Subsidized Unemployment and the Work Ethic

May 13, 2021 by Dan Mitchell @ International Liberty

I wrote two days ago about subsidized unemployment, followed later in the day by this interview. 

 

This controversy raises a fundamental economic issue. I explained in the interview that employers only hire people when they expect a new worker will generate at least enough revenue to cover the cost of employment.  There’s a similar calculation on the part of individuals, as shown by this satirical cartoon strip.  

 

People decide to take jobs when they expect the additional after-tax income they earn will compensate them for the loss of leisure and/or the unpleasantness of working.  Which is why many people are now choosing not to work since the government has increased the subsidies for idleness (a bad policy that began under Trump).  The Wall Street Journal editorialized about this issue a couple of days ago.

White House economists say there’s no “measurable” evidence that the $300 federal unemployment bonus is discouraging unemployed people from seeking work. They were rebutted by Tuesday’s Bureau of Labor Statistics’ Jolts survey, which showed a record 8.1 million job openings in March. …But these jobs often pay less than what most workers could make on unemployment. That explains why the number of job openings in many industries increased more than the number of new hires in March. …The number of workers who quit their jobs also grew by 125,000. …some quitters may be leaving their jobs because they figure they can make more unemployed for the next six months after Democrats extended the bonus into September.

Dan Henninger also opined on the issue for the WSJ. Here’s some of what he wrote.

President Biden said, “People will come back to work if they’re paid a decent wage.” But what if he’s wrong? What if his $300 unemployment insurance bonus on top of the checks sent directly to millions of people (which began during the Trump presidency) turns out to be a big, long-term mistake? …Mr. Biden and the left expect these outlays effectively to raise the minimum wage by forcing employers to compete with Uncle Sam’s money. …Ideas have consequences. By making unemployment insurance competitive with market wage rates in a pandemic, the Biden Democrats may have done long-term damage to the American work ethic. …The welfare reforms of the 1990s were based on the realization that transfer payments undermined the work ethic. The Biden-Sanders Democrats are dropping that work requirement for recipients of cash payments.

Amen.

I made similar arguments about the erosion of the work ethic last year when discussing this issue.

And this concern applies to other forms of redistribution. Including, most notably, the foolish idea of big per-child handouts.

P.S. The WSJ editorial cited above mentioned the Labor Department’s JOLT data. Those numbers are also useful if you want proof that federal bureaucrats are overpaid, and you’ll also see that the same thing is true for state and local government employees.

From JFK to Joe Biden

Democrat presidents promise miracles and deliver — not much. 

By R. Emmett Tyrrell, Jr. April 13, 2021

 

In predicting what we can expect to be the achievements of President Joe Biden, let us consider what his modern Democratic predecessors have achieved. There is a pattern in the president’s predecessors’ achievements that is revelatory. Briefly, consider what they did.

Ever since the presidency of Jimmy Carter no Democratic president has achieved much of anything, though all have promised greater and greater miracles.

President John F. Kennedy entered the White House as a war hero, and he pursued the Cold War with courage and growing astuteness. He had plans for the domestic front but was not given the time to implement them. Suffice to say, he was a successful Cold Warrior. 

(Editor's Note:  Unlike the author I'm not a fan of JFK, or his administration.  He was not a successful president, he was a media favorite as was his wife.  Both of whom were overrated.  Furthermore, I wouldn't qualify him as a successful cold warrior.  He demonstrated his failings during the Cuban Missile Crisis. As the real history came out it was clear Khrushchev ate JFK's lunch, not the other way around.  But his failure as a president, and as a man, was even more exposed during the Bay of Pigs and his betrayal of the Cuban freedom fighters.  Two things everyone seems to forget:

• One, there was a lot of talk about his even being nominated by his party for a second term.
• Two he was elected through voter fraud, and Nixon and all the establishment knew it.  RK)

President Lyndon Baines Johnson was no war hero, but he entered the White House with a long record of legislative achievements, and while in the White House he fashioned a staggering record of domestic accomplishment — a record that cost the country billions and achieved little, but getting it through Congress took enormous energy and cunning. In fact, it cost him his life in the end, but the Great Society stands as a monument to him — a monument to his folly, but a monument nonetheless. As for the war in Vietnam, LBJ showed some grit, and our military whipped the communists again and again. The fault of the war’s outcome resides with the Democrats on Capitol Hill. They lost the war.

The next Democrat to enter the White House … well, what can I say? I called him the Wonder Boy, Jimmy Carter. He left no Great Society or New Frontier, but after dithering around for three years he did begin to build up the military, and I am told he left the White House with a modest reduction in the heating bill. After him came Bill Clinton, who initially talked of an infrastructure plan and of a nationalized health-care policy, but who actually achieved very little until Newt Gingrich and his Republican colleagues gained their majority. Then Bill and Newt brought us a bipartisan government that was pretty much a success except for Bill’s impeachment.

After Bill came Barack Obama, who was the first gentleman of color to become president. This should have been an achievement in itself, but it only opened the door for the 1619 Project, endless talk of systemic racism, and arguably the largest outpouring of racial hatred that has ever been seen in this country: in the schools, the streets, no place is free of it, and still Obama remains silent.......To Read More.....

 

Biden's California Dream

"Make America California." 

