Like the friendly stranger in the black sedan, government is often never screwing you more dishonestly than when it offers you something free. Take, for example, the State Senate’s passage of Assembly Bill 898, which is in the process of cruising to Gov. Doyle’s desk as the Wisconsin Family Jobs Act. Under the bill, the state government will pay companies a direct subsidy to hire new workers. The bill is so extravagant, in fact, that it pays a sum equivalent to the minimum wage for six months to any company that hires someone. By rendering new employment essentially free, Family Jobs actually does ensure the temporary creation of jobs, unlike unemployment insurance — which has consistently managed to do the opposite.
But when the devil isn’t in the details, he’s in the future. The act assumes as its premise that an upturn in economic activity is nearing — an unlikely assumption at best. If the economy does not improve by the time the subsidy ends, the same shock to the anecdotal working family will only be held off for later. And as the federal government is forced to get increasingly creative in order to prop up the impression of fiscal solvency, the state will no longer be able to look to the printing presses to perpetuate its own shallow pretensions of responsibility.
The funding for the bill, which comes from the federal Temporary Assistance to Needy Families program, would have been better used to ease the phasing out of the state’s horribly overstretched unemployment insurance system. As of November, the unemployment fund alone was projected to run a deficit of 2.8 billion dollars. And with some wrangling, it’s feasible the state could have used this money to render a future cutting of benefits — an inevitability — somewhat more palatable. Instead, a brilliant new method of lying to people about their economic prospects was devised by people whose entire jobs are premised on the idea that they know better than you.
Yet, on the other side of the depressing coin, the state was right to ignore the even dumber conduct espoused by those such as current gubernatorial frontrunner and moron extraordinaire Scott Walker. Walker and his tea-partying amigos, who get their jollies applying the budgetary justice of Rambo to mental patients and homosexuals, forget that if ex-plumbers don’t get that job money, a death panel run by Jeffrey Dahmer will. And while the tea-partiers may have grasped the basic principle that individuals spend their money better than government, they seem to willfully ignore the corollary: even if you refuse free income, your competitors won’t.
But Wisconsin’s opponents of TANF do have a point, even if they can’t see it. The state will undoubtedly run another whopping budget deficit. Unemployment insurance will compose a massive — and unsustainable — part of this. And like the 35-hour workweek, interest rates of zero and the criminal misnomer “fun”-sized, the party isn’t worth the habits it can form. Straightforwardly paying a person’s salary for six months isn’t job creation. It’s just expensive, short-term lipstick for an outrageously hideous pig. When the subsidy ends and companies are forced to engage in further layoffs, the fund will once again be under the same crushing burden. And, much to the dismay of those whose ability to avoid unemployment is based solely on the presentation of a good argument to voters, that same nasty shock is well on its way, just six months and a slight up tick in economic activity late.
Refusing federal money doesn’t help anyone. But our overseers would do well to recognize that gradual cuts in unemployment insurance will, with some agony, improve the economic situation they have heretofore been so intent on exacerbating. It doesn’t need to be the oversimplified war on spending that those goons who dress up as Thomas Jefferson so wantonly push for. There is nuance, and TANF funding could have given the Legislature the time it needed to discover it. But the longer the politicos wait, the uglier reality will get. And sooner or later there’s going to be an awkward morning after in the unemployment line.
Sam Clegg ([email protected]) is a junior majoring in economics.
