July 7, 2014

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WSJ OpEd shows how North Carolina’s curtailment of unemployment benefits got people back to work. Whad’YaKnow? Stop subsidizing something and it begins to dry up.

A year ago, North Carolina became the first state in the nation to exit the federal government’s extended-benefits program for the unemployed. Facing the prospect of job-killing hikes in payroll taxes to pay back Washington, Gov. Pat McCrory and the state legislature instead reduced the amount and duration of unemployment-insurance benefits, which had been higher in North Carolina than in most states. As a result the state lost its eligibility to participate in the extended-benefits program on July 1, 2013.

National media and liberal activists pounced. Citing the decision and several other “outrages” by the state’s first Republican-led government since Reconstruction—such as adopting a pro-growth flat tax, clearing out the state’s regulatory thicket, and rejecting ObamaCare’s Medicaid expansion—left-wing critics subjected the Tar Heel State to months of invective and ridicule. …

… New York Times columnist Paul Krugman called it a “war on the unemployed.” …

… Left-leaning economists may still cling to their demand-side popguns and Keynesian religion. But here in the Tar Heel State, the governor and state legislature have decided to promote growth and opportunity by reducing and reforming taxes, streamlining regulation and improving public education and infrastructure. Given the state’s impressive economic growth rate in 2013—4.2% in total GDP and 4.9% in private GDP, both far exceeding the national average—they are not likely to change their minds soon.

 

 

In a related note, The Corner features Krauthammer’s Take on who won the unemployment debate. Not that being right makes any difference.

While liberals hail new job numbers as a vindication of President Obama’s economic policies, it is conservatives who should feel vindicated, said Charles Krauthammer on Thursday’s Special Report. Citing a recent National Review Online post on The Corner by economist Robert Stein, Krauthammer noted that the sharp drop in unemployment has coincided with the end of emergency unemployment benefits. Obama and the Democrats, who insisted that the benefits be extended, wrongly predicted that their expiration would come as a calamity to the poor. Instead, their end has demonstrably had “precisely the opposite effect.”

“These six months coincide with a decrease in the medium length of unemployment from 17 weeks to 13 weeks — the largest six-month decline in the length of unemployment ever measured,” he said. “Which means the real problem of long-term unemployment was a function of this anomaly of emergency-extended unemployment, which should never have happened, and whose end has contributed to this excellent result. The debate on that extension is over, and the conservatives were right.”

 

 

In one short paragraph Kevin Williamson outlines what is wrong with the present political practitioners of public narcissism; the office holders who get well by “doing good.” And yet, they insist they’re in “public service.” Williamson goes on to say that a culture cannot thrive if its innovators are subservient to its bureaucrats.

Chelsea Clinton, from her $10.5 million perch on GramercyPark, declares that she finds it impossible to care about money. Bill and Hillary Clinton, shuttling between their multimillion-dollar homes — Chappaqua, Washington, the $200,000-a-month rental in the Hamptons — denounce the wicked rich and protest that they are not “truly well off.” A professor of poverty and left-wing activist at the University of North Carolina School of Law is paid $200,000 per annum to teach a single class; anti-inequality crusader Elizabeth Warren was paid $350,000 per annum to teach a single class and thinks deeply about the plight of the little guy in her $1.7 million Cambridge mansion. The city of Bell, Calif., was nearly bankrupted by the very generous salaries its political class secured for themselves: nearly $800,000 per annum for the chief executive of the modest Los Angeles suburb, on his way to collecting a $1 million annual pension. (Several Bell leaders were later charged with misappropriating millions of dollars’ worth of public money for their own benefit.) Philadelphia was paying the feckless chief executive of its violent and defective government schools some $350,000 a year before the mayor got around to firing her, but not before the city wrote her a check for nearly $1 million to make her go away — and then she filed for unemployment benefits. A Philadelphia police lieutenant on an $87,000 annual salary takes home nearly $200,000 after nearly a hundred grand in “overtime” kicks in. The head of the Tennessee Valley Authority, a federal enterprise, was paid nearly $6 million in 2013; the agency’s chief financial officer and chief lawyer were paid $2.1 and $1.9 million, respectively, that same year. The school superintendent in Lubbock, Texas, is paid nearly a quarter-million dollars a year.

