Punishing the Unemployed

In the 1960s, LBJ waged a war on poverty and racial discrimination with some positive results (as outlined in previous posts). Beginning in the 1980s, under Reagan, many of the advances made during the 60s have been reversed, under the notion of reverse racism and the belief that government is the problem not the solution (though it does appear to be the solution to making the rich richer). So what is the war we are fighting today? There are many from the cultural wars to the "clash of civilizations," but the war on poverty still remains, though arguably in a radically different incarnation. Today it appears the war is not to end poverty but against the poor, and working class and even middle class. It started in the 80s with cuts to federal programs but really accelerated under Clinton, with Welfare reform, tougher drug laws and mandatory sentences, banking reform and the like that all had deleterious effects on our most unfortunate citizens. Cuts to these programs have followed ever since, with a few exceptions, as have attempts to undermine Head Start, Medicare, Medicaid and even Social Security.

The most recent examples include cutting food stamps in the latest farm bill, even as big agribusiness got further subsidies from the government (which also has the side effect of exacerbating global poverty and hunger in the Global South), failing to help those who lost their homes in the latest financial crisis while bailing out the banks and attempting to punish the unemployed by cutting benefits (NYT). Krugman argues that this latest policy of cutting or eliminating unemployment benefits is not only mean-hearted but wrong-headed. Economically, cutting benefits under the faulty assumption that it will force these ne'er do wells to get a f***ing job just doesn't stand up to economic analysis (or empirical evidence). What it may do is force them to take bad jobs outside their area of expertise, which could put downward pressure on wages. This does not guarantee higher employment, just lower wages. Lower wages increase overall debt while leading to a decrease in consumption (which accounts for 70 percent of GDP). Thus the attempt to punish those who can't find jobs in our current economic malaise actually makes the overall economic picture worse. It is just the latest example of how orthodox thinking undermines sensible policy -- and how fundamentalism in general is the foundation for blind adherence to poor decision-making. 

But forget all this boring economic talk about our collective future, the planet might or might not be heating up, a few important murder trials are going on, gay marriage is about to destroy the moral fiber of America, women clearly have too much control over their own bodies and an epic eating contest is happening in Coney Island that has ramifications of global import (at least for Nathans fans).