The Liberal Zone

Is there any better indication of the perverse nature of progressive ideology than that the left now declares it desirable that able-bodied workers will be able to choose not to work to support themselves as the result of taxpayer funded wealth transfers? It used to be the case that the left would dismiss with contempt the notion that its welfare policies discouraged people from working. Welfare was simply for the unfortunate few that couldn’t possibly support themselves, we were always told. Now, with the announcement from the CBO that Obamacare will result in 2 million fewer workers in the workforce, the true mindset of the left comes out. Paying government subsidies to people who can and do work to support themselves is now apparently a good thing precisely because it allows them to stop working to support themselves.

When it comes to the warped and disturbed, Rod Serling has nothing on the bizarre thinking of progressives.

37 Responses

  1. Frist!! (Is that allowed on one’s own post?)

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  2. I am still trying to wrap my head around the idea that if you increase the cost of labor for employers, the drop in demand for workers is too small to bother attempting to measure…

    The logic that employers don’t care about the cost of labor and that the laws of supply and demand are somehow suspended in the labor market is an article of faith on the left.

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    • Brent and Scott – a couple of points, certainly not necessarily in refutation.

      First, one of the stated goals of social security old age and disability benefits was to shrink the number of persons looking for work. It was not thought, in 1935-39, that the labor market was made more healthy by having the lame and the elderly competing for jobs. Thus the shrinking of the labor force as policy is not a new idea.

      Second, I doubt that liberal economists think that shrinking the labor pool will not have the effect of raising wages. I think they want that very much and I am wondering why you think they have denied that. It would not surprise me if one in particular had denied that, but my guess would be that most of them are only hoping it will not raise wages enough to send jobs scurrying to MX or further away.

      In a slack employment market we would not see a measurable effect immediately, I am guessing, so to the extent these sorts of policies reduce “slack” liberal economists will say it is all to the good.

      Brent and Scott, I must assume that the political goal of the D party is to emulate Canada, but with better weather.

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      • Mark:

        First, one of the stated goals of social security old age and disability benefits was to shrink the number of persons looking for work.

        I’d be interested in seeing where that goal was stated. I’ve always thought that the singular public justification of SS was to prevent/reduce poverty amongst the elderly.

        Regardless, it remains a mystery to me how any economist could think that taxing some people in order to pay other able-bodied people not to work could possibly be beneficial to an economy. Shades of the parable of the broken window.

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  3. Scott, it’s perhaps the sweetest Frist! Of all.

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  4. When Bush’s signing statements and executive order were criticized it was just common sense. When Obama’s signing statements answer executive orders are criticized its racism. Straight up. Ask Chas.

    http://www.nytimes.com/2014/02/08/opinion/blow-a-pen-a-phone-and-a-meme.html?partner=rssnyt&emc=rss&_r=0

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  5. Speaking of “otherizing,” here’s the radically leftist TPM defending Mitch McConnell.

    http://talkingpointsmemo.com/dc/conservatives-knives-out-mitch-mcconnell

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  6. Oh yeah, TOTALLY better then the status quo.

    The insurers told healthcare advocates that the November guidance requires them to reject payments from the Ryan White program in order to combat fraud, said Robert Greenwald, managing director of the Legal Services Center of Harvard Law School, a position Louisiana Blue still maintains.

    Why are they doing this you ask?

    In November, however, it (CMS) warned “hospitals, other healthcare providers, and other commercial entities” that it has “significant concerns” about their supporting premium payments and helping Obamacare consumers pay deductibles and other costs, citing the risk of fraud.

    Why do Democrats hate HIV patients and want them to die?

    http://mobile.reuters.com/article/idUSBREA170IA20140208?irpc=932

    What’s even more fucked up is that Landrieu voted for this piece of shit bill and now Democrats get to bail out, with our children’s already over-mortgaged future (talk about being condemned to slaves of the state) these companies that Landrieu is now accusing of engaging in Adverse Selection!

    Please, defend this law.

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  7. Why should I be happy to pay my money to someone else, a stranger, to retire early? Or pursue a career in, say, fecal sculpting?

