Fox News contributor and syndicated columnist Charles Krauthammer made a very interesting and logical correlation Friday. The press has predictably failed to make the connection or even to relay Krauthammer's point, simply because it leads to the default assumption that conservatives were right on an important economic issue.
To be clear, the point Krauthammer and National Review Online's Robert Stein made on Thursday isn't directly provable. But the fact that an acceleration in job growth and a significant reduction in the unemployment rate have occurred in the six months since extended unemployment benefits expired is hard to explain away as some kind of lucky coincidence — especially given the endless blather of "weather" excuses the press and the administration have made about the economy in general since early this year. Video and a transcript follow the jump.
Krauthammer also made an excellent point about how you can't hold the economy — or at least this one — down forever, though heaven knows that the Obama administration, its overzealous regulators, and certain blue state governors have tried (video obtained at Real Clear Politics; bolds are mine):
Transcript (text found at Real Clear Politics has been slightly edited to reflect what Krauthammer actually said):
Look, I think all of this -- and I think it is very good news -- comes under the headline of, "You can't keep the American economy down forever."
You can try to do it with overtaxation. You can try to do it with overregulation. But in the end, the animal spirits of this incredible economy, all the industriousness, all the energy, all the innovation will break through — particularly as we see in the states where there's a huge increase in employment as a result of the energy explosion. Again, being kept down as much as it can by the federal EPA and by the blue states like New York State.
However, there's one factor here which I think is overlooked, and you won't read about it. Rob Stein, the economist, pointed this out in National Review Online. These six months, which Obama heralds as the largest, the fastest growth in jobs in the U.S. since '99, have coincided with the six months of which we have no longer extended emergency unemployment, long-term unemployment insurance.
Remember at the end of last year, the furious debate the Democrats, the president saying, "If you end this, the sky is going to fall, people won't go starving, it's going to increase unemployment"? It's had precisely the opposite effect.
In these six months, where you ended extended unemployment, and the conservative argument was if you subsidize something, you'll get more of it, if you stop the subsidy, you'll lessen it. So these six months coincide with a decrease in the median length of unemployment from 17 weeks to 13 weeks — the largest six-month decline in the length of unemployment ever measured. Which means the real problem of long-term unemployment was a function of this anomaly, emergency extended unemployment, which should never have happened, and whose end has created this -- has contributed to -- this excellent result. The debate on that extension is over and the conservatives were right.
What follows are a few specifics backing Krauthammer's contentions.
From December to June, the unemployment rate declined from 6.7 percent to 6.1 percent. Though that percentage-point decline is at the same rate as seen last year (0.1 points per month), it took 38 months for the rate to decline from its peak of 10.0 percent in October 2009 to the 7.9 percent seen at the end of 2012. That's an average of only 0.055 points per month. It should never be forgotten that the unemployment rate is still well above the 5 percent result the administration predicted would be the case today when the stimulus plan passed in February 2009.
Seasonally adjusted job growth in the past five months has averaged 231,000 per month. The annual averages during the previous three full years were as follows: 194,000 in 2013; 186,000 in 2012; and 174,000 in 2011. This year's average result thus far, if achieved through all of 2014, would mean about 550,000 more jobs added this year than the annual average of the previous three calendar years.
It's especially pertinent to note that after exploding by almost 3 million in 2013, the "not in labor force" figure, while still at a record 92.12 million, has increased by only 312,000 during the first six months of 2014.
In the virtual press release disguised as analysis at the Associated Press I reviewed earlier today, the White House — er, Paul Wiseman — didn't mention the expiration of extended unemployment benefits as a factor partially or fully explaining the uptick in monthly job growth. Of course not; they can't give any reasoned conservative argument any legitimacy. Too bad, especially given the economy's first-quarter contraction, there's no other plausible explanation.
Cross-posted at BizzyBlog.com.
