Civitas Review

March Sums Up Liberalism: 'Extend Unemployment'


The big march Saturday included people with signs that perfectly sum up liberalism: "Extend Unemployment."extend two good copiesThat is exactly what modern liberalism does: It extends unemployment.When the recession began, the number of long-term unemployed people was a bit over one million; now it's 3.6 million, a news report says.

So when you read the news reports about how there were thousands on the march, remember the millions who have suffered from extended unemployment under the Obama administration.

As we have said previously, most economists believe excessive unemployment compensation makes unemployment worse. Benefits extended too long give people rational reasons not to work, and they discourage employers from hiring. Economists from the Federal Reserve — hardly a wild-eyed bunch — suggest that the federal government's extension of jobless pay is one reason for our economic doldrums.

But liberals don't get it. And unemployment benefits are not the only liberal snake oil that keeps people from getting jobs.

extend unemployment and other signs perfect"Expand Medicare … Extend unemployment  … Raise the Minimum Wage"

Liberal policies, whatever good they did years ago, now cause more harm than good. Medicaid wastes billions while doing little or nothing for the health of those trapped in the system, and it may even make health care worse. Raising the minimum wage would kill more jobs.

But the liberals keep marching onward, heedless of what their well-intentioned policies actually do. Remember what happened when the Congressional Budget Office — another sober-minded agency — said Obamacare would push more than two million workers out of the job market in the space of a few years. The Obama administration and its sycophants  were saying, Wow, that's great. In other words, they're admitting this great truth: that when you support liberalism, you support schemes that will in the end ….

extend one more

Duke U. Survey: Biz Leaders Cutting Jobs, Hours Due to Obamacare


A survey released by the Duke University Fuqua School of Business in December has recently been receiving some media attention. The survey asked Chief Financial Officers – among other things – how Obamacare is impacting their hiring and personnel decisions. The results were unsurprising yet very noteworthy nonetheless:

A significant percentage of U.S. chief financial officers indicate that because of the Affordable Care Act (ACA), they may reduce employment growth at their firms and shift toward part-time workers….

Nearly half of U.S. companies are reluctant to hire full-time employees because of the ACA. One in five firms indicates they are likely to hire fewer employees, and another one in 10 may lay off current employees in response to the law…..

Other firms will shift toward part-time workers. More than 40 percent of CFOs say their companies will consider switching some jobs to less than 30 hours per week or targeting part-time workers for future employment….

"I doubt the advocates of this legislation would have foretold the negative impact on employment," said Campbell R. Harvey, a professor of finance at Fuqua and a founding director of the survey. "The impact on the real economy is startling. Nearly one-third of firms may either terminate employees or hire fewer people in the future as a direct result of ACA."

In addition, 44 percent of companies say they will consider reducing health benefits to current employees in response to the ACA.

On Wednesday I blogged about a new CBO report detailing how Obamacare will severely curtail the amount of labor workers will be willing to supply, now we have a survey demonstrating that Obamacare is sharply reducing employer's demand for labor. In sum: Fewer workers willing to work, or cutting back the hours they are willing to work. Fewer employers seeking to hire, or cutting back the hours they are willing to employ workers. And to boot, a significant portion of those still left with a job may see their health benefits reduced. And to repeat myself, these results were completely predictable.

The result of this reduction in labor will be far less output generated by the economy, and greater government dependency. Somehow, the greater amount of government dependency will need to paid for from tax proceeds extracted from a smaller economy.

I wonder how the Obamacare defenders will try to spin this as being good news.

Challenging a Move to Silence Conservatives


According to National Review:

Top Republicans including Senate minority leader Mitch McConnell, House speaker John Boehner, and House majority leader Eric Cantor are calling on the newly installed Internal Revenue Service commissioner to withdraw a proposed rule regulating tax-exempt 501(c)(4) groups, charging that it would muzzle the groups’ right to free speech. The GOP leaders say that the IRS, which last May admitted to singling out conservative groups for improper scrutiny, is attempting once again to silence them, this time in the runup to the 2014 midterm elections.

And, no surprise, the bureaucrats have been using stealth tactics to try to ramrod this new rule through. After all, the IRS has been harassing conservative groups for quite awhile. Experts tell us that these new rules will hamstring 501(c)(4) groups — and they may also handcuff other types of nonprofit groups.  Read the whole article above.

Then, let the government know what you think. Go to the website You can click on a link there that takes you to the government web site that is collecting comments. Refer to IRS REG-134417-13. Tell the bureaucrats that it infringes on our right of free speech, and tell them to keep the IRS from attacking our rights.

New CBO Report: Obamacare's Job Destruction Worse Than First Predicted


One the most important fundamentals of economics is the lesson that incentives matter. That is, the institutional rewards and punishments for certain behavior will result in people altering their behavior in predictable ways. This lesson is captured in oft-repeated phrases like "when you tax an activity, you get less of that activity," or – relevant to more recent debates – "when you pay people not to work you will see more people not working."

This economic fundamental is further on display by a Congressional Budget Office report that suggests that the incentive structure established by Obamacare will results in millions of additional jobs lost. As the Wall Street Journal writes:

Now CBO—full of liberal-leaning economists—says the economy will lose the equivalent of two million full-time workers by 2017 and 2.5 million over the next decade, a threefold increase over its prior estimate.

CBO's analysis is rooted in ObamaCare's complex design that includes new subsidies, taxes and mandates. For low-wage, lower-skilled or discouraged workers in particular, ObamaCare offers incentives that can force them to trade jobs for entitlement benefits.

CBO's conclusion is that ObamaCare will encourage people to supply less labor by deciding not to take a job or by working fewer hours. The law's insurance subsidies are gradually taken away as income rises, "creating an implicit tax on additional earnings," the CBO observes. These effective marginal tax rates reduce the rewards for work—whether it be overtime, accepting a promotion, or training in the hope of higher future earnings.

Because of the structure of Obamacare's insurance premium subsidies, it was entirely predictable that people would respond by taking fewer hours or opting not to take certain jobs for fear of losing the benefits (as was employers' response to cut back jobs and hours due to the employer mandate penalty).

Rather than helping those in poverty or low-income households, Obamacare serves to make the poverty trap an even more potent force keeping poor people poor.

In this regard, Obamacare is working as planned: pull more people into government dependency in order to strengthen political power.