Fri Apr 9, 2021 John Stossel 12 comments

 I was surprised to read (in The Los Angeles Times) that the Biden administration's "role model for America" is... California! He wants to "Make America California." That is a terrible idea. Californians now rush to move out of California. Some hopeful folks still move there, but so many more leave that California now loses more than 10,000 citizens every month. In fact, the state will soon lose a congressional seat.

Why do Californians leave? "Exorbitant tax rates, high crime rates, the failing public school systems, the exorbitant cost of living," says reporter Kristen Tate in my new video. So many Californians move away that there's now even a shortage of U-Hauls. Renting one to go from Los Angeles to Houston costs four times as much as it does to go from Houston to LA.

"People are just emptying out!" says Tate..........To Read More....

 

Minneapolis neighborhood which vowed NOT to call cops after George Floyd's death is now struggling with a 300-person homeless camp in their local park which has left them feeling unsafe because of drugs

By Leah Simpson For Dailymail.com 24 June 2020 |

A Minnesota neighborhood where many residents vowed not to call the cops on people in their community following the death of George Floyd, are finding it difficult to come up with alternatives after about 300 homeless people have set up camp in a local park.

Those who live nearby where Floyd was killed at the hands of cops on May 25 welcomed dozens of tents to Powderhorn Park while the displaced people look for permanent accommodation, urging officials not to evict them for now.

But in the past two weeks since they've been using the open space, people living near the park have complained about a heavy flow of traffic keep them up at night as drug dealers. Two people in the encampment have already been taken away in ambulances after overdosing............To Read More.....

San Francisco, solid blue city of -- empty storefronts and missing young people

January 12, 2020 By Monica Showalter

San Francisco is getting to be a hellhole and not just because crooks are having a field day, or a vast homeless army has prompted new tech 'innovations' in poop-map apps.

It's actually becoming a city with a hollowed out look, redolent of some place like Steubenville, Ohio or maybe Utica, New York, during the bad years, empty storefronts and missing young people. So much for the trope that leftwing cities, with their walkable boulevards full of food trucks, handmade crafts, knitting shops, bookstores, artisan cheese shops, gourmet restaurants, and cafes are more lively and liveable than rightwing places. For awhile, that did seem to be the story. But it's coming to an end. Sure, there's vast wealth. But despite California being in an economic boom, the place is starting to look like Venezuela.

The U.K. Guardian of all places has a haunting report:.........To Read More....

Inner-City Carnage

By John Conlin August 22, 2018

In the course of my management consulting, I've been to some of the toughest neighborhoods in the country.   If you do business in these areas, you know to always visit them relatively early in the morning, before the animals wake up. Thus, in my travels, I'd see four- and five-year-old kids playing as all four- and five-year-olds do.

But as they got older, they developed an increasingly hard look in their eyes. Even at that age, they had put up with more crap than one can imagine. The neighborhoods they were born into have astonishing crime rates. The few terrorize the many, and unlike the police, they don't leave.

A great deal of America's $500-billion annual illicit drug trade flows through their world. It's an illegal trade where violence and fear take the place of contracts and the rule of law – an illegal trade that, unfortunately, often offers the best economic opportunity.

Job opportunities are limited, and youth unemployment reaches heights unheard of anywhere else in the country. A hand up is not an easy thing to find in these neighborhoods................ Read more

 My Take - Leftists unendingly demand and promise utopia.  They deliver dystopia! But one thing is clear.  No education system will fix anything unless we fix the number one underlying cultural paradigm that's destroying these inner city societies.  Illegitimacy!  Black America has a 70% illegitimacy rate and nothing anyone else does can help them or fix them.  That has to be done by that community and their black "reverends" bear a huge level of responsibility for this. 

Liberty Delivers a Better World While Utopians Promise a Perfect One

Mises Daily: Wednesday, September 25, 2013 by Gary Galles

Why are unattainable utopian visions attractive and inspirational to so many while the promises of liberty, under which a vastly-improved society can actually be attained, are so often disregarded? Leonard Read, among America’s most prolific defenders of liberty in the 20th century, considered that question.

In Let Freedom Reign, Read argued that liberty’s failure to gain more adherents than utopian statism derived in substantial measure from the fact that the ends envisioned, rather than the means involved, often motivate people. Unlike the utopian visions, the freedom philosophy recognizes that a system of free markets is an “amoral servant” that does not claim to generate no objectionable results to anyone. For this reason, liberty faces an inspirational disadvantage.

A good illustration of utopianism’s “advantage” over freedom is the utopian’s assertion that he can deliver equality of results (implicitly assumed to be equality at a high level of prosperity). This in turn leads to rationalizations for cutting freedom off at the knees. Yet some forms of inequality are inseparable from astounding social benefits, particularly the massive gains from specialization among people with differing abilities and circumstances, coordinated through voluntary market arrangements.

As Read noted in Having My Way, rather than bemoaning any inequality of results, it would be more accurate to say, “inequality exists, fortunately!” as long as it is combined with freedom, which he called our“working handmaiden.”

[F]reedom and equality are ... mutually antagonistic. The equality idea…rests on the antithesis of freedom: raw coercion. It is ... impossible to be free when equality is politically manipulated ...

Not our likenesses, but our differences, give rise to the division of labor and the complex market processes of production and trade ... it is to our advantage to specialize and to trade with other specialists. ... By thus serving others — and becoming ever more skilled and outstanding (unequal) in the process — he best serves his own interest.....To Read More.....