The Allure of Government Cheese

Michele Malkin becomes a lightning rod on whether unemployment benefits drive up unemployment

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Do unemployment benefits contribute to unemployment? That's what Michelle Malkin argued on Sunday's This Week program, calling it "an incentive problem" and citing Clinton economic advisor Larry Katz several times. "If you put enough government cheese in front of people they are just going to keep eating it," she said. "It was Larry Katz, who's a chief labor economist under the Clinton labor department who came out with a study and there are a lot of these economists who say this that if you keep extending these 'temporary' unemployment benefits you're just going to extend joblessness even more."

That is pretty much the opposite of Katz's position, the economist himself told the New York Times the day before:

Traditionally, many economists have been leery of prolonged unemployment benefits because they can reduce the incentive to seek work. But that should not be a concern now because jobs remain so scarce, said Lawrence Katz, a labor economist at Harvard.

For every job that becomes available, about six people are looking, Dr. Katz said. "Unemployment insurance gives income to families who are really suffering and can't find work even if they are hustling to look," he said.

Unfortunately for Malkin, the liberal bloggers who clash with her so often are really seizing this moment. Randy Paul of Beautiful Horizons called her "a moron," Huffington Post's Jason Linkins described Malkin's fellow panel members as staring "like she was INSANE," and Steve Benen wrote, "The blame, in a case like this, goes to the ABC News producer who thought it was a good idea to have Malkin on in the first place."

But what's this? Paul Krugman has a blog post titled "In Defense of Michelle Malkin." This is what we might call The Sarcasm of a Liberal, because Krugman does not so much defend Malkin at all. He uses her mistake to bash Univerity of Chicago economist -- and colleague at The New York Times -- Casey Mulligan, who made a similar argument. "Ms. Malkin's theory of unemployment is no crazier than what's coming out of some of our leading universities," Krugman wrote.

Canard aside, Matthew Yglesias took Malkin's point seriously, conceding that "the availability of unemployment benefits has some disemployment effect" and that cutting them would "somewhat hasten the pace at which people become willing to accept jobs at market-clearing (i.e., low) wages." But Yglesias countered that the timing is wrong:

But this is primarily relevant when unemployment is low. [...] At the moment, we're really still in a situation where we should be all about avoiding tipping points that push us toward a truly bleak macroeconomic picture, and Unemployment Insurance and other safety net measures are an important part of that.
This article is from the archive of our partner The Wire.