Krauthammer: If you subsidize apples, you get more apples. If you subsidize unemployment…

posted at 2:01 pm on January 7, 2014 by Erika Johnsen

It seems to be a truth only very selectively acknowledged that, when you tax something, you’ll end up with less of it (the corollary being that, if you subsidize something, you’ll get more of it). Progressives seem perfectly capable of recognizing this truth in the context of sin taxes and green-energy subsidies, yet when it comes to things like the extension of unemployment benefits that is making its way through the Senate at the moment, they seem to think that such policies are immune from the most basic of economics. That’s the point that Charles Krauthammer made last night, pointing out that the White House and the Democrats are touting the full-blown awesomeness of their ongoing economic “recovery” and the accompanying job creation out of one side of their mouths while grandstanding about the need for further unemployment benefits out of the other — but the reality is that today’s unemployment rate of around seven percent actually looks a lot more like eleven percent if you use the same labor force participation rate of just a few years ago, and the Democrats keep approaching the systemic problem with the same old-and-tired non-solutions that are practically good for little else than browbeating Republicans. Via RCP:

The core issue is creating an entitlement. This has never been considered an entitlement. And you go down this road, Sperling says now is not the time. Four and a half years into a recovery, at least as defined by the administration itself, is not the time? If not now, then when? I mean, what we’re going to end up with is an European level of unemployment, chronic unemployment subsidized. And the fact is, if you subsidize apples, you get more apples; if you subsidize unemployment, you get more of it. And that’s what the economics study shows. It’s not that people are lazy. It shows that if you have unemployment insurance, then you can make choices which would allow you to turn down a job that perhaps isn’t exactly what you want. The vast majority of the unemployed want a job, and the problem is the state of the economy.


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…don’t need to go to an Ivy League school to figure that out Chuck!

KOOLAID2 on January 7, 2014 at 2:09 PM

This has never been considered an entitlement. And you go down this road, Sperling says now is not the time. Four and a half years into a recovery, at least as defined by the administration itself, is not the time? If not now, then when? I mean, what we’re going to end up with is an European level of unemployment, chronic unemployment subsidized.

…start pounding on the ECONOMY STUPID!

KOOLAID2 on January 7, 2014 at 2:10 PM

Apples…mmmmm :o)

BlaxPac on January 7, 2014 at 2:11 PM

That’s why we should get rid of welfare and susidize employment. A dollar tax credit for every dollar you earn.

Mormontheman on January 7, 2014 at 2:12 PM

The GOP isn’t going to fight on this hill, it’s simply too tall and the rocks…man, those rocks…they make for some unsure footing.

See that hill over there? No, you blazing idiot not that one, the one waaaaaay off in the distance which concerns funding for repaving a government service road at Mt. Rushmore. See it now? The GOP is going to stand firm and refuse to provide the $300k in funding to repave that road.

You’re welcome!

Bishop on January 7, 2014 at 2:14 PM

Democrats keep approaching the systemic problem with the same old-and-tired non-solutions that are practically good for little else than browbeating Republicans.

And it works because most Americans are economic illiterates and extending unemployment makes them feel good.

Charlemagne on January 7, 2014 at 2:18 PM

This “temporary” program has been around for years. When does it become permenant?

Put another way, how soon do the surrender weasels lecture us that this needs to pass to keep the focus on Obamacare? Then the same treatment for amnesty. Then for legitimizing same-sex marriage or whatever the hell else the Dems demand……. gotta keep the focus on Obamacare.

Happy Nomad on January 7, 2014 at 2:18 PM

The GOP don’t even have to try very hard to counter the Dems’ argument on this one. If we’re in a recovery, what the hell do we need an emergency extension of unemployment benefits for? And if 4 1/2 years into this alleged recovery, it’s still not safe to end this program, when will it be? No Democrat can answer that without lying through their teeth.

Doughboy on January 7, 2014 at 2:20 PM

If we make unemployment benefits go on forever, then we can get the discouraged workers back on the rolls and we might actually get a more realistic unemployment number. And then use that to hammer the statists.

This theory is all well and good except for the fact that the statists are in control of both parties, so who cares.

besser tot als rot on January 7, 2014 at 2:22 PM

When your policies are killing businesses unemployment needs to be extended. All business growth ended the day that Marxist moron was sworn in.

