One would think that the GOP would learn from one idiotic mistake. But when you're a dinosaur incapable of adaptation to your environment and stupid to boot, learning from past mistakes is our of the question. But then again, one has to ask, "Are these really honest mistakes or just evidence of the very backward nature of this ideologically atavistic organization?" The answer should be obvious to any sentient being.
In 2012, an election year no less, Republican candidate Mitt Romney insulted nearly half the population of the country he wanted to govern by candidly stating that about 47% of us are lazy slugs who expect handouts, contribute nothing to society and are too stupid to act responsibly! Wow, that's about 150 million Americans!! That's quite a few slugs for one country if you ask me! Here's the full quote;
"There are 47 percent of the people who will vote for the president no matter what. All right, there are 47 percent who are with him, who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it. That that's an entitlement. And the government should give it to them. And they will vote for this president no matter what… These are people who pay no income tax..."[M]y job is not to worry about those people. I'll never convince them they should take personal responsibility and care for their lives."
Not to be outdone, John Boehner recently socked it to the working poor-whom we've been told are about a third of the country's households since 34% of America's households in 2010 earned at or below 200% of the federal poverty line-when he stated that the poor had the "sick idea" that it is better to sit around doing nothing than work. Here is the exact quote;
"...this idea that has been born, maybe out of the economy over the last couple years, that you know, I really don't have to work. I don't really want to do this. I think I'd rather just sit around. This is a very sick idea for our country."
He also seemed to blame this idea in large part on the stagnant economy of the last few years implying that somehow Obama was to blame. If this was the intent of his statement it is dead wrong; unemployment has been dropping like a stone as job creation, especially over the past year or so, has been at record levels!
It should be noted that the official unemployment rate is now about 5.5% (mainstream economists tell us six percent is the Non-inflation accelerating rate of unemployment) and that non-farm payroll employment went from a post-crash nadir of 129.7 million in January 2010 to over 141 million as of the first quarter of this year! All of this debunks the GOP mythology positing millions of slugs awaiting their handouts with the "sick idea" that they're entitled to tons of government provided free stuff! Not only have we regained the nearly nine million jobs lost by Bush but we've added another three million in the process bringing the official unemployment rate down to near the pre-recession level. All of this is no thanks to obstructive Republican stalwarts in Congress like Boehner who've made no legislative contribution whatsoever to job creation since 2009.
From September 2011 to late 2012, the Republicans stubbornly obstructed Obama's jobs bill known as the American Jobs Act which had a cost of under $450 billion consisting of direct fiscal stimulus spending, tax credits for workers and employers and aid to states and municipalities to prevent the layoffs of public sector workers who jobs are highly stimulating to the economy itself. Moody's analytical, whose estimates were conservative among the private studies, concluded that the bill's passage would have added nearly two million jobs to the economy and increased GDP growth by about two percent.
Now one of the biggest outrages coming from the GOP these days, and one that is connected to Boehner's hypocritical rant, is that job creation in FY2014 was due to the GOP cuts in unemployment benefits. Oh those lazy unemployed workers! Why work for a living wage when you can sit home for a whopping $300/week? I hope people remember these insults in 2016. The idea that shortening UI benefit duration results in greater employment and job seeking is highly flawed. As CEPR economist Dean Baker notes using Local Area Unemployment Statistics (LAUS) data, as the much cited NBER study did, produces highly flawed results not least of all because, the household surveys NBER used based the employment data on where people lived while Unemployment Insurance is based upon where someone works. Thus, the data is necessarily misleading and the conclusions inaccurate. The problem is that the NBER researchers reached their conclusion by comparing the 2014 employment growth of adjacent counties in separate states, since the federal unemployment insurance program that expired in December 2013 offered different durations of benefits depending on a state's unemployment rate. The NBER staff concluded that since many counties in states that had benefit durations cut saw higher employment growth erroneously concluded that benefit cuts were the operative factor. But since so many people work across state lines the data and conclusions are highly skewed if not meaningless. In the much touted cases of North and South Carolina, where the latter cut benefits while the former did not, South Carolina actually experienced better employment growth than her northern neighbor during 2014. This was a very high profile case that called the whole NBER study into serious question.
