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The economics of the ignorami

| Saturday, Jan. 31, 2015, 9:00 p.m.

The National Bureau of Economic Research has confirmed what critics of extended unemployment benefits have been saying all along: Incentivizing non-work in such a way disincentivizes work.

“We find that the cut in unemployment benefit duration led to a 2 percent increase in aggregate employment, accounting for nearly all of the remarkable employment growth in the U.S. in 2014,” researchers concluded.

Much to the chagrin, of course, of the liberal left, some of whom chose to attack “right-wing media” for reporting on a “flawed study.” These are the same “progressive” folks who argue that unemployment insurance stimulates the economy and that food stamps have some magic multiplier that produces a net benefit to the economy.

By that logic, we can solve all of our economic woes by having everyone on unemployment and collecting food stamps. ...

Fantasy and delusional economics — the economics of the ignorami — long have been the province of the leftists, ever more charmed (snookered is the better word) by the European socialist model. Think President Obama.

Shrinking unemployment is heralded but the dirty little fact is that it's down primarily because a record number of people have stopped looking.

Then there's this: Days after the Congressional Budget Office issued a warning about soaring U.S. debt — $22.3 trillion by 2020, just five years hence — Mr. Obama declared an end to “mindless austerity” and called for a massive surge in government spending.

Ah, more and more government intervention. It's the latest lie to cover up for the failure of the last lie.

“We need to stand up and go on the offensive and not be defensive about what we believe in,” the president told House Democrats gathered for a Philadelphia retreat.

But Obama's economic policies have been so offensive that they're defenseless. ...

The New York Post's Betsy McCaughey offers an instructive, though disturbing, visual of Obama's spendthriftiness, noting how federal spending will approach $4.8 trillion by 2020:

“A four-foot stack of $100 bills totals $1 million. To get to $1 billion, you need seven stacks as high as the Washington Monument. To get to $4.8 trillion, you need 33,000 Washington monuments.”

How many of those monuments do you imagine are pure waste? ...

As the croniest of the crony capitalists renew their push for a more permanent reauthorization of the wealthfare-delivering Export-Import Bank, regular Trib economics columnist Don Boudreaux put the fallacy of it all into perfect perspective in a letter he shared and sent to The Wall Street Journal:

“Let's get this straight,” the George Mason University scholar writes. “Hundreds of thousands of private investors across the globe — each with skin in the game and specialized exclusively in the task of spotting and seizing profitable investment opportunities — all mistakenly conclude that loans (supposedly) worth the risk are, in fact, too risky.

“Therefore ... we are to trust the contrary judgments of government bureaucrats seated in Washington — each under pressure to appease special-interest groups, each spending only other people's money, and none of whom is specialized exclusively in the task of spotting and seizing profitable investment opportunities.”

As the professor closes, anyone who buys such an argument “is the sort of person who eagerly emails his or her bank account number to strangers claiming to be representatives of recently deceased Nigerian princes and then awaits the promised receipt of millions of dollars.”

And that, in a nutshell, is Washington.

Colin McNickle is Trib Total Media's director of editorial pages ( 412-320-7836 or cmcnickle@tribweb.com).

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