DeweyWins on January 7, 2014 at 2:23 PM

And, seriously, I’m sick of this small ball garbage. The GOP takes a tough stand on unemployment, but pushes through a tax and spend bill that is going to bankrupt and destroy this country? Yeah, thanks for putting on a totally meaningless show guys.

besser tot als rot on January 7, 2014 at 2:25 PM

The GOP don’t even have to try very hard to counter the Dems’ argument on this one. If we’re in a recovery, what the hell do we need an emergency extension of unemployment benefits for?

Doughboy on January 7, 2014 at 2:20 PM

Dem Response: Because the recovery is “fragile.”

Ending unemployment would be the excuse for any economic downturn for the next two years.

Happy Nomad on January 7, 2014 at 2:27 PM

Cut benefits to a level where all you can afford is to rent a room shared with 10 other guys and a can of beans for food every day. And let them last forever. Then your safety net is there, but you’re only going to use it if you absolutely have to.

besser tot als rot on January 7, 2014 at 2:28 PM

The GOP takes a tough stand on unemployment, but pushes through a tax and spend bill that is going to bankrupt and destroy this country? Yeah, thanks for putting on a totally meaningless show guys.

besser tot als rot on January 7, 2014 at 2:25 PM

Yeah, they ignore the cost of extending unemployment even as they crow over killing off military retirements.

Happy Nomad on January 7, 2014 at 2:28 PM

It seems to be a truth only very selectively acknowledged that, when you tax something, you’ll end up with less of it (the corollary being that, if you subsidize something, you’ll get more of it).

I don’t think you’re applying that principle correctly here. “Subsidization” will only increase unemployment if, as a result, one can make more money via unemployment payments than through paid work (of course, subtracting the cost of being employed from the payments one would receive for working, and subtracting the reputational cost associated with being on the public dole from the unemployment payments one would receive). Otherwise, given the choice (and even if unemployment is “subsidized”) people will still choose to work as they can make more money by doing so, and without the social stigma associated with receiving unemployment.

Grossly simplified, I make more money at my job than I would on unemployment. So I choose to work.

righty45 on January 7, 2014 at 2:30 PM

Ending unemployment would be the excuse for any economic downturn for the next two years.

Happy Nomad on January 7, 2014 at 2:27 PM

The the GOP pols are incapable of rebutting idiotic Democrat arguments, then they should resign in shame. (And, yes, they are and they should.)

besser tot als rot on January 7, 2014 at 2:30 PM

Progressives seem perfectly capable of recognizing this truth in the context of…

Truth is irrelevant to lefties; it’s just a word they use that seems to mean something to the peons. All that matters is that you learn to love Big Brother.

Fenris on January 7, 2014 at 2:30 PM

Welfare, more welfare

Mooching, more mooching

Modern day plantations, more modern day plantations

Dependency, more dependency

Pavlov

obama loves his people enslaved.

Schadenfreude on January 7, 2014 at 2:30 PM

Yeah, they ignore the cost of extending unemployment even as they crow over killing off military retirements.

Happy Nomad on January 7, 2014 at 2:28 PM

One of the only things the federal government should actually be spending money on.

besser tot als rot on January 7, 2014 at 2:31 PM

Colts of IN is the ultimate traitor.

Schadenfreude on January 7, 2014 at 2:31 PM

Progressives seem perfectly capable of recognizing this truth in the context of sin taxes and green-energy subsidies, yet when it comes to things like the extension of unemployment benefits that is making its way through the Senate at the moment, they seem to think that such policies are immune from the most basic of economics.

You and Krauthammer are making a very big and dangerous assumption. Lieberals want more unemployment because that means more people hooked on Hugh Gubmint.

Steve Eggleston on January 7, 2014 at 2:33 PM

Can’t stand this oafish arrogant buffoon, but on this he’s right.

Schadenfreude on January 7, 2014 at 2:33 PM

Dem Response: Because the recovery is “fragile.”

Ending unemployment would be the excuse for any economic downturn for the next two years.

Happy Nomad on January 7, 2014 at 2:27 PM

If the Republicans in Congress are so inept that they can’t offer up their own reasons(5+ years of Obamanomics, Obamacare, raising taxes, trillion dollar annual deficits, the Fed printing money), then they don’t deserve to be in power.

Doughboy on January 7, 2014 at 2:34 PM

The GOP isn’t going to fight on this hill, it’s simply too tall and the rocks…man, those rocks…they make for some unsure footing.

See that hill over there? No, you blazing idiot not that one, the one waaaaaay off in the distance which concerns funding for repaving a government service road at Mt. Rushmore. See it now? The GOP is going to stand firm and refuse to provide the $300k in funding to repave that road.

You’re welcome!

