North Carolina’s Misunderstood Cut in Jobless Benefits

From today’s NYT blog “The Upshot” by Justin Wolfers:

Since North Carolina effectively eliminated unemployment benefits last year for people unemployed 20 weeks or more, the state has become a symbol in the partisan wars over economic policy. People on either side of those wars have argued that it proves the economic advantages — or damage — of providing the long-term jobless with cash payments.

But digging into the data suggests North Carolina should really be a case study in people seeing what they want to see. Over the last year, the state’s economy has performed remarkably like the economy in nearby states.

North Carolina is more than a case study, too. It is a laboratory for the rest of the country, given that at the start of this year, the federal government eliminated all benefits for the long-term unemployed. Both political sides have looked to North Carolina for evidence to bolster the positions they have taken in this debate.

Republicans, who voted against extending unemployment benefits, argue that ending benefits will spur the long-term jobless to look harder for work; with more eager workers, employment will rise, conservatives say. Democrats, many of whom voted to continue jobless benefits for the long-term unemployed, say that ending benefits will force the unemployed to cut their spending, which may have broader ripple effects that could slow the labor market recovery.

My reading of the North Carolina experiment is that it provides little support for either side.

The question of whether to provide those benefits is an important one. But perhaps the answers should depend more on social values than on macroeconomic implications. After all, the point of unemployment insurance isn’t to boost the economy as a whole, but rather to ensure that an unlucky few don’t shoulder an unbearable burden. Whether we’re doing that is a question more of values than of economic statistics.

Read the entire article here.

Romney’s recent attacks mimic Republican lies on “welfare queens”

Republican presidential nominee Mitt Romney attacked President Obama on the campaign trail, claiming that an executive order issued this week through the Department of Health and Human Services significantly weakens work requirements for welfare recipients. Romney claims as a result that freeriders will increase the welfare rolls in states across the country, shirking their duty to work and increasing the burden on taxpayers like us.

Obama should run this recent Onion meme in response to Romney’s lies about welfare.

This spindrift spread quicker than one can say “Cadillac driving welfare queens”—which is Republican code for lazy African American women with lots of children who game the welfare system while being discouraged to work.

Romney’s attack is a cheap but familiar ploy in the Republican Party establishment. The phrase “welfare queen” was first introduced into the lexicon of American politics by President Reagan in his failed 1976 presidential campaign, and was later modified by former Republican presidential candidate Pat Buchanan, a speech writer for both Nixon and Reagan with well-documented racist views.

Let me be clear:  Romney’s assertion is a lie. The Obama campaign and many independent media and policy sources contend that the rule change does nothing of the sort. Rather, it gives states the kind of flexibility to make their own determination what counts as work and whether it changes the status of recipient benefits. Under the current austerity measures most states have adopted this will have the likely effect of decreasing rather than increasing the number of welfare recipients. This outcome is consistent with the purpose of welfare reform in the 1990’s that was—shockingly—spearheaded by bipartisanship between former Speaker of the House Newt Gingrich and former President Bill Clinton.

Romney’s lie also highlights two facts about his own position and track record that Americans should consider closely. First, Romney says he is for “states’ rights” and as governor asked for this same flexibility concerning welfare requirements, so any rule change by HHS to grant states more authority to determine their own requirements is consistent with his position. Second, the implicit claim that Obama is being easy on welfare recipients belies Romney’s own track record as governor of Massachusetts. The AP reports that “as governor, Romney offered welfare recipients free auto insurance, registration, inspections and memberships in AAA.”

Grandstand politicking and election year spindrift pushed aside, the rule change for welfare that gives states more authority to run their own show highlights a different issue that neither candidate has much traction on:  what do about unemployment, declining wages, and job insecurity.

Although Obama consistently hammers on the message of economic recovery and economic justice going hand in hand, there is a deficit of real policy prescriptions forthcoming about how to reverse the plight of working Americans who are hurting more than ever thanks to Republicanomics. He has been unable to get the Jobs Act passed by a recalcitrant and pitiless Congress. Romney’s record on jobs at Bain Capital is well-known:  lower wages, less job security, outsourcing, and anything else to make a fast buck.

The problem is that welfare is increasingly necessary in an economic climate where recovery is slowly grinding forward by the numbers, but without real jobs to make it effective and lasting. Moreover, economic inequality in this country is at its highest point since the Great Depression—the wealthiest Americans are reaping the most rewards while the rest of us are suffering. Furthermore, corporate profits and the mountains of cash they are sitting on are at near-record highs, but they refuse to invest in their country.

Forget about the facts, please. Let’s talk about those rich black “welfare queens” and how they are cheating us hardworking white males. That’s the real message Romney is purveying and it is putrid, ugly, and profoundly un-American.