July 6, 2014

Press Won’t Connect End of Jobless Benefits With Faster Job Growth; Krauthammer Does

Fox News contributor and syndicated columnist Charles Krauthammer made a very interesting and logical correlation Friday. The press has predictably failed to make the connection or even to relay Krauthammer’s point, simply because it leads to the default assumption that conservatives were right on an important economic issue.

To be clear, the point Krauthammer and National Review Online’s Robert Stein made on Thursday isn’t directly provable. But the fact that an acceleration in job growth and a significant reduction in the unemployment rate have occurred in the six months since extended unemployment benefits expired is hard to explain away as some kind of lucky coincidence — especially given the endless blather of “weather” excuses the press and the administration have made about the economy in general since early this year. Video and a transcript follow the jump.

Krauthammer also made an excellent point about how you can’t hold the economy — or at least this one — down forever, though heaven knows that the Obama administration, its overzealous regulators, and certain blue state governors have tried (video obtained at Real Clear Politics; bolds are mine):

Transcript (text found at Real Clear Politics has been slightly edited to reflect what Krauthammer actually said):

Look, I think all of this — and I think it is very good news — comes under the headline of, “You can’t keep the American economy down forever.”

You can try to do it with overtaxation. You can try to do it with overregulation. But in the end, the animal spirits of this incredible economy, all the industriousness, all the energy, all the innovation will break through — particularly as we see in the states where there’s a huge increase in employment as a result of the energy explosion. Again, being kept down as much as it can by the federal EPA and by the blue states like New York State.

However, there’s one factor here which I think is overlooked, and you won’t read about it. Rob Stein, the economist, pointed this out in National Review Online. These six months, which Obama heralds as the largest, the fastest growth in jobs in the U.S. since ’99, have coincided with the six months of which we have no longer extended emergency unemployment, long-term unemployment insurance.

Remember at the end of last year, the furious debate the Democrats, the president saying, “If you end this, the sky is going to fall, people won’t go starving, it’s going to increase unemployment”? It’s had precisely the opposite effect.

In these six months, where you ended extended unemployment, and the conservative argument was if you subsidize something, you’ll get more of it, if you stop the subsidy, you’ll lessen it. So these six months coincide with a decrease in the median length of unemployment from 17 weeks to 13 weeks — the largest six-month decline in the length of unemployment ever measured. Which means the real problem of long-term unemployment was a function of this anomaly, emergency extended unemployment, which should never have happened, and whose end has created this — has contributed to — this excellent result. The debate on that extension is over and the conservatives were right.

What follows are a few specifics backing Krauthammer’s contentions.

From December to June, the unemployment rate declined from 6.7 percent to 6.1 percent. Though that percentage-point decline is at the same rate as seen last year (0.1 points per month), it took 38 months for the rate to decline from its peak of 10.0 percent in October 2009 to the 7.9 percent seen at the end of 2012. That’s an average of only 0.055 points per month. It should never be forgotten that the unemployment rate is still well above the 5 percent result the administration predicted would be the case today when the stimulus plan passed in February 2009.

Seasonally adjusted job growth in the past five months has averaged 231,000 per month. The annual averages during the previous three full years were as follows: 194,000 in 2013; 186,000 in 2012; and 174,000 in 2011. This year’s average result thus far, if achieved through all of 2014, would mean about 550,000 more jobs added this year than the annual average of the previous three calendar years.

It’s especially pertinent to note that after exploding by almost 3 million in 2013, the “not in labor force” figure, while still at a record 92.12 million, has increased by only 312,000 during the first six months of 2014.

In the virtual press release disguised as analysis at the Associated Press I reviewed earlier today, the White House — er, Paul Wiseman — didn’t mention the expiration of extended unemployment benefits as a factor partially or fully explaining the uptick in monthly job growth. Of course not; they can’t give any reasoned conservative argument any legitimacy. Too bad, especially given the economy’s first-quarter contraction, there’s no other plausible explanation.

Cross-posted at NewsBusters.org.

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5 Comments

  1. Under current circumstances with millions upon millions of people without a job Krauthammer’s premise is dubious at best. You can’t obtain a job that doesn’t exist and therefore you run out the clock on unemployment benefits regardless. The issue on the personal/individual level is the transition from unemployment benefits to other forms of government assistance, NOT the notion of being paid not to work.