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  8. “I’d be interested in seeing where that goal was stated”

    I remember that from a course i took on entitlement policy. I’ll try to remember the name of the book. it’s in a box somewhere.

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    • NoVa and Scott – it is not current thinking because now lots of 65 YOs live to be 85 and want to work until they are 75. It was a wholly different time then, and the perception that our life span was 64 years played into it, no doubt. But here is a brief history: http://www.ssa.gov/history/ret2.html

      Some quotes:

      “Social Security, when it was created in 1935, sought to achieve two goals-moving older workers out of the work force to make way for younger workers, and to partially replace lost income due to retirement. Those goals were applicable in 1935, but are not in 1991.”(1) Around the same time, a member of Congress from California authored a column in the Los Angeles Times in which he stated: “So how did this regressive and unproductive test become policy? It was born out of Depression-era reforms in 1935 to create jobs during the most grim economic period in U.S. history. Millions of older Americans were discouraged from staying employed. The earnings test reduced their overall income, making it unproductive for them to work beyond retirement age. This meant younger workers with families could have jobs.”(2) A recent monograph for the Third Millennium group put it this way: “. . . the paramount short-term factor in Social Security’s birth – the Great Depression . . . For the short term, it was considered imperative to get the elderly out of the job market. . . Social Security still carries out this Depression-fighting aim, despite the fact that there is no longer any goal to be served by pushing seniors out of the workforce.” (3)

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      • Mark:

        Thanks. But the paper you linked to seems to conclude that, despite some indications to the contray, a desire to shrink the labor force was not a motivating factor. It concludes:

        The creators of Social Security saw the new social insurance program as providing the means for older workers who wanted to retire but lacked the means to do so, to have the necessary economic security to retire in dignity. By and large, it was the philosophical premises of social insurance which informed their intentions and their program designs, not any industrial policy of making room for younger workers in a marketplace where they were crowded-out by older workers. The primary rationale for including a retirement test in the Social Security program was adherence to social insurance principles. The belief that the RET would have industrial policy impacts was not prevalent at the program’s creation. Following enactment of the law, this idea became part of the folk-history of the Act.

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        • So the conclusion states. But you must have read in the body of the piece about the RR retirement act and the Townsend Plan and how the notion of industrial policy was widely bandied about by liberals and was a political given at the time. Politics doesn’t provide laws that are based on one person’s views, Scott, at least not in this country. Another idea that played into prepaid SS was the perception of insurance as opposed to the perception of welfare. Another idea that played in was having a built-in counter-cyclical against future Depressions.

          So I while I might defer to the notion that neither industrial policy nor Myrdahl’s counter-cyclicals were “prevalent” [WTF does that mean in this context -“did not prevail?”] they were always in the conversation.

          For all I know the “prevalent” idea was re-electing FDR. When my dad got his Master’s in Financial Analysis in 1940 it was thought by his profs that the counter-cyclical idea and then industrial policy were the prime movers policy wise, because it was believed that the program was solvent and prepaid as designed and not a wealth transfer from young to old. Notice these life expectancy numbers: 1930 – 60, 1940 – 63 [I wrote 64 from memory before] 1950 – 68 [first time we could dimly see large numbers of recipients] 1960 – 70, 2010 – 79. Also, WW2 came along and we spent the SS account and more on the war.

          My criticism of his conclusion is based on his failure to internalize how few people were perceived as benefitting from the retirement that all persons would have to prepay. It was not predictable then that those numbers would ever turn upside down. It was not predictable when I graduated HS in 1960, really. If we had invented SS in 2010 with a full retirement age at 66 we would be out of our minds but also clearly adhering to no other idea but that George should be paying for part of my retirement.

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        • Mark:

          Politics doesn’t provide laws that are based on one person’s views, Scott, at least not in this country.

          Someone should tell that to Obama! But snark aside, I get it. And regardless of the intentions at the time, it still strikes me as oddly amateurish economics to think that using tax dollars to pay people to leave the labor force in order to “make way” for other workers is a productive idea.