Politics pays. …

… No society can long thrive by making its creators and innovators subservient to its pimps and thieves. But agencies with the power to tax or the power to pay themselves out of taxes have the power to command, and, human nature being what it is, it is not surprising that their executives use that power to extort for themselves extraordinary levels of compensation (occasionally through criminal means, as in the Bell case), even as they bore us all to death talking about the sacrifices they have endured on behalf of their careers in “public service.” …

 

 

How’s Hillary doing, you ask? Jennifer Rubin has 10 lessons from Hill’s hellish book tour. 

Hillary Clinton certainly wasn’t expecting a tough go of it when she hit the road on her book tour. After all, her book was devoid of controversy — not to mention new or interesting material — so there wouldn’t be much fodder for the interviewers, right? And besides, her popularity as secretary of state was high and she has come to personify for liberal women (many of those interviewing her) a valiant fighter. Her competence? Beyond question! Her devotion to the little people? Beyond measure!

But things didn’t pan out as Clinton expected, to put it mildly. She has nothing much to say, certainly nothing new, so focus falls on her foreign policy stumbles and her curious obsession with stuffing her bank account. She is in a defensive crouch before she formally announces her presidential run.

Some suspect that Clinton doesn’t want to run but has had to keep up pretenses to sell books and cash in on speaking gigs. These are not so lucrative if you are merely the former secretary of state and not a possible future president. But Clinton certainly didn’t want to bomb on this tour, nor throw away whatever good will she accrued in office. No, this seems to be a situation where her ambitions outstrip her abilities.

For those who are considering a run, the lessons are clear:

1. If you don’t have something new to say, the conversation will be about things you don’t want to talk about. … 

 

 

Ed Morrissey posts on another Hillary Clinton error.

When I first saw this clip earlier today, I was inclined to dismiss it. After all, plenty of people make the mistake Hillary Clinton does in this interview with BBC Radio today. The interviewer asks the former Secretary of State to gauge the strength of the “special relationship” between the US and the UK, and offers a rather insipid answer that applies to nearly all of our allies in the West. But it’s the apparent ignorance of the UK’s political parties from a woman who served for four years as America’s chief diplomat that got the buzz (via TWS and NRO):

BBC: So how special is the special relationship?

CLINTON: It is so special to me, personally, and I think it is very special between our countries. There’s just a — not just a common language — but a common set of values that we can fall back on. It doesn’t matter in our country whether it’s a Republican or Democrat, or frankly in your country whether it’s a Conservative or a Tory. There is a level of trust and understanding. It doesn’t mean we always agree because of course we don’t.

In case you don’t get the joke, the Tories are the Conservatives in the UK. Their other major political parties are Labour and Liberal Democrats, which means this is another way in which the comparison is a bit inapt. …

 

 

John Lott takes a dim view of the new Freakonomics book.

The Freakonomics franchise certainly has legs. According to legions of admirers, in their best-selling series that includes Freakonomics, SuperFreakonomics, and now Think Like a Freak, University of Chicago economics professor Steven Levitt and journalist Stephen Dubner have taught us to use economic reasoning to shed light on real-life situations. In the process, they have also shown that economics can be fun.

But the fun quotient is ultimately diminished by the fact that their stock in trade is naive economics. Typically, Levitt and Dubner fail to understand that when a problem arises in a market, it generally provides an incentive for those involved to remedy the problem. …

… Levitt and Dubner also brag in Think Like a Freak about the authors’ “truly original” thesis, presented in Freakonomics, that liberalizing abortion lowered crime rates. Abortion, they argued, lowered the number of unwanted children who would be prone to commit crimes. But again, the authors naively ignored the new set of incentives that legalized abortion offered.

What actually happened when abortion was legalized will sound ironic, but no more so than the unintended consequences of many other changes in laws and regulations. Multiple studies have shown that the availability of legalized abortion increased the incidence of unprotected sex, which led to more unwanted pregnancies, which in turn boosted the number of unplanned births, even offsetting the reduction in unplanned births due to abortion. The net result: an increase in the number of single-parent families who couldn’t devote a lot of time to raising their children, an effect Levitt and Dubner ignored and one that more than offset what they focused on.

It would be nice to believe that Think Like a Freak and its prequels have promoted interest in sound economics. But alas, when you think like a freak, you think superficially, like most freaks probably do in real life.

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