A Civil Society Extends Unemployment Benefits
Robert Reich begins: "I have the questionable distinction of appearing on Larry Kudlow’s CNBC program several times a week, arguing with people whose positions under normal circumstances would get no serious attention, and defending policies I would have thought so clearly and obviously defensible they should need no justification."
Portrait, Robert Reich, 08/16/09. (photo: Perian Flaherty)
A Civil Society Extends Unemployment Benefits
31 August 10
have the questionable distinction of appearing on Larry Kudlow's CNBC program several times a week, arguing with people whose positions under normal circumstances would get no serious attention, and defending policies I would have thought so clearly and obviously defensible they should need no justification. But we are living through strange times. The economy is so bad that the social fabric is coming undone, and what used to be merely weird economic theories have become debatable public policies.
Tonight it was Harvard Professor Robert Barro, who opined in today's Wall Street Journal that America's high rate of long-term unemployment is the consequence rather than the cause of today's extended unemployment insurance benefits.
In theory, Barro is correct. If people who lose their jobs receive generous unemployment benefits they might stay unemployed longer than if they got nothing. But that's hardly a reason to jettison unemployment benefits or turn our backs on millions of Americans who through no fault of their own remain jobless in the worst economy since the Great Depression.
Yet moral hazard lurks in every conservative brain. It's also true that if we got rid of lifeguards and let more swimmers drown, fewer people would venture into the water. And if we got rid of fire departments and more houses burnt to the ground, fewer people would use stoves. A civil society is not based on the principle of tough love.
In point of fact, most states provide unemployment benefits that are only a fraction of the wages and benefits people lost when their jobs disappeared. Indeed, fewer than 40 percent of the unemployed in most states are even eligible for benefits, because states require applicants have been in full-time jobs for at least three to five years. This often rules out a majority of those who are jobless - because they've moved from job to job, or have held a number of part-time jobs.
So it's hard to make the case that many of the unemployed have chosen to remain jobless and collect unemployment benefits rather than work.
Anyone who bothered to step into the real world would see the absurdity of Barro's position. Right now, there are roughly five applicants for every job opening in America. If the job requires relatively few skills, hundreds of applicants line up for it. The Bureau of Labor Statistics says 15 percent of people without college degrees are jobless today; that's not counting large numbers too discouraged even to look for work.
Barro argues the rate of unemployment in this Great Jobs Recession is comparable to what it was in the 1981-82 recession, but the rate of long-term unemployed then was nowhere as high as it is now. He concludes this is because unemployment benefits didn't last nearly as long in 1981 and 82 as it they do now.
He fails to see - or disclose - that the 81-82 recession was far more benign than this one, and over far sooner. It was caused by Paul Volcker and the Fed yanking up interest rates to break the back of inflation - and overshooting. When they pulled interest rates down again, the economy shot back to life.
The Great Jobs Recession is far more severe. It's continuing far longer. It was caused by the bursting of a giant housing bubble, abetted by the excesses of Wall Street. Home values are still 20 to 30 percent below where they were in 1997. The Fed is powerless because consumers cannot and will not buy enough to bring the economy back to life.
A record number of Americans is unemployed for a record length of time. This is a national tragedy. It is to the nation's credit that many are receiving unemployment benefits. This is good not only for them and their families but also for the economy as a whole, because it allows them to spend and thereby keep others in jobs. That a noted professor would argue against this is obscene.
Open Article On Originating Site
Robert Reich is Professor of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He has written twelve books, including "The Work of Nations," "Locked in the Cabinet," and his most recent book, "Supercapitalism." His "Marketplace" commentaries can be found on publicradio.com and iTunes.
|
THE NEW STREAMLINED RSN LOGIN PROCESS: Register once, then login and you are ready to comment. All you need is a Username and a Password of your choosing and you are free to comment whenever you like! Welcome to the Reader Supported News community. |
 19 May 2012
|
 18 May 2012
|
 18 May 2012
|
 19 May 2012
|
 19 May 2012
|
 19 May 2012
|
 20 May 2012
|
 20 May 2012
|
 20 May 2012
|
Comments
We are concerned about a recent drift towards vitriol in the RSN Reader comments section. There is a fine line between moderation and censorship. No one likes a harsh or confrontational forum atmosphere. At the same time everyone wants to be able to express themselves freely. We'll start by encouraging good judgment. If that doesn't work we'll have to ramp up the moderation.
General guidelines: Avoid personal attacks on other forum members; Avoid remarks that are ethnically derogatory; Do not advocate violence, or any illegal activity.
Remember that making the world better begins with responsible action.
- The RSN Team
You are right, Mr. Allen. Now think about it, the Republican Way is an elegant way: Do nothing for the poor and elderly, and they will wither away sooner. Nobody will be responsible for anything. Society can eliminate the problematic parts of the population without much ado. It is an easy answer to difficult questions- the Republican Kind of Answer!