Bishop on January 7, 2014 at 2:14 PM

Right. That’s because the GOP is dead, and the illusion of two parties covers up the fact that there is actually one, and then a few rogue elements on either side of the median.

KMC1 on January 7, 2014 at 2:34 PM

We have that situation in the area of West Texas I’m in, which in the past has been on the edge of the oilfield, but with the improvement in fracking technology is now right in the middle of it. Oilfield companies and other businesses can’t find enough workers to go around, but since the area in the past was plagued by chronic unemployment — to the point that some people are comfortable with the situation — the local jobless rate not only remains above the state average, it’s higher than the national unemployment rate (or at least the one being touted by the Labor Department).

SB 21, passed by the Texas Legislature and signed by Rick Perry last spring, takes effect starting on Feb. 1, and requires those getting unemployment benefits to undergo drug testing. We’ll see what effect that has on the local jobless rate, which may not get close to the record-low levels if Midland, but should at least be lower than the national average.

jon1979 on January 7, 2014 at 2:36 PM

The GOP takes a tough stand on unemployment, but pushes through a tax and spend bill that is going to bankrupt and destroy this country? Yeah, thanks for putting on a totally meaningless show guys.

besser tot als rot on January 7, 2014 at 2:25 PM

It’s my theme of the day, but you’re making a very big and dangerous assumption. Bo(eh)ner is good with perma-73-week funemployment, and the “tough stand” is nothing more than a totally meaningless show designed to fool the few conservatives that haven’t discovered that the GOP El PRL is really the DemocRAT Party circa 1978.

Steve Eggleston on January 7, 2014 at 2:36 PM

You and Krauthammer are making a very big and dangerous assumption. Lieberals want more unemployment because that means more people hooked on Hugh Gubmint.

Steve Eggleston on January 7, 2014 at 2:33 PM

It’s more than that! Dems need more unemployment because it masks just what 7.5% unemployment looks like. Especially with an expanding number of Americans in the U-6 category and rising numbers of Americans that simply are not looking for work anymore. Addicting people to welfare is merely a side benefit.

Happy Nomad on January 7, 2014 at 2:44 PM

and the Democrats keep approaching the systemic problem with the same old-and-tired non-solutions that are practically good for little else than browbeating Republicans.

Well, duh. That’s the *primary* reason for it. Like Obamacare isn’t about healthcare, it’s about control.

Look, if they actually *cared* about unemployment or the unemployed, they wouldn’t aggressively pursue actions they pursue which *cause* unemployment; they wouldn’t aggressively do things to make citizens further dependent upon the state, etc.

Seriously, do we not get this yet?

Midas on January 7, 2014 at 2:49 PM

Is this the same Krauthammer who was calling for an increase in the minimum wage last week?

xblade on January 7, 2014 at 2:53 PM

Bingo!

sadatoni on January 7, 2014 at 2:59 PM

See that hill over there? No, you blazing idiot not that one, the one waaaaaay off in the distance which concerns funding for repaving a government service road at Mt. Rushmore. See it now? The GOP is going to stand firm and refuse to provide the $300k in funding to repave that road.

You’re welcome!

Bishop on January 7, 2014 at 2:14 PM

Well, at least until the Democrats start shrieking that Republicans don’t care about the safety of government employees servicing Mt. Rushmore, then they’ll agree to the repaving and it will cost $1.2 million.

Kafir on January 7, 2014 at 3:03 PM

See that hill over there? No, you blazing idiot not that one, the one waaaaaay off in the distance which concerns funding for repaving a government service road at Mt. Rushmore. See it now? The GOP is going to stand firm and refuse to provide the $300k in funding to repave that road.

You’re welcome!

Bishop on January 7, 2014 at 2:14 PM

Near-future El PRL communique – “We can’t make it to that hill unless the road is paved.”

Steve Eggleston on January 7, 2014 at 3:16 PM

It’s my theme of the day, but you’re making a very big and dangerous assumption. Bo(eh)ner is good with perma-73-week funemployment, and the “tough stand” is nothing more than a totally meaningless show designed to fool the few conservatives that haven’t discovered that the GOP El PRL is really the DemocRAT Party circa 1978.

Steve Eggleston on January 7, 2014 at 2:36 PM

Yeah, I know that the tough stand is fake. But, even taking it at face value, it is meaningless – a small drop in the bucket compared to the disaster that they have wrought. That’s all I’m saying.

besser tot als rot on January 7, 2014 at 3:20 PM

Schadenfreude on January 7, 2014 at 2:30 PM

Basic physics (my favorite is Newton’s 3rd law). When it comes to unemployment vs. getting a job, it is “path of least resistance”.