          It was not predictable then that those numbers would ever turn upside down. It was not predictable when I graduated HS in 1960, really.

          Why not? The trend in the growth of life expectancy had been firmly established since the latter half of the 19th century.

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        • The trend in the growth of life expectancy had been firmly established since the latter half of the 19th century.

          True. But there was actually a belief extant that 70 was IT. Maxed Out. I don’t know why. It was w-w-rong.

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  9. I’m still fascinated how it helps an economy to push out the most productive members of it.

    Is that still beleived by anybody?

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  10. @Troll: “I’m still fascinated how it helps an economy to push out the most productive members of it.”

    I think the idea is that the pie is limited and old people needed to stop eating so young people could eat more! Or something.

    I think it was an argument made by people who were older, sick of working, and wanted the government to cut ’em a check so they could stop. 😉

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  11. @Troll: “Why should I be happy to pay my money to someone else, a stranger, to retire early? Or pursue a career in, say, fecal sculpting?”

    Ewwww. But isn’t the idea more like insurance: you aren’t paying for someone else to retire early, we’re all paying for everybody to retire earning so we can all stop doing productive work as quickly as possible. Because that’s what makes America strong: training until we’re 50 and then retiring.

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  12. @Troll: “This could never happen here.”

    Dude, I’d lay odds that it was happening here to whatever extent technologically and practically possible before Clinton was elected. And has been ever since.

    And what will the police find out that is helpful in preventing crime? Nothing. Given that they find out if someone shows up in an emergency room with a bullet wound already.

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  13. @Troll: “Seriously,was there any doubt?”

    Nope. And this stuff is bizarre, and one of the sorts of things I dislike about partisan politics. Groups coordinate. Like-minded people interact. When they have ideas about how to advance their causes, they share them. When they get angry, they say douchey things about groups of people they don’t like. We are human beings, and it’s human nature. Saying: “No, there’s no Journolist now!” Is like saying, “No, I don’t shit anymore. Or piss. I photosynthesize now. Because I have transcended humanity into God-like status.”

    Remember when Journolist came out, lefties started trotting out dozens of conservative activist list (one distinction being that most of the example lists were lists that the lefties themselves were subscribed to, because they weren’t closed, invite only lists) sand saying: look, not only do they do it, but they are actually the ones *really* doing it. Because Journolist is actually a group of grandmothers swapping dinner recipes.

    The fact is, of course there was a Journolist. Of course there is one now and Klein is on it. And of course they coordinate. Conservatives or Republicans will have similar things, in some form or fashion. Because we’re human beings and we talk to each other and we listen to each other and we share ideas and respond. And then pretend that we don’t, if it looks bad, only those other guys do it. We’re above reproach!

    ” Klein mocks the idea that journalists, who want to be the first to break a story, would coordinate stories. ”

    I like Klein, but he’s simply being dishonest. Journalists back in the day and even presently will all sit on huge stories because the government asks them to for national security (these days, the president has to be a Democrat for that to happen, but still, the point stands).

    If it’s breaking news that means big ratings, then, no, nobody is going to sit on it. That’s not the kind of stories people are talking about coordinating. They are talking about taking a story that makes a certain political party or politician look bad, and getting the word out. Getting more stories out there. Finding a really good angle, and getting that. At that point, it’s less important that I get the byline than that *my idea* gets propagated and every major news outlet is framing that story with the frame that I came up with.

    I think many, many journalists would play that game.

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  14. Why do/did people think SS is pre-paying? It’s not designed that way. Current deduction has always gone to current beneficiaries.

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    • McWing:

      Why do/did people think SS is pre-paying?

      Probably because the benefit is determined as a function of what they paid over their working life, so it seems like a quid pro quo…pay X now and get Y later.

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  15. George – it was actually set up so that people paid in for 6 years or so before anyone drew a bennie. That was sufficient time to create a cushion then [there were so few “survivors”] and that cushion continued to grow, in an accounting sense, for a very long time.

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  16. Is my description of the structure wrong? No snark intended, I thought that’s how it worked.

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    • McWing:

      Is my description of the structure wrong?

