Obama’s Concession to the Right: Liberal Compassion for the Few, Not the Many

posted at 12:15 pm on December 7, 2010 by Howard Portnoy
[ Economics ]   

I’m not willing to see 2 million Americans who stand to lose their unemployment insurance at the end of this month be put in a situation where they might lose their home or their car or suffer some additional economic catastrophe.

So said a petulant-sounding President Obama last night in a news conference in which he outlined the terms of the compromise on Bush-era tax extensions he had struck with Republican leaders and hopes to sell to his Democratic base.

The bottom line is that the tax cuts will be extended for all Americans for two years, in exchange for which taxpayers will pony up another $56 billion to cover 13 additional months of unemployment benefits for a group liberals are fond of referring to oxymoronically as jobless workers.

If the tone of the previous paragraph sounds callous, it is partly because I firmly believe the government is conditioning many of these people to become permanent wards of the state: Give a man a fish, and all that. But it is also because the Democrats’ brand of compassion extends to only about a third of  “jobless workers.” It does not apply to the roughly 4 million out-of-work Americans who don’t quality for unemployment insurance because they are self-employed or hold down other nontraditional jobs.

Howard Rosen, a labor market expert with the Peter G. Peterson Institute for International Economics, has stated that, “[t]he largest group of people that do not qualify for unemployment insurance are the nontraditional employees.” These millions who are not full-time, permanent employees are simply out of luck when it comes to situations where—to borrow the president’s metric for personal financial disaster —“they might lose their home or their car or suffer some additional economic catastrophe.”

The problem resides in the antiquated Social Security Act of 1935, which encouraged states in the midst of the Great Depression to adopt unemployment insurance plans. Because the notion of nontraditional worker back then was virtually nonexistent, the laws were designed to protect only those laid off from full-time jobs.

It was in January of 2009, the same month coincidentally when President Obama passed his near-trillion-dollar American Recovery and Reinvestment Act (aka stimulus plan) that Kathy Lohr of NPR wrote about one nontraditional out-of-work couple who had already begun depleting their savings accounts and retirement plans. Although little has been written about this segment of the population since, try to imagine what life has been like for them in the wake of the failed recovery. Don’t they deserve a fish, too?

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Cross-posted at Libertarian Examiner. Follow me on Twitter or join me at Facebook. You can reach me at howard.portnoy@gmail.com or by posting a comment below.

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