After Santelli and Cramer, it looks like the next CNBC on everyone’s “wanted” list is Erin Burnett. Arianna Huffington trashed her the other day, and now Adam Green, again over at HuffPo, is lashing into her.
His complaint: Some comments Erin Burnett made wondering whether unemployment benefits (i.e., paying people for not working) makes the problem worse.
How outrageous, says Green! She should be bashing CEOs, he says, not saying things that could damage the working man.
But wait, Burnett’s concern is legitimate! In fact, economists suggests she’s right.
Eric Falkenstein summarized some recent work:
For example, Bruce Meyer (“Unemployment insurance and Unemployment Spells“) found that higher benefits reduce the probability that insured unemployed workers will leave unemployment. He did this by measuring the probability is measured as a ratio of newly employed workers at the end of the week to those unemployed at the beginning of the week. He finds a 10% increase in the benefits decreases this probability by 5.3%. A paper by Stephen Nickell found that looking at US and Europe from 1983-96, those 8 out of 15 countries with an unemployment rate 120% of the US had relatively generous unemployment benefits. He notes that generous unemployment benefits decreases the willingness of the unemployed to find employment, and increasing the duration of the entitlement increases long-term unemployment. In sum, raise unemployment benefits, expect a higher unemployment rate.
Of course, actual data probably doesn’t interest Green. He’s more interested in arguments like, “If you’re against unemployment benefits, go say it to some laid-off workers trying to feed their families.” You heard that same thing after Santelli’s rant: “If you hate mortgage mods, go tell it to someone who just lost their house.” Sure, it would be difficult to do that. But the truth isn’t define by what’s easy to say. And playing the emotion card won’t help us come up with good solutions.
Again, this has nothing to do with whether she’s right or wrong. We’ll reserve judgment. Our interest is in ensuring that media figures are allowed to talk about economics in an honest way, rather than a feel-good way. If you’re only allowed to take politically correct views on policy, while shunning heterodox views, there’s no chance of crafting policy that will do any good.