Free Markets, Free People

Daily Archives: June 9, 2011

Unemployment: The real numbers and the real problem

Not only the real numbers, but the real reason:

Labor-force participation, the share of Americans who are working or looking for jobs, has fallen to its lowest percentage since the mid-1980s. That’s partly because people have grown discouraged about their ability to find jobs and have given up looking. With those workers on the sidelines, the unemployment rate has been lower than it otherwise would be.

The official unemployment rate hit 9.1% in May. Including all of those who had part-time jobs but wanted to work full-time as well as those who want to work but had given up searching, the rate was 15.8%.

Of course Dale has been saying that for some time with his own calculations.   Discouraged workers, however, may also have taken another option – retirement – since it is the age of Baby Boomer retirement.   So it’s not clear yet how many of those who were workers and lost their jobs are “discouraged” workers or retired workers.  Bottom line, though – a lot of people have seen their lives drastically changed.

Here’s the inherent problem in long-term unemployment:

[T]he odds of finding a job steadily decreased the longer someone was out of work. Some 30% of Americans who had been out of work for less than five weeks found new jobs last year.

Those odds deteriorated for the long-term unemployed. Of those who had been unemployed for more than six months, slightly more than 10% found new jobs. Nearly 19% dropped out of the workforce.

The problem endures this year: As of May, 6.2 million had been out of work for more than six months and more than 4 million haven’t work in more than a year.

And the outlook, at least at the moment, doesn’t look like it will change anytime soon.

This is Obama’s political Achilles heel.  This is what gets incumbent presidents an early retirement.  I’m not hoping that this persists through the 2012 election, I’m suggesting that there is nothing to indicate it won’t.  

That is Obama’s challenge.  And it is also the GOP’s attack line.  This is Obama’s record – something he has to run on for the very first time.  Time to begin pointing it out now.

~McQ

Twitter: @McQandO

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Is ObamaCare doomed?

Ihe 11th Circuit Court of Appeals, based in Atlanta, opened its session examining the federal healthcare law recently passed by Congress and derisively known as ObamaCare with these words from its Chief Judge Joel Dubina:

"I can’t find any case like this," Dubina said. "If we uphold this, are there any limits" on the power of the federal government?

That was followed by:

Judge Stanley Marcus chimed in: "I can’t find any case" in the past, he said, where the courts upheld "telling a private person they are compelled to purchase a product in the open market…. Is there anything that suggests Congress can do this?"

Now frankly, I think some people expected a much more receptive audience among the judges since two of the three are Clinton appointees.  Dubina is a George H.W. Bush appointee. What both Dubina and Marcus make clear is this is a case – or at least certain aspects of it are – without precedence.

And we all know how federal justices rely on precedence to guide their rulings.  I’m encouraged by those opening remarks.  The third judge on the e judge panel repeatedly asked the lawyers about the possible effect of striking down the mandate while upholding the rest of the law.

The administration, represented by U.S. Solicitor Gen. Neal Katyal argued the following about the individual mandate:

Katyal argued that healthcare was unique and unlike the purchase of other products, like vegetables in a grocery store.
"You can walk out of this courtroom and be hit by a bus," he said, and if an ill or injured person has no insurance, a hospital and the taxpayers will have to pay the costs of his emergency care.

Katyal argued that Congress could reasonably decide that because everyone will probably need medical care at some time in their lives, everyone who can afford it should pay part of the cost. And he said the courts should uphold the law under Congress’ broad power to regulate commerce in this country.

Congress could clearly require that a person who shows up at a hospital without insurance buy it on the spot, he said, and requiring the purchase in advance should not be the decisive difference.

What, of course, is not reasonable is Congress deciding how one must “pay part of the cost” or compelling them to do so under the auspices of the government.  It is the individual’s responsibility to pay such debt as in all other areas of life.  But, argues the administration:

Parts of the overall law should still survive, said government lawyer Katyal, but he warned the judges they’d make a "deep, deep mistake" if the insurance requirement were found to be unconstitutional. He said Congress had the right to regulate what uninsured Americans must buy because they shift $43 billion each year in medical costs to other taxpayers.

So, the case boils down to $43 billion a year being the reason for a gigantic intrusion in the market by the government which claims it will do a better job of holding down costs via mandating coverage.  This is the same government which suffers $60 billion a year in Medicare and Medicaid fraud (I’d call that some serious “shift[ing]” of costs to other taxpayers, wouldn’t you?

Anyway, back to the story – POLITICO is the only news organization that seemed to find some hope for the administration:

The judges’ questions were mixed enough to give encouragement to both sides in the oral arguments in the multistate lawsuit, the most significant of the legal challenges against Obama’s health care overhaul.

But then, immediately said:

But supporters of the health law cringed as the judges spent a significant amount of time questioning both sides over how much of the law they would have to void if they struck down the most controversial provision at the center of the suit: the requirement to buy insurance.

And that brings us back to our old friend, “severability”:

“The government would obviously be somewhat troubled by the questions about severability, which is something that the court only reaches if it were to invalidate one of the provisions,” said Walter Dellinger, a former acting solicitor general who wrote a brief defending the law for Democratic members of Congress.

This particular case of the many pending is probably the highest profile case as it was brought by a collection of 26 states.

Regardless of how this turns out, however, I think it is pretty clear this one is headed to SCOTUS for final disposition.  However, the rulings of the judges involved will indeed be scrutinized by the justices in Washington DC when the time comes.   If they find against the administration, I think on has to consider such a ruling, if founded on good legal ground, may create the precedent that SCOTUS needs to follow suit and throw the individual mandate (and thus the law for all intents and purposes) out the window.

~McQ

Twitter: @McQandO

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