The Prez today said that he had never encountered anybody that preferred “money for nothing” (a song banned in Canada btw) over having a job.

#1, who is going to admit that if they want to keep the gravy train going?

#2 I can introduce him to several people that probably voted for him but subscribe to #1…let me introduce my brother for example).

teejk on January 7, 2014 at 3:36 PM

Unemployment lets the unemployed put off hard decisions that often lead to being re-employed. If you live in Michigan, but the house is paid for, do you sell the house and move to Texas? Do you send the husband over to find a job in the Marcellus Shale area, sending money home? Do you pack everybody up and go to Aunt Prunella’s in Florida? As long as you collect unemployment, these hard decisions are postponed.

Sekhmet on January 7, 2014 at 3:42 PM

…the Democrats keep approaching the systemic problem with the same old-and-tired non-solutions that are practically good for little else than browbeating Republicans.

Yes, and as a drug addict will do anything, tell any lie, and hurt anyone to get their next fix, a Democrat will do anything, tell any lie, and hurt anyone to get their next hit of political power.

Democrats portraying Republicans as uncaring monsters is such a perversion of truth that it is nauseating.

drunyan8315 on January 7, 2014 at 3:48 PM

Here in CA I have heard so many times from laid off people, “Guess I’ll take a little time off and then start looking.”

It’s a crutch. If I were a conservative governor, I would start benefits six months after you get laid off, not right away. That will spur people on to start looking.

PattyJ on January 7, 2014 at 5:26 PM

Unemployment lets the unemployed put off hard decisions that often lead to being re-employed. If you live in Michigan, but the house is paid for, do you sell the house and move to Texas? Do you send the husband over to find a job in the Marcellus Shale area, sending money home? Do you pack everybody up and go to Aunt Prunella’s in Florida? As long as you collect unemployment, these hard decisions are postponed.

Sekhmet on January 7, 2014 at 3:42 PM

But what if you are unemployed, your job was outsourced to India and isn’t coming back, the house is not paid for and your mortgage is still underwater, your wife has a decent job with benefits, and you have 3 kids in a good school? What if you are an accountant or an actuary and you are 55 years old? Are you really going to go work in an oil field? Is it realistic for the rest of us to expect you to?

rockmom on January 7, 2014 at 5:28 PM

Here in CA I have heard so many times from laid off people, “Guess I’ll take a little time off and then start looking.”

It’s a crutch. If I were a conservative governor, I would start benefits six months after you get laid off, not right away. That will spur people on to start looking.

PattyJ on January 7, 2014 at 5:26 PM

I don’t know about Califorina, but in PA you can’t get UE benefits until all your severance pay has run out. Most people who have had a job long enough to qualify for UE get some severance when they are laid off. And for most white collar people who are the longest-term unemployed, the weekly check is way less than what they earned in their job and not enough to really live on. But it can be enough to stave off bankruptcy or force a short sale of the home.

Also in PA if you are on extended UE you have to prove you are looking for a job, meaning you have to show a case worker that you have applied for at least two jobs every week and you cannot turn down an interview or a job offer.

I think a lot of people here are confusing basic UE with the extended benefits program that is under consideration here.

What would really be a good reform would be to allow people to collect 26 weeks of UE in a lump sum they could use to pay off debt or start a business, or buy home office equipment so they could start consulting. This would help a lot of the white-collar unemployed more than a small check each week.

rockmom on January 7, 2014 at 5:33 PM

It’s nice to hear it said so plainly and openly. Subsidizing and supporting anything also makes it more common and often more expensive per unit in the long run.

Subsidizing home loans, student loans, health insurance, cane sugar, ethanol, bio-diesel, electric cars, wind farms, retirement savings, unemployment, food stamps, and imprudent sexual activity. Anything that reduces the cost, increases the demand.

And anything that increases demand increases the price.

flicker on January 7, 2014 at 6:22 PM

I know a guy in MD who was on unemployment for a year and a half and looked on getting looking for a job as a major hinderance. His last year or so was entirely taking weekly government-subsidized classes in how to start a small business, and because of this he didn’t have to look for work, either.

But like all subsidized past-times, he wasn’t really motivated, and when his classes ended and his UE ran out, he never did start a business, he just started couch surfing and dreaming.

It was a total waste of tax-payers’ money.

flicker on January 7, 2014 at 6:30 PM

The core issue is creating an entitlement.

I see what you did there.

PantsDailyon on January 7, 2014 at 9:14 PM