    I will add one caveat to that statement, in so far as job availability, we need to do a better job at getting people to move to places like North Dakota where the oil and gas patch is generating jobs. It doesn’t solve the problem nationally as there aren’t enough jobs in ND and TX to employ everyone who wants a job. However, getting 10s of thousands of people off government assistance is a relief to the tax payer and it has to start somewhere. IF people were to begin moving in masse the entire paradigm of the Democrat Party would collapse as people would escape the command and control structure of their dominance and begin to prosper thus ripping down the facade of “we care” to reveal “we need you poor and voting for us”.

    Fraking is the wedge issue of our times and the GOP has failed to capitalize on it. I would like some Republican group to put up billboards in Chicago, Detroit, NY and LA advertising the prevailing wage in ND of a few positions with the message, “A job has your name on it!” At the bottom of the message it should say, “sponsored by the fraking energy companies of America creating full time jobs.”

    Comment by dscott — July 7, 2014 @ 9:05 am

  2. dscott, I think what has happened is that some of those forced off of unemployment got the low-hangning fruit they ignored while they were still getting the benefits. Probably isn’t a long-term thing, but as I asked someone else, what else could be leading to job growth in a flat-to-contracting economy?

    Comment by Tom — July 7, 2014 @ 10:45 am

  3. #2, We already predicted that answer as the result of ObamaCare, the so called job growth is the conversion of one full time job into 1.5 to 2 part time job. Hence the flat economy.

    As I predicted, the bifurcation of the workforce into a vast majority of part timers being lead by a small cadre of full timers at the helm of companies. The liberal’s version of a full employment economy where government benefits to supplement part time wages only ensure you have enough to survive. The benevolent dictatorship of the enlighted, this is the liberal utopia Obama is heading toward.

    Comment by dscott — July 7, 2014 @ 12:27 pm

  4. #3, I guess I want to see the next two months, b/c June was SO off-track vs. other mos. If the trend continues we really do have bifurcation leading to a Japan-like situation.

    Comment by Tom — July 7, 2014 @ 4:57 pm

  5. #4, maddening isn’t it? Knowing what’s going to happen and being powerless to stop it. Fortunately, the November elections are going to be impacted by the population coming to the full realization of Obama’s policies. By that time the recession is going to bite hard and with several months of unemployment stats fully parsed showing the loss of full time jobs and their replacement with part time jobs the verdict will be plain to see. Add to this the increase in employer sponsored health insurance premiums and the picture of failure and exposed deception is complete.

    It’s too bad the country has to experience the burden of failure by liberals, but then elections have consequences, they voted for liberals to control the country. This is a Republic and you deserve the government you get. Maybe this time they will learn, not holding my breathe.

    We saw this coming Tom, we all saw this coming…even Democrats, that’s why they voted they way they did when the GOP attempted to blunt the effects of ObamaCare. The Democrats hoped as the GOP feared that ObamaCare would become the new entitlement program being irreversible with the poor sucking the money out of the middle class under the guise of NOT raising taxes. Which brings us to the reduced hourly definition of full time work, Democrats knew the result of that change, making more poor people (their constituency) by knocking them out of the middle class. It was their plan to turn the country blue in creating a permanent underclass by decimating the middle class. Majority Rules! In an Orwellian sop to the underclass, Democrats determined to completely relax the rules on government benefits as Obama has done to allow the part timers to get those benefits to make up the difference. Now you see Obama attempting to flood the country with illegals, all poor and all potential Democrat voters.

    ObamaCare was never about health care, it was about power, nothing more. Through ObamaCare, Obama has set the precedence of suspending laws via executive action/ non-enforcement just like he did with immigration laws. Who has legally challenged him over this? Boehner’s attempt to sue may well determine if the government the Founders created will survive in any form. If the SCOTUS says Boehner or the House doesn’t have standing then game over, meaning Obama without consequence can and will rule via executive power using “discretion” to arbitrarily enforce laws to his whim. Via the EPA he has set the precedent of regulatory law, and thus he doesn’t need the legislature any more as he has de facto rule by executive order. Only the poor whose numbers would be greater than all other voting blocks in election cycles would determine the outcome of any election. Given the unending promises that can be made and the unlimited power of taxation those promises will be kept. Corrupt politicians know the poor can not refuse a Faustian Bargain when offered, thus ensuring their slavery and the corrupt politicians grip on power. Why else do you think Huey Long was so popular in Louisiana?

    Comment by dscott — July 8, 2014 @ 8:31 am

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