Oh so wrong - on every count - the current recession was caused by "globalization," that is tariff and tax policy that not only allowed, but encouraged the move of job markets to 3rd world countries where labor was cheap. Our jobs did not disappear, they moved. Consumers are spending and creating tremendous job growth - in China, India etc. The housing and credit bubble hid it for many years as people used their houses and credit lines (instead of wages) to make it seem like things were on track - when the credit dried up, the economy crashed to where it has really been for close to a decade. The economy won't get better until the real problem is fixed.
The Social Contract has been abandoned by these non-patriotic mega-corporations who are loyal only to their stockholders and money-grubbing CEOs.
It sound like the joke from the 1964 campaign: "If you had any gumption, you'd go inherit a department store, like Mr. Goldwater!"
You are absolutely correct. I have done considerable research lately and simply wish to confirm that by my review of scholarly, peer reviewed journals, and of the Presidential Annual Report over the last three decades, our current reality reflects the removal of our manufacturing base, and of a variety of jobs, to third world sites. We are pauperized by forcing the American worker to compete with peasant labor. Unfortunately for far too long, the middle class has tried to maintain its there to fore earned standard of living on debt and much to the encouragement of the very financial systems that have profited handsomely at our expense. Add to this a crippling corporate welfare system, a deliberate inflating of the real estate market and destructive deregulation and you get what we have now. The public needs to understand that the masses did not cause this crisis. It was a system designed to bleed them dry and then abandon them.
Please learn the truth about academia: professors are as influenced by popular movements, propaganda, and the media as everyone else. They simply wrap it up in rational discussion and reasoned essays.
Remember the "Clash of Civilizations" author was esteemed professor Samuel Huntington of Harvard. Just because they are from academia doesn't mean that they espouse the truth. Many conservative and liberal professors believe that the public must be kept in the dark because we can't handle the truth. And yet these same professors will teach students about the lies that America has foisted on its unfortunate citizens. It is the belief in the use of misinformation that characterizes conservative academics like Huntington (a registered Democrat, by the way)
And yes, more than a few professors are more than willing to abuse their discipline, even becoming paid hacks and shills on behalf of sources that no academic would have thought to touch in my earlier years. It's not that I am an old man, but returning to academia in my later years has been quite shocking.
Mr. Riech might also have pointed out that one of the reasons so many people without a college degree are unemployed is that so many of the people with a college degree have taken a job that does not require a degree. Many recent college graduates can't find a job in their chosen field so they take any job to survive. (What fun it must be to drive a truck or flip burgers with tens of thousands of dollars in student loans hanging over you!)
The reality is - if you don't stand with the Democrats and vote for every Democrat you can, then the Republicans will win, take control again and continue to ruin our country far faster and far worse then anything the Democrats would do.
Voting for anybody else is voting for the Republicans. That's how we ended up with Bush! Not voting at all is STILL a vote for the Republicans.
If you’re disappointed now, how disappointed will you be when the Republicans win.
VOTE!!! Tell your friends that voted for Obama to VOTE. WE MUST VOTE!!!
WE NEED MORE SEATS NOT LESS!!!
We are running out of time, stop criticizing. Get on board.
The Dems make mistakes, the Republicans make disaster!
Use your brain to get Obama voters to vote for all their Dems. Face the reality, we have to make what we have work otherwise it’s back to the Republicans making more disaster for the middle class and the country.
Let's not assume that all the "Me Firsters" are Republicans, either. BOTH these "two" parties we are allowed to choose between are the Problem, rather than the Solution to what ails America.
The Dems are already gearing up for the elections with their usual 'selling point'--"Well...at least we're not as bad as the other guys." Why do we let ourselves be terrorized into voting for lousy candidates just because we have only "two" choices? Even people who call themselves "progressives" recite this mantra every election cycle--"If the Dems lose, the sky will fall!" Stop letting them get away with this! VOTE 3rd-party (Green, Progressive, Labor...whatever); serve notice that we (whom Rahm Emanuel calls "f___ing retards") are sick of being 'chumped'.
This is NO WAY to run a "democracy"
I voted for Nader and got what I deserved....
I am sorry and I apologize. Never again will I forget that we have ONLY 2 choices, Any other dream is just folly !
And anyone who voted for Obama needs to get out and vote regardless if they are disappointed or not. They will be a lot more disappointed if the Republicans win and screw our country even more.
1) The longer it takes to recover, the more likely that Democrats won't be credited with the recovery;
2) The corporations that are big enough are loving it! Their competition is dying, not because of a better product, only because of corporation size.
3) The media is fetish-izing over the economy like it is God, and the poor, middle class, and other non-rich just don't matter in this country.
The writing has been on the walls and the citizenry of this country still believe that the Wealthy will provide well for them to co-exist among the Greedy.
irst 2 year period. That is probably more than any period in the past many many years. We cannot let the GOP win either house. If they do, the first thing they will do is go back to when Newt Gingrich was the Speaker of the House, and that was SHUT DOWN THE GOVT. THAT MEANS ALL ACTIVITY WILL CEASE, ALONG WITH NO SOCIAL SECURITY BENEFITS BEEN DONE, AND ALL GOVT WORKERS STAYING AT HOME. Can anyone imagine what what that means to millions of Senior Citizens who depend on the Social Securityh checks each month just in order to exist???? It will be a DISASTER...
RSS feed for comments to this post.