High employment costs and extended benefits contribute to joblessness.
Time was when you could rely on taxes to be the topic come mid-April. No longer. This year it's jobs, jobs, jobs.
Democrats want to extend expiring unemployment insurance, in the spirit of Franklin Roosevelt. Republicans are muttering but going along.
The emphasis on extension is counterproductive, because it overlooks the problem that is making it hard for the jobless to get work in the first place.
Part of the problem is the relationship between the cost of hiring for employers and the cost of being unemployed for workers. By making hiring expensive through mandates such as health care, the administration is discouraging hiring. By extending benefits for the jobless, the same government is making unemployment less painful -- cheaper -- for workers.
The combination sustains unemployment at higher levels, not lower.
Many industries are now recovering. But many companies are finding ways to do so with fewer workers. This isn't a general recession any longer. It is becoming a jobs recession where the incentives for employer and employee are out of whack.
The ultimate evidence here is from the 1920s, when the Labour Party first came to power in Britain. Labour gave unions power to demand higher wages and created unemployment benefits. The result was the mother of all jobless recoveries. For almost two decades, from 1921 to 1938, British unemployment averaged 14 percent. For two decades Britons talked of the tragedy of "idleness" and the "dole."
"Dole" actually became a pejorative. You don't hear any leader in Washington saying "2010, time for a dole."
One New Deal politician who grasped what was happening in Britain was Roosevelt. He appalled his progressive colleagues by disparaging the dole whenever he could. Rather than pay the unemployed, Roosevelt preferred creating jobs through the public sector.
Still, Roosevelt replicated other British errors. FDR signed laws that put upward pressure on wages, leading to slower hiring.
More recently the U.S. repeated the pattern in the Aid to Families With Dependent Children program, which made life worse for those families. They never got work. "Welfare," the word we used for AFDC, likewise became stigmatized. Bill Clinton signed the law that reformed the program.
Lawmakers now are reversing that progress, perhaps without being aware of what they're doing. Eventually, they will understand. And eventually those phrases we utter now -- "insurance extension," "mandatory health care at the workplace" -- will also be dropped from the language in shame.
But by then the damage will have been done.
Amity Shlaes, senior fellow in economic history at the Council on Foreign Relations, is a Bloomberg News columnist.
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