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The Agenda

NRO’s domestic-policy blog, by Reihan Salam.

Today’s Policy Agenda, June 20



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Editor’s note: Andrew Smith is an undergraduate at Furman University; he’ll be contributing to the Agenda on a semi-regular basis in the coming months. This will be a regular feature recapping the big policy news and stories of a given day, and what they mean for a conservative audience.

The human costs of unemployment are huge. It’s why conservatives care so much about encouraging work.

Ben Casselman has a piece in FiveThirtyEight comparing the lives of the employed to the unemployed — how they spend their time, the degree of social isolation they experience, etc. The huge disparities are a good reminder why, on issues from the minimum wage to Obamacare, conservatives care about “inclusion” and often have labor-market outcomes at the front of their minds. Not only is having a job essential to staying out of poverty and to developing the skills needed to rise up the income ladder, work helps connect individuals to new social networks and provides an opportunity to gain what Arthur Brooks calls “earned success,” two building blocks of a fulfilling life. 

Casselman:

The unemployed have higher rates of depression, obesity and suicide. In interviews, they frequently report that the social and emotional impacts of joblessness — isolation from friends, the loss of a daily routine, feelings of uselessness — can be as hard as the financial toll. Overall, the unemployed spent more time sleeping, watching television and taking classes than the employed, and less time eating out and going to parties. . . . Other activities show the isolation of unemployment: Unemployed single moms talked to friends and family on the phone less often than those with jobs, and they spent 15 fewer minutes per day socializing and going to parties.

Cutting tax rates: good idea, not conservatives’ top priority.

Responding to Kimberly Strassel’s criticism of the Room to Grow agenda, Michael Strain of AEI argues in the Washington Post that Strassel’s emphasis on “pro-growth tax reform” may be misplaced because in 2014, unlike 1986, large cuts in the income tax’s top rate won’t necessarily mean a big boost to the economy. This shouldn’t be misinterpreted as Strain dismissing the value of tax cuts – in politics, you have to set priorities. The better use of the Right’s political capital and budget space, in Strain’s view, is to pursue growth-friendly, micro-type policies targeted at our most pressing problems: long-term unemployment and the struggles of low-skilled, single males in the labor force.

Both the human and moral costs described in the Casselman piece above and what we know about the economic costs of long-term unemployment compel policymakers to focus their attention on the labor market crisis for at least as long as the labor force participation rate graph looks like this:

Expanding the EITC, enacting relocation vouchers, reforming the disability program, cutting the payroll tax, and replacing Obamacare with a work-friendly alternative all seem like policy initiatives that could better address our immediate challenges than further reducing top tax rates that are about half the 70 percent they were when Reagan took office.

The geography of economic growth: Some parts of the country are booming.

Tom Gray and Robert Scardamalia of the Manhattan Institute have released an interesting study comparing the twenty best and worst-performing cities during this recovery. On one level, it was just fascinating to read which metropolitan areas, like San Jose and Nashville, had experienced tremendous growth after the recession and which industries and characteristics were key to their success. For example, the leading cities are home to more large companies and college graduates, while struggling cities were hit particularly hard by the housing crash and have economies that depend much more on government spending. It’s also worth emphasizing that different areas experience the economy in such widely different ways, which we often lose sight of in national debates like the federal minimum wage.

Further, Strain’s idea of relocation vouchers that help struggling workers move from high unemployment areas to low unemployment areas makes sense in the abstract, but when you see the huge gap between how an average worker experiences economic life in Las Vegas and in booming Houston, the case seems stronger on the grounds of both fairness and economic efficiency.

Why deregulating health care is a good idea, Voxsplained.

This video from Vox presents one of the few policy proposals that could unify Matt Yglesias and libertarian populists: ending restrictions that insulate doctors from the competition of nurse practitioners. These rules are the epitome of what’s wrong with a massive regulatory state. They drive up the costs of medical services for everyone in order to protect the interests of a politically powerful constituency. It’s generally accepted that one of our biggest challenges in the coming decades will be controlling health-care costs; we can’t afford to ignore the low-hanging fruit of supply-side reforms.



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