In making the case for citizens subjects of the US to fork over more money in unemployment benefits, President Obama decided to bring out an actual real live unemployed person (no touching, please) for a little dog and pony show.
One teensy little problem. She’s unemployed because she was convicted of prescription drug fraud.
CBS19’s Jessica Jaglois has learned that Macko was found guilty of prescription drug fraud in March 2009, one month before Macko lost her job at ACAC. She served a one year probationary sentence.
Macko joined two other unemployed people and President Obama at the podium for a speech designed to encourage lawmakers to extend jobless benefits.
Now I may be jumping the gun, as the reporter was unable to confirm from the employer that she was indeed fired because of the conviction.
ACAC owner Phil Wendel was unable to tell CBS19 if Macko was terminated because of the conviction. There’s also no indication from the court file that Macko lost her job because of the court case, or that she has received unemployment benefits improperly.
CBS19 contacted Leslie Macko about the conviction, and she declined to comment until she speaks with her attorney. We have also reached out to the White House to see if they know the full story behind the woman they chose to stand next to President Obama, but have not received comment from them either.
But I’m pretty sure she wouldn’t need to check with a lawyer if she weren’t. Maybe I’m wrong. It still doesn’t excuse the remarkable lack of attention to detail of this Administration; it remains amateur hour.
While there may well be people who are out of work and need help to get by, it remains true that extending or increasing unemployment benefits artificially increases the unemployment rate by raising the reserve wage (the amount of money someone will accept to go to work rather than sit home). The solution is not using force to take my money and give it to people Congress think need it; the solution is for good people to freely help their neighbors. Believe it or not, even mean old heartless libertarians help their neighbors. Further, unemployment is a state and local issue, providing unemployment benefits doesn’t fall within the powers granted Congress in the Constitution. Like that matters.
From Don Boudreaux at Cafe Hayek.
Yes, egos are at work in markets. But egos are no less at work in the public sector. The big difference is that the egos at work in markets spend their own money and deal with other people consensually. The egos at work in government spend other people’s money and deal with other people at gunpoint.
Mark Perry adds them up at American Enterprise.
Americans spent almost 4 billion hours filling out tax forms last year, according to the National Taxpayers Union, and that number’s likely to be even higher this year. At the current average hourly wage of $18.90, the amount of time spent by Americans on tax preparation is worth about $75 billion, equivalent to the entire annual Gross State Product of New Mexico. Add another $30 billion that the IRS estimates taxpayers spend out-of-pocket on tax preparation (tax software, tax preparers, accountants, etc.), and the total annual cost of tax compliance equals the state of Iowa’s entire annual output.
The compliance burden of income tax preparation for Americans has risen significantly over time as a direct result of the increasing complexity of the U.S. tax code. For example, just the instructions for the 2009 Form 1040 total a record-high 175 pages, more than double the 84 pages of instruction in 1995, and more than 10 times greater than the 17 pages in 1965 (source).
My total cost is ~$80 for Turbo Tax and 5 hours of my time to prepare taxes, and a couple of hours a month keeping the required records, conservatively 20 hours. That’s more than a half a week of productivity, which for me is about $50 an hour (my wife’s is higher). The cost to me on top of the $50K+ I pay in Federal and State income taxes is more than $1300. Can you imagine the cost of an audit, where you must prove your own innocence?
I wonder if anyone in Congress considers this cost to the country as they continue to add complexity to the tax code on top of raising tax rates. Somehow I doubt it.
Economics was my Money and Banking textbook in 1989. I thought it was all correct until I read Mises and Hayek in grad school. This essay by Robert Higgs (pdf) highlights 8 key fallacies in Macroeconomic thinking, all of which politicians and pundits continue to repeat.
H/T Cafe Hayek
Well, if you think moving lots of money from productive uses to non productive uses (out of the pockets of consumers to purchase and destroy cars) is success, then Cash for Clunkers worked! Because it didn’t have any other positive effect.
Eventually, we’ll learn. The question is whether it will matter when we do.
