Certainty and Uncertainty

I can’t say I find the recent editorial in the Wall Street Journal particularly satisfying. For one thing I think there’s an the implicit conflict between this:

The economy has been growing for at least six months, amid high productivity growth and rebounding corporate profits, yet employers still shed a net 85,000 jobs in December.

and this:

Congress hasn’t helped this trend by reducing the incentive to job hunt by extending jobless benefits—another example, like the minimum wage, in which Congress does tangible harm in the name of compassion

That the minimum wage actually does measurable harm is controversial—it’s supported by the theory but it’s unclear whether it’s supported by empirical evidence. Similarly, I’d like to see the real evidence that extending unemployment benefits does “tangible harm”. I’ve questioned the practice myself and I’d genuinely like to know what the facts are.

Are people going on the dole because it’s easier than working? Or are there just no jobs available? Should we be encouraging economic migration to find employment? Or will that only transfer mass unemployment from one geographic region to another?

I think that the stronger part of the editorial is here:

We can’t blame employers for their caution. With so much policy uncertainty out of Washington and the state capitals, no one can be sure what they will pay for energy (rising oil prices, cap and trade) or new regulation (antitrust), how high their taxes will rise, and how much each new employee will cost (health care). In this kind of world, employers will wait as long as possible to add new workers.

That both stands to reason and is substantiated by my admittedly anecdotal experience.

I think we need to react to disasters whether they’re natural disasters, economic ones, or some other kind with mercy tempered with prudence. In the aftermath of San Francisco earthquake the U. S. Army (without authorization from higher up) extended shelter to those made homeless by the quake. Semi-permanent shelters were erected and, indeed, they were occupied for several years after the disaster. However, shortly after the quake the army began charging rent to its new residents and ratcheted the rent up on a published and predictable schedule, thereby discouraging people from taking free or cheap housing on the army’s tab as a permanent fact of life. Had they not done so I have little doubt we’d see the fifth generation still living in the temporary disaster shelter that the army provided.

What we need are responses to problems that are simultaneously more merciful and more thoughtful, prudent, and consistent with human nature than the ideological and political solutions that Congress and the federal bureaucracy will inevitably seize upon. How we get from here to there is unclear to me.