Five Percent For Nothing¹

WaPo:

"I think considering the possibility of extending unemployment benefits is not a bad idea," Greenspan said in response to questioning at a hearing of the House Committee on Education and the Workforce. He added that he has supported such extensions before, "in times like this."

This makes a lot of sense, so our compassionate conservatives in charge are falling all over themselves to immediately implement this sound advice, right? Here's yesterday's WH press gaggle:

Question: Scott, one other question. Mr. Greenspan, this morning, before a House Education Committee, endorsed an extension of unemployment benefits. The administration has been opposed to that so far. Is the President --

MR. McCLELLAN: I don't -- I think that -- let me correct the premise of your question. Where has anyone ever said -- made such a statement?

Question: Well, do you endorse what Mr. Greenspan said?

MR. McCLELLAN: The President is going to be talking about our economy today. The President is optimistic about the direction our economy is moving. And the best thing we can do for those who are looking for work and cannot find a job is to continue taking steps that create as robust an environment as possible for job creation. You heard the President talk yesterday about how we are an economy in transition. And you heard him talk about the trade adjustment assistance we have provided. You heard him talk about the job training resources that we have provided. And you heard him talk about the importance of acting on his 21st century initiative to make sure workers have the skills to fill the jobs of the 21st century.

Obviously, we've always said that -- in terms of the question that you asked -- that we will continue to work with Congress on those issues. But I think that the best way to help those who are out of work is to create an environment for robust job creation. So we've added jobs now for six straight months. The unemployment rate is below the average of the '70s, '80s, and '90s. We've seen a sharp decline in the unemployment rate. But this President recognizes there's more to do and that's why he's continuing to advocate the policies he talked about yesterday.

Question: So what about Mr. Greenspan's comments on supporting extension of jobless benefits?

MR. McCLELLAN: I think I've expressed our view.

You certainly have expressed your view, Scotty. You pulled out the tired "when did we ever say that" crap and evaded the question. Further, when you claim BushCo will "work with Congress" it is clear that you don't want to extend benefits at all. Sen. McConnell said this the other day* in the Senate (PDF):

[A] 5.6 percent jobless rate was the best of times under President Clinton and now it is the worst of times under President Bush. It's the best of times under President Clinton, worst of times under President Bush. This is spin. That is all it is. How can at one time 5.6 percent be considered the sign of a healthy economy and at other times not?

We see the same kind of spin on policy. Under the previous administration and when the House and Senate were controlled by our friends on the other side of the aisle, temporary unemployment compensation benefits were allowed to expire at 6.4 percent unemployment. Again, temporary jobless benefits expired when the jobless rate was at 6.4 percent and not a word of complaint was heard from our friends on the other side of the aisle in 1994. It was the best policy back in 1994 to allow temporary unemployment to expire at 6.4 percent. That was the policy back then. Now 10 years later, when the same temporary unemployment compensation benefit expired because the unemployment rate is at 5.6 percent, the same policy under a better economy is called an outrageous act.

Sen. McConnell and his friend Sen. Santorum had a nice little repartee in which they expressed great confusion over why 5.6% unemployment today isn't the same as it was in 1996. To them, things are rosy and thus unemployment benefits should not be renewed during the Bush Jobloss Recovery, just like during the Clinton Boom. They doesn't read too good, does they?

First of all, we can't really compare apples to apples because we only have 2 months of data for 2004, with a steady 5.6% unemployment rate². In 1996 that rate actually was as low as 5.1% during the year, and fluctuated quite a bit between 5.2 and 5.4%. Jury's still out on this year, but given our practically nonexistent job growth it's hard to see the situation really improving. However, there's one thing that has helped keep the rate artificially low: people falling off the labor radar screen.

The labor force participation rate dropped to 65.9% last month, which is lower than at any point during 1996. This is happening because we only count people who are actively looking for work, and there are no jobs to be found so people are just giving up. According to the Economic Policy Institute, if we count the "missing labor force", the unemployment rate would actually be 7.4%. Folks, that would put us at exactly the same politically deadly figure as we had in 1992!

In other words, the situation is bad and lots of people are hurting. The average duration of unemployment is now a staggering 20.3 weeks, which is significantly higher than the 16.4 week average at the same point in 1996. It's unconscionable that Bush and GOP Congress members have refused to extend unemployment benefits, justifying their actions by trotting out the canard that unemployment isn't so bad.

One of the reasons Bush I lost his job in 1992 was that he appeared to minimize the economic pain people were enduring. He was "out of touch" and thus seemed to lack compassion. At this point, I can't accept that these guys are ignorant about the differences between 1996 and 2004, so I can only conclude that they are in fact heartless bastards and spinning madly in a desperate attempt to confuse the public, hoping we'll yet again vote against our own economic interests.

Another thought occurs: what if the Republicans are holding back on benefits in an effort to keep the unemployment rate low? If you pass another extension, people will start getting counted again as being in the workforce because you have to be "available for and actively seeking work" to get benefits. With no jobs being created, this would boost the size of the labor pool without a corresponding increase in the number of people employed. The unemployment rate would balloon, perhaps up to that very high, unspinnable 7.4% level. That would be as bad for Bush II as it was for Bush I, so clearly this must be avoided at all costs, even if it means pain for average Americans.

Or perhaps I'm being too cynical...

ntodd

1 - A million bonus points for anybody who guesses the significance of the post title.

2 - All of my unemployment data comes from the BLS monthly "A" tables.

* [Update: oops, McConnell was talking on 3/9.]  ¶ 10:12 AM