Democrats Opposed It, Republicans Passed It, BUT It’s Created Jobs, So Obama’s Taking Credit
You’re gonna hear all about how Obama magically created jobs, but what you won’t hear is how it happened – it’s because Republicans actually pushed a free market solution to unemployment for once.
In the aftermath of the financial crisis, Congress passed the Emergency Unemployment Compensation Act of 2008. The new law dramatically extended the duration of unemployment benefits, from a typical length of 26 weeks to as many as 39.
The American Recovery & Reinvestment Act of 2009, commonly known as the “stimulus bill,” further expanded these benefits, such that by the end of 2013 the average duration of unemployment benefits exceeded one year. Furthermore, ARRA expanded eligibility for unemployment benefits to part-time workers and exempted the first $2,400 of unemployment benefits from taxation. Classical economists criticized these expansions, arguing that they would encourage more people to stay out of the workforce. But President Obama pushed for the continuation–and expansion–of extended benefits throughout his first term.
Here are the Democrats whining about it:
— The Democrats (@TheDemocrats) January 6, 2014
More from Forbes:
Finally, after years of slack labor markets, in July 2013 the unemployment rate fell below 7.5%. In December 2013 the House of Representatives—now controlled by Republicans—allowed the benefit extension to expire, arguing that the crisis of the Great Recession had passed.
Democrats whined and whined, led by the whiner-in-chief:
30: Days until federal unemployment benefits end if Congress does not act. #WeCantWait
— Barack Obama (@BarackObama) December 3, 2011
And yet now, they’re taking credit for the jobs that were caused by legislation they opposed:
….the predicted apocalypse never occurred. Instead, the unemployment rate dropped from 6.7% in December 2013 to 5.6% a year later, despite a drop in the growth of aggregate productivity. The new NBER paper—authored by economists at the University of Oslo, Stockholm University and the University of Pennsylvania—finds a strong relationship between the drop in unemployment benefits and the rise in employment.
Forbes goes on to explain the methodology behind the findings, and it’s pretty convincing:
The authors compared neighboring counties in adjacent states, and found that states that had the shortest duration of unemployment benefits experienced the strongest labor market recovery. “A 1% drop in benefit duration leads to a statistically significant increase of employment. 1.8 million jobs were created in 2014 due to the benefit cut.” Those 1.8 million jobs represent 1.2% of the U.S. labor force: correlating quite closely to the drop in unemployment over the past year.
But you won’t hardly hear it because Republicans are just awful at messaging, and the media won’t let the message get out anyway. But at least you and I can toast to a win for the free market.