      Your description is partly wrong when looking at the program at its inception. For the first 6 years, payments were not used to pay current beneficiaries, because there weren’t any beneficiaries. Then, once benefits started to be paid, only a portion of the total taxes collected were paid out immediately to beneficiaries. Some portion was retained, allowing the “trust fund” to grow each year. But given current demographics, your description is exactly correct.

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  17. I think that description was wrong for a long time. That was not the original design. Later tweaks like raising bennies as fast as CPI and not raising the retirement age anywhere nearly as fast as the life expectancy increased makes it harder to see the design as prepayment because more money goes out than comes in now and the accounting mass of the “trust fund” is dwindling.

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  18. But the system was never designed to hold a surplus right? A surplus would be required so that more would come in then go out. At least to create the illusion of an individualized savings. Otherwise it looks just like a wealth transfer from you to old. The only surplus I’ve ever heard about is the one for the baby boomers that the government wasted.

    Was there ever a time before or since then?

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  19. Ok, thanks Scott.

    Question, without a dedicated account per individual, that was “off limits” to anybody, including the government, how could it ever have been portrayed as, er, individualized?

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    • McWing;

      Question, without a dedicated account per individual, that was “off limits” to anybody, including the government, how could it ever have been portrayed as, er, individualized?

      Well, to be fair to the original idea (of which, as you know, I am not a defender), it was marketed not as a savings scheme but as an insurance scheme, ie old age insurance. And in any properly constructed insurance scheme, not all participants can be economic winners, and indeed most participants must, of necessity, be economic losers. Most people who buy fire insurance on their house will have wasted their money, because most houses won’t catch fire and so will not get any benefit. Most people who buy term life insurance will have wasted their money because they won’t die in the term covered by the insurance, and so won’t get any benefit. This is the necessary nature of insurance, and so no one at the beginning who understood SS as being insurance should have looked at it as some kind of individual savings benefit.

      But as time carried on, and life span increased to the point that it was normal to live well past “old age” as defined by SS, it logically became an expected benefit rather than an unlikely benefit. And, of course, once this occurred any attempt to alter the structure to counter this reality would have been met with political demagoguery about “changing the deal after I paid in all my life”. (Not unreasonably, I might add, since people were compelled to participate, and incorporated it into their long term planning for the future.) Once that became the political narrative, it is inevitable that, in the public mind, the program came to be seen as essentially an individual savings account.

      Another obvious problem with this kind of “insurance” is that insurance is supposed to be protection against an adverse circumstance, ie something that you hope will never happen. And the adverse circumstance necessitating old age insurance is not old age itself, which presumably most people hope to achieve, but is rather a lack of funds/income during old age. But SS as old age insurance kicks in not because of the adverse circumstance, ie lack of funds, but rather because of the desired circumstance, ie old age. In short, unlike any other kind of insurance, this is the kind of insurance that everyone hopes to have to collect some day. That is not a recipe for an economically viable insurance program.

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  20. Thanks! I guess it goes back to your question about longevity trajectory being known.

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  21. “Most people who buy fire insurance on their house will have wasted their money, because most houses won’t catch fire and so will not get any benefit.”

    I don’t agree with this framing. The coverage is the benefit.

    Not getting any benefit would be your house catches on fire and you don’t get paid out.

    Edit: To further clarify, if there was no benefit then most people wouldn’t voluntarily enter into the transaction. It’s important to keep this distinction in mind vis-a-vis a compulsory program.

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    • jnc:

      I don’t agree with this framing. The coverage is the benefit.

      Obviously by “benefit” I meant a financial payout. Of course there is a benefit of some sort (peace of mind), otherwise, as you say, no one would participate. Unless they are forced to, a la Social Security “insurance”.

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  22. Well, if you die at 61 years, 364 days you don’t get a benefit.

    Also, as long as your current on your premiums and the fire falls under the outlined coverage, the insurance company is required by law to pay out. Not so with SS. Can be denied capriciously.

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  23. Let’s get back to calling it a Ponzi scheme.

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  24. “Not so with SS. Can be denied capriciously.”

    No, that can’t be true.

    Like

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