To hear the segment as I delivered it, click http://www.blogtalkradio.com/lesersense/2014/02/10/cbo-controversy-on-jobs-russian-intelligence-intercepts-calls-from-us-diplomats-1
This past week, the Congressional Budget Office released
a huge 182 page report detailing their analysis of the future of the economy
and the budget for the next ten years from 2014 to 2024.
What I said just there is probably mystifying to most of
you because the only thing that seemed to be reported in the news is that the
Congressional Budget Office said something about Obamacare that affected around
two million jobs.
No, the report was meant to cover every aspect of the
economy and budget and give a ten year outlook. I am going through the report
and hope to have more interesting tidbits for you during my next few shows.
There is a lot to take in.
I am going to ask you to stay with me here because the
report is really wonky and full of somewhat dry details. I am going to try to
address what the report said and the reaction to it by Republicans a couple of
ways that I think you will enjoy it’s just going to take a little bit of time
to get there.
What immediately made headlines is a suggestion regarding
two million jobs and Obamacare. Now, the first thing you have to understand is
that where this is all detailed is appendix C of the CBO report in question,
titled Labor Market Effects of the Affordable Care Act: Updated Estimates. This
section is eleven pages long and divided into an Overview where the report
first explains what it thinks is going to happen, and two major subsections,
one called “effects on the Supply of Labor” and another titled effects on the
Demand for Labor where it painstakingly details the reasons why it thinks the
things outlined in the Overview will happen.
The Supply of Labor is of course us the workers and
whether we want to work and how much. Demand for labor refers to whether
businesses out there want to hire.
In the overview, it talks about how quote
the CBO estimates that the Affordable Care Act will reduce the total number of hours worked, on net,by about 1.5 percent to 2.0 percent during the period from 2017 to 2024, almost entirely because workers will choose to supply less labor—given the new taxes and other incentives they will face and the financial benefits some will receive.
That is a verbatim read from the report. So right off the
bat, the CBO’s report says that it is talking about workers choosing to work
less, not businesses offering fewer jobs and it as much as says that this
accounts almost entirely for the reduction in hours and jobs.
Now, I want to talk about what that means and whether I
agree with it or not and I will get to that, but first I want to address what
happened when this information came out, namely, the mischaracterization of
this information in Republican and Conservative circles and failure of huge
segments of the press to report this properly. Let’s get started with
Republican Senate Minority Leader Mitch McConnell. Certainly we can have the
expectation that the Senate Minority Leader has a staff that can get him the correct
information on things right? Well, let’s hear what he said:
<I play a clip by Sen Mitch McConnell on
the CBO where he talks about 2million jobs being lost>
Almost everywhere you went where a Republican or
Conservative elected official or members of the press was speaking you heard
something similar to what Mitch McConnell just said. I can give a lot of
examples, but one of them that stands out is The Washington Free Beacon, a
conservative publication started in 2012 with ties to Tea Party organizations
like the Center for American Freedom which has William Kristol on its board,
this publication deserves special mention for putting out no less than four
misleading videos on this. Here is part of the audio of just one of those four
videos:
<I play a clip from the Washington Free
Beacon where they have several people talking about jobs being lost>
Even supposedly non-partisan members of the media rushed
to make statements that were completely unsupported by the document the CBO put
out. Talking Points Memo put out an article where they showed Tweets by several
high profile journalists that fell into this category. For instance
Chuck todd, the Chief White House Correspondant for NBC
news tweeted:
CBO essentially reaffirms GOP
talking points on health care. Says it will cost jobs, feel as if it raises
taxes and contributes to deficit
Ben White from Politico tweeted:
Devastating #CBO report:
Obamacare will cost 2 million full-time jobs over next three years.
The ability of our media here in the US particularly
those conservative aspects of it to put out misleading information has really
become breathtaking. Jon Stewart did a hilarious piece on this where he showed
clips of a number of Republican elected officials repeating the incorrect
information about job losses and then played this piece of congressional
Democrats asking the head of the CBO Mr. Elmendorf some questions about it:
<Jon Stewart Questions Elmendorf who
reiterates jobs are not being lost in his scenario, people are choosing to work
less>
So not only is the head of the CBO, Mr. Elmendorf
refuting what Republicans are saying about his report, he basically says that
Obamacare is going to cut the deficit and has not caused employers to cut jobs
or reduce hours. The funny thing is, there is stuff worth discussing in this
CBO report regarding jobs and Obamacare. To get us started on those things,
here is some audio from an appearance I did on Thursday on Your World with Neil
Cavuto to discuss it.
<I reiterate that the 2 million refers
to people deciding to work less not that people are being let go and I talk
about how I don’t agree with the CBO’s analysis because in my experience people
are holding onto their jobs and hours out of fear after the economic downturn>
That’s my main contention with this small piece of the
CBO report and that is that I don’t think it captures how unwilling people are
to give up their jobs right now even folks who are deeply unhappy with their
current job. People are not quitting their jobs and they are not willingly
giving up hours, and I don’t know if there is a way for the CBO to factor in
angst like that in their analysis. That’s why I think they are wrong. If you
are out there in the workforce, I think you know what I am saying is true.
People are generally not leaving jobs of their own free will.
But let’s assume the CBO is right for a moment. Obamacare
allows everyone to get good and affordable insurance outside of an employment
situation. CBO is correct about that. CBO then says that because of that, some
folks will work less or leave their jobs because of that for a variety of
reasons.
One of those reasons is that you have a two parent family
with both parents working and one will now spend more time at home taking care
of the kids. That is one of the situations contemplated by the CBO.
Another is that someone will leave their job to start a
business. Now you might ask what Obamacare has to do with that. I’ll explain.
Let’s say that you are also one of two working parents
with children. Let’s say you are a plumber or a carpenter or a computer
programmer or an accountant or one of a lot of other jobs working in a medium
sized firm that provides health insurance and because of this you are the
reason your family has health insurance. If this was before Obamacare and you
quit your job to try to start a business, your entire family would lose their
health insurance. That is a huge disincentive to start your own business
particularly if you or another member of your family has health issues.
But now with the Affordable Care Act, you can leave your
job and start your own carpentry or plumbing or programming or accounting
business. You can afford health insurance for your family without having to
continue to work for someone else. That is a great thing. That encourages good
risk taking to create new businesses. In short, Obamacare supports capitalism.
That’s the funny thing about social programs. Social
programs plus capitalism does capitalism better than capitalism by itself.
And that a the succinct way of describing the Liberal and
Progressive position on economics in a nutshell.
We’ll be right back.
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