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Sunday morning on the Beltway roundtable circuit

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By Michelle Malkin  •  August 2, 2009 12:28 PM

The nutroots were quite upset with George Stephanopoulos for inviting me on his This Week roundtable. They piled on him on Twitter. And even Paul Krugman tried to stir up lefty ire.

God forbid a non-establishment, non-Beltway-certified “acceptable” conservative have a voice in a mainstream forum!

Unlike Matt Lauer, Stephanopoulos wasn’t compelled to play “beat the clock.” It was four on one, but the discussion was civil, if slightly strained. I appreciated the opportunity to give Culture of Corruption a wider forum.

Allah has vid links here.

On the topics: The panel was dismissive of standard economic arguments against extending unemployment benefits (which I’ve been blogging about since last January, when the Bush administration embraced expanding the entitlement). Cynthia Tucker made the common error of mistaking my simple argument about incentives for some sort of moral judgment.

Question: Where do we draw the line? Laid-off workers can collect up to 79 weeks of unemployment in half the states. Democrats want to extend the benefits another 13 weeks:

Representative Jim McDermott, Democrat of Washington and chairman of the House Subcommittee on Income Security and Family Support, said he would introduce a bill in September to provide yet another 13 weeks of coverage in states with unemployment rates of 9 percent or higher. “Legislators will line up quickly when they start getting calls from desperate constituents,” he said in a telephone interview.

The cost would be $40 billion to $70 billion, but the expense would be temporary, Mr. McDermott said.

Treasury Secretary Geithner told Stephanopoulos the administration is open to such proposals. Well, hell, why not extend the benefits indefinitely?

There is no such thing as a “temporary” entitlement in Washington.

Meanwhile, Geithner is entertaining new taxes on the middle-class. Way to restore confidence and keep Obama’s promises.

There was a brief discussion of Obamacare and I noted the Tea Party groundswell of grass-roots revolts at congressional town halls across the country. The panel balked at my reference to the 1994 Hillarycare debacle — and the turning point in Seattle when Hillary was loudly and openly booed by protesters. But mark my words: Just as the American public turned back the government health care takeover 15 years ago, it will be activist taxpayers uncowed by their ram-it-and-jam-it lawmakers who beat socialized medicine back again this summer.

My bottom line: Obama has vastly overreached on both the redistribution of wealth and the redistribution of health.

I also mentioned health care czar Nancy DeParle’s corporate conflicts of interests and the White House stonewalling on transparency of its meetings with health care executives.

The panel wrapped up with an obligatory discussion of the beer summit/Gates-gate, with the usual teeth-gnashing from Cynthia Tucker about racial profiling and tiptoeing about race from the white male panelists. I countered with a defense of Leon Lashley, the black police officer who was on the scene and defended Sgt. Crowley, and wondered when a healing summit with Sgt. Lashley and 911 caller Lucia Whalen would take place to make amends for the unfair racial smears against them.

As you might expect, there were no expressions of sympathy for them (Al Hunt just stared silently and ignored the point).

They don’t fit the Obama-as-racial healer-narrative.

***

Update: Think Progress reacts - She said “counterinsurgency!”

Yes, I call Tea Party activists counterinsurgents.

Janeane Garafolo, meanwhile, is now calling you “racist backward motherf’ers.”

More reax: Huffpo is beside itself that I quoted a Clinton economist who looked at jobless benefits and the incentives they create.

***

And more:

The NYTimes says the Clinton economist, Lawrence Katz, now says the “temporary” jobless benefits extension could provide a “quick fiscal stimulus.”

But at what cost?

Via Heritage:

The consequences of extended unemployment benefits are some of the most conclusively established results in labor economic research. Extending either the amount or the duration of UI benefits increases the length of time that workers remain unemployed.[1] o UI benefits subsidize unemployment. They reduce the incentive unemployed workers have to search for new work and to make difficult choices–such as moving or switching industries–to begin a new job.
Roughly one-third of workers receiving UI benefits find work immediately once their benefits expire. This happens both when unemployment is high and when unemployment is low.[2]

Economic research shows that extending UI benefits from 26 weeks to 46 weeks increases the average duration of unemployment by approximately three weeks.[3]

Reduces Other Income

Families respond to unemployment benefits by reducing other income. Wives’ earnings fall by between 36 and 73 cents for each dollar of UI benefits married men receive.[4]

Economic Effects

Ineffective Stimulus.

Extended UI benefits are frequently claimed to provide significant economic stimulus.
The studies that come to this conclusion ignore the effect of UI benefits in raising unemployment and incorrectly assume that unemployed households spend every dollar of UI benefits they receive. Empirical studies contradict both of these assumptions.

Heritage Foundation macroeconomic modeling accounting for both these factors show that for each dollar spent extending UI benefits to 46 weeks, GDP expands in the first year by just $0.17. Almost any other use of resources would provide a greater short term boost to the economy.[5]

Higher Unemployment

Heritage Foundation macroeconomic modeling shows that extending UI benefits to 46 weeks has increased the unemployment rate by 0.22 percentage points.[6]

Negligible Wage Effects

Some analysts suggest that extended UI benefits should enable workers to find better jobs and increase their wages when they return to work.

Other analysts suggest that workers skills deteriorate when they are unemployed and, by encouraging longer unemployment, extended benefits will reduce workers wages.

Economic research finds neither effect–extended benefits do not increase or decrease unemployed workers wages when they find new jobs.[7]

James Sherk is Bradley Fellow in Labor Policy in the Center for Data Analysis at The Heritage Foundation.

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