It is also the case that states hit the hardest by the recession made the most drastic changes in UI benefits. Since economists tell us that these are the very states that recover the quickest anyway-"since economies tend to bounce back harder the farther they've fallen"-the NBER study was most likely measuring the effects of the economic recovery rather than the supposed effects of adjustments to the UI benefit rules for those states. Finally, one of the coauthors of the study, Kurt Mitman, said that the conclusions were misinterpreted by politicians and pundits alike. His point was not that people just sit home because they're happy with the UI benefits. They're always actively looking for work. It's just that they're much less desperate and so they can be more selective taking only those jobs that pay closer to a living wage. According to Mitman, it wasn't workers who gave up on finding employment but rather employers who found that they had to pay better wages in order to bring in new hires.
One of the most thorough studies, that done by the Economic Policy Institute claims that there was negligible changes to labor market conditions where states experienced the sharpest duration cuts to UI benefits after 2013. The EPI study simply compared changes in the employment to population ratio of prime age workers (25 to 54) before and after policy changes went into effect in each state. They concluded that, A summary of the evidence is that there is very little sign that these duration cuts improved states’ labor markets. One reason was that, "All of the cuts to state UI duration went into effect after the national labor market was already showing signs of improvement, which makes it difficult to distinguish the effect of changes in UI duration from ongoing macroeconomic trends." In other words, the workers affected were busy searching for jobs anyhow and just happen to find them as changes to UI durations were going into effect. If there was ever a good example of the post hoc ergo propter hoc logical fallacy this is it!
The point is that according to the BLS non-farm payroll employment has been growing at a very robust pace by historical standards since 2010, especially considering the depths of the Great Recession and the financial crash that added further challenges to the recent economic recovery. Between January 2013 and January 2014, non-farm payroll employment rose from roughly 135.3 million to 137.5 million, an increase of 2.2 million jobs. Since January of 2014, according to the same graph, we've had another nearly three million jobs created to reach about 140.6 million at the start of 2015. Since the nadir in the first quarter of 2010, we've seen non-farm payroll employment increase by nearly 11.5 million jobs. For the first 48 months of the 60+month recovery-or about 80% of it-we've had UI benefits including an extension for much of the time to help the long term unemployed whose share of the total unemployed has grown to unprecedented levels-a peak of 45% in September 2011-and, according to a recent Brookings Study, "...still exceeds its previous peak reached in 1981-82, and is well above its average in the last recovery..." which was about one quarter according to the same source. Clearly, ending UI benefits was not the main spur to the recovery. In all likelihood, UI benefits helped achieve most of it.
In a much cited paper by Alan Blinder and Mark Zandi in the July 2010 on the efficacy of various economic stimulus efforts, measured as the ratio of increase in GDP for every increase in spending/tax cuts over the course of a fiscal year, Unemployment Insurance has a 1.61 ratio, which is third behind temporary work share programs (1.74) and food stamps (1.69). In another paper from February 2012, Zandi explained the efficacy of UI benefit extensions during recessions;
There was arguably no more effective form of government support during the recession than the emergency UI benefits provided to workers. Emergency UI provides an especially large economic boost, as financially stressed unemployed workers spend any benefits they receive quickly. With few other resources, UI benefits are spent and not saved. The multiplier from a payroll tax cut, while sizable, is smaller since some of the benefit is saved or not spent quickly, particularly the portion going to higher-income households.
One 2010 paper from the CBO asserts that Unemployment Insurance, “...adds to overall demand and raises employment over what it otherwise would have been during periods of economic weakness.” It should thus never be considered the cause of high rates of unemployment. The very idea that the Republicans would even consider cutting UI benefits, as they did, during one of the worst recessions we've ever experienced shows how out of touch and inhumane they really are. Despite a robust recovery-considering all the obstruction-we still suffer from chronic stagnation as evidenced by the persistence of high long term unemployment which is more an indicator of structural weaknesses in the US economy such as high income concentration, chronically low effective demand and regular rates of job flight overseas despite low effective rates of federal income taxation on transnational corporations. We need a massive public investment program for full employment in order to ensure that the recovery continues and that good paying jobs get created so as to sustain the effective demand necessary to restore a middle class based economy. But with Republicans in power, all we will likely get are more insane, wrong headed and insulting lectures on how the very social spending that has been shown to sustain the dynamism of a modern economy actually makes us more lazy and dependent.