A quick Econ lesson from Don Boudreaux, short enough for an elevator ride
Consider the following example: you fly to New York City. You get a cab at LaGuardia Airport and ask the driver to take you to Times Square in Manhattan – which is west of LaGuardia. Soon, though, you notice your cab headed east.
“Where are you going?” you inquire.
“To Times Square, but via Montauk,” the driver responds.
“Montauk! That’s a hundred miles east of here, and Times Square is west of here! What the heck are doing?!”
Your driver informs you that the taxicab business isn’t just for riders; its for drivers, too. Drivers need incomes, and his income of late has been too low to enable him to pay his bills. “So,” your driver announces, “by first going out to Montauk before heading to Times Square, I’ll make a lot more money off of you than I would if I drove you directly to Times Square. You’ll get there, but just not as quickly or as inexpensively as you would if I drove you their directly. Relax and enjoy the view.”
The above little tale sounds nuts. No taxi driver would do such a thing and justify his actions in that way.
But what the fictional driver in my little story does differs in no fundamental way from what producers everywhere do when they succeed in getting government to protect them from competition – for all such protection involves government preventing consumers from striking the best deals they can find.
Remember the Louisiana Florist license? Same idea. Central planners simply can not know enough to make better choices than all individuals.
Don Boudreaux at Cafe Hayek says
Putting any part of the economy into the hands of politicians is like putting the space program into the hands of astrologers.
And no, I’m not surprised at Donna Edwards lack of intelligence.
Chinese airports built to accommodate what central planners thought would be hot tourist spots are not meeting expectations.
This is not how things were supposed to be when the $57-million airport opened in late 2007. Local officials were so confident that tourists would flock to this beautiful, mountainous county in southwestern China that they made the terminal big enough to accommodate 220,000 passengers annually, and built a runway capable of handling a 140-seat Boeing 737.
But only a few charters and budget carriers have established service here. A grand total of 151 people flew in and out of Libo last year.
At a time when anxiety is growing over the United States’ aging infrastructure, China is pouring billions of dollars into improving its transportation network to catch up with the developed world.
China has added about 40 airports in the last decade alone, bringing its total to 166. The U.S., by comparison, has 503 airports that serve at least 2,500 passengers a year, according to the Federal Aviation Administration.
But in the mad dash to expand China’s civil aviation system, many new airports are lacking one important thing: passengers.
Spurred by federal infrastructure money, easy bank loans and the cachet of having planes land in their backyard, many small cities jumped at the opportunity to lay down runways and open terminals.
“An airport is like a business card for the city. It can boost tourism and the economy,” said Xu Hongjun, a professor at the Civil Aviation University of China. “But a lot of small airports are not doing well. They need a lot of subsidies from the central government. They were too optimistic.”
With lessons like this all around us, why do we continue to do it?
From Don Boudreaux
But further pondering of your point leads me to look beyond such nit-picking to see fascinating possibilities. Not only insurers, but all producers who greedily refuse to supply persons who don’t pay should be set aright. Now I’m sure that you don’t ration the supply of the books you write according to any criteria as sordid as requiring people actually to pay for them. But our society is full of people less enlightened than you.
For example, the typical worker rations his labor services according to who pays and who doesn’t. That must stop. Oh, and supermarkets! Every single one rations groceries according to who pays. Likewise with restaurants, clothing stores, home-builders, furniture makers, even lawyers! You name it, rationing is done according to who pays.
Awesome. I doubt He will respond.
Mark Perry and the WSJ point out what anyone who understands basic Economics already knows… the overall effect of a minimum wage increase is always negative and can not be positive.
After all, if minimum wage laws could have positive net effects and politicians can legislate the creation of wealth with artificial price controls, why are they always being so stingy and miserly with such pitifully small increases; why don’t they boost the minimum wage for unskilled workers up to something more respectable like $25, $50 or $75 per hour?
As I’ve said before, if what you do isn’t worth the minimum wage, the law requires you make $0