by Dan Mitchell
I asked back in September whether all the bad news about Obamacare meant it was time to feel sorry for President Obama and other statists.
Some people apparently didn’t realize I was being sarcastic, so I got some negative feedback.
I’ve since learned to be more careful with my language, and subsequent columns about Obamacare developments have used more direct rhetoric such as Obamacare disaster, Obamacare Schadenfreude, and the continuing Obamacare disaster.
Well, I don’t even know if there are words that can describe the latest bit of bad news about Obamacare. The Congressional Budget Office, which usually carries water for those who favor bigger government, has been forced to acknowledge that Obamacare is going to wreak havoc with America’s job market.
Today’s Wall Street Journal has a column on the topic, giving considerable and deserved credit to Casey Mulligan, an economics professor at the University of Chicago who has produced first-rate research on implicit marginal tax rates and labor supply incentives.
Rarely are political tempers so raw over an 11-page appendix to a dense budget projection for the next decade. But then the CBO—Congress’s official fiscal scorekeeper, widely revered by Democrats and Republicans alike as the gold standard of economic analysis—reported that by 2024 the equivalent of 2.5 million Americans who were otherwise willing and able to work before ObamaCare will work less or not at all as a result of ObamaCare. As the CBO admits, that’s a “substantially larger” and “considerably higher” subtraction to the labor force than the mere 800,000 the budget office estimated in 2010. The overall level of labor will fall by 1.5% to 2% over the decade, the CBO figures. Mr. Mulligan’s empirical research puts the best estimate of the contraction at 3%. The CBO still has some of the economics wrong, he said in a phone interview Thursday, “but, boy, it’s a lot better to be off by a factor of two than a factor of six.”
That’s a lot of lost jobs, which is going to translate into lower levels of economic output and reduced living standards.
By the way, I can’t resist quibbling with the assertion that CBO is “widely revered” and that it’s the “gold standard of economic analysis.”
Utter nonsense. CBO helped grease the skids for Obamacare by producing biased numbers when the law was being debated.
And that’s just the tip of the iceberg. CBO also produces “analysis” which implies that you maximize growth with 100 percent tax rates. And the bureaucrats at CBO also are reflexive advocates of Keynesian economics, which is why they claimed that Obama’s so-called stimulus was creating jobs even though unemployment was rising.
So you can understand why I don’t like citing CBO numbers, even when they happen to support my position.
As far as I’m concerned, the bureaucracy should be shut down. And if Republicans win the Senate in the 2014 elections, it will be interesting to see whether they have the brains to at least reform CBO to limit future damage.
But I’ve digressed long enough. Let’s get back to the WSJ column about the latest Obamacare disaster.
Our friends on the left are in a very tough position.
…liberals have turned to claiming that ObamaCare’s missing workers will be a gift to society. Since employers aren’t cutting jobs per se through layoffs or hourly take-backs, people are merely choosing rationally to supply less labor. Thanks to ObamaCare, we’re told, Americans can finally quit the salt mines and blacking factories and retire early, or spend more time with the children, or become artists. Mr. Mulligan reserves particular scorn for the economists making this “eliminated from the drudgery of labor market” argument, which he views as a form of trahison des clercs. …A job, Mr. Mulligan explains, “is a transaction between buyers and sellers. When a transaction doesn’t happen, it doesn’t happen. We know that it doesn’t matter on which side of the market you put the disincentives, the results are the same. . . . In this case you’re putting an implicit tax on work for households, and employers aren’t willing to compensate the households enough so they’ll still work.” Jobs can be destroyed by sellers (workers) as much as buyers (businesses).
By the way, just in case you’re an unsophisticated rube like me, Wiktionary says that trahison des clercs means “a compromise of intellectual integrity by members of an intelligentsia.”
Which is a pretty good description of leftists who are twisting themselves into pretzels trying to rationalize that joblessness and government dependency are good things.
And Prof. Mulligan makes the right analogy.
He adds: “I can understand something like cigarettes and people believe that there’s too much smoking, so we put a tax on cigarettes, so people smoke less, and we say that’s a good thing. OK. But are we saying we were working too much before? Is that the new argument? I mean make up your mind. We’ve been complaining for six years now that there’s not enough work being done. . . . Even before the recession there was too little work in the economy. Now all of a sudden we wake up and say we’re glad that people are working less? We’re pursuing our dreams?” The larger betrayal, Mr. Mulligan argues, is that the same economists now praising the great shrinking workforce used to claim that ObamaCare would expand the labor market. He points to a 2011 letter organized by Harvard’s David Cutler and the University of Chicago’s Harold Pollack, signed by dozens of left-leaning economists including Nobel laureates, stating “our strong conclusion” that ObamaCare will strengthen the economy and create 250,000 to 400,000 jobs annually.
Gee, that “strong conclusion” about an increase in jobs somehow turned into a cold reality that the economy might lose the equivalent of 2.5 million jobs.
This is very grim news. We can be happy that there’s now even more evidence that big government doesn’t work, but we should never forget that there are real victims when statist policies lead to less growth and more joblessness.
So let’s try to bring some cheer to a dismal situation with some new Obamacare cartoons.
Our first entry is from Chip Bok, who is mocking the New York Times for writing that fewer jobs was “a liberating result of the law.”
Gary Varvel’s analysis of the job impact has a seasonal theme.
And the great Michael Ramirez points out that the death panel has been very busy.
Lisa Benson picks up on the same theme, pointing out that at least Granny is still safe.
And Henry Payne makes a subtle, but superb point about labor supply incentives.
Let’s now look at another Lisa Benson cartoon. It’s not about the job losses, but the underlying foolishness of how Obamacare is designed.
And if you like cartoons with sharks, here’s a classic one about Keynesian economics.
Let’s close with a couple of cartoons that look at the big picture.
Glenn McCoy shares a warning label.
And Steve Breen also has a warning label about Obamacare, but it’s much quicker to read.
Last but not least, Scott Stantis looks at one of the side effects of Obamacare.
Stantis, by the way, produced the best-ever cartoon about Keynesian economics.
P.S. If you want to learn more about how redistribution programs such as Obamacare trap people in dependency and discourage them from the job market, click here.
There are even some honest leftists who recognize this is a serious problem.