That’s barely ahead of inflation and below the annual pace of about 3.5% to 4% that is typical of a fully healthy economy.

And

OBAMA: I am sending this Congress a bold new plan to lower the cost of community college—to zero.

THE FACTS: Zero for qualifying students; an estimated $60 billion over 10 years to the treasury.

And

OBAMA: Thanks to a growing economy, the recovery is touching more and more lives. Wages are finally starting to rise again. We know that more small-business owners plan to raise their employees’ pay than at any time since 2007.

THE FACTS: A survey of small businesses by the National Federation of Independent Business does show that a rising proportion plans to raise wages. But plans to raise pay aren’t the same as actually raising them.

Average hourly earnings rose just 1.7% in December from 12 months earlier, according to the Labor Department. That’s about half the rate that is typical of a healthy economy….

And on.

An Intolerance from Anti-Discrimination

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Atlanta Fire Department Chief Kelvin Cochran has been fired from the Department altogether by Atlanta Mayor Kasim Reed. Cochran’s reprehensible crime? He wrote a book, Who Told You That You Were Naked?, about morality from the Bible’s perspective. He also wrote about his views of homosexuality as informed by the Bible.

Reed suspended Cochran for a month over that book, and then on the day Cochran was to return to duty, Reed fired him. Reed said he did it because

I profoundly disagree with and am deeply disturbed by the sentiments expressed in the paperback regarding the LGBT community. I will not tolerate discrimination of any kind within my administration.

And yet, Reed is committing exactly that bit of miscreancy. He’s discriminating against a Christian man for his Christian beliefs. Reed’s willingness to be tolerant, and his claim to be anti-discrimination, are to be extended only to those who agree with him. To those who don’t think like he does, he gives the back of his hand, and he tells them to hit the bricks.

This is a textbook example of what the Bible is describing when it talks about hypocrisy.

Keystone and Vetoes

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All the pundits are looking to the Senate for an override of President Barack Obama’s pending veto of the pending Keystone XL Pipeline legislation. The Senate, it seems, has 63 votes for passage (which implies a cloture vote won’t be a problem), but the focus is on the Senate’s lack of four more votes to produce a “veto-proof” bill.

All the pundits are skipping over two key factors.

One is that a Senate passage with 67 Senators voting “aye” is not at all veto proof. That’s just for passage. The veto override is an entirely separate vote that comes after the President has, in fact, said “No” to his Senators and to the legislation. To override in the Senate, all 13 Senators voting for passage would then have to vote against their president to override. Every single one of them.

Also lost in the “veto-proof” blather, though, is a larger hurdle. Obama’s “No” would have to be overridden in the House, too: 290 Representatives would have to vote to override. That means that 44 of Nancy Pelosi’s (D, CA) Democrats would have to vote to override their President.

Good luck with that. Good luck with either of those.

Pass the bill, anyway, with a roll call vote in each House. Then do roll call votes in each House to override. Use Obama’s veto and those Democrats’ votes to shape the ’16 elections.