February 6 2014

PowerLine: Theory of the New Leisure Class

PowerLine

Thorstein Veblen made a name for himself with the publication of Theory of the Leisure Class in 1899. In a democracy, how can the rich distinguish themselves? Veblen came up with the notion of “conspicuous consumption” geared to the display of social status. The notion has long survived Veblen and the evidence for it seems to be all around us. (Digression: Charlotte Hays works the other side of the street, so to speak, in her recent book When Did White Trash Become the New Normal? Hays gave a précis of her thesis in this New York Post column.) Veblen’s notion of “conspicuous leisure” hasn’t caught on to the same extent as “conspicuous consumption,” but it was the companion to it.

White House economic adviser Jason Furman seems to be auditioning to succeed Veblen in spinning the devastating CBO analysis of Obamacare in Budget and Economic Outlook: 2014-2024. The Washington Post gives a straight news account of the report here; the New York Times works its story to support Furman here.

The Free Beacon reports on Furman’s impromptu spin yesterday:

Chairman of the White House Council of Economic Advisors Jason Furman contended Obamacare could still make individuals better off even if it incentivized them to work less Tuesday in the White House press conference. A CBO report released today indicated Obamacare will reduce the number of full time workers by 2 million over the coming years.

The Harvard educated Furman used a hypothetical of an individual who may elect to work 35 hours a week instead of 60 hours a week to garner a greater subsidy or be eligible for Medicaid, thus purportedly making that individual better off.

Fox News reporter Ed Henry challenged Furman, asking how someone could be better off if changes in the Affordable Care Act would make it appealing for an individual to effectively cut their income in half. Furman deflected, telling Henry he would not prescribe the most rational economic course of action for every single worker in America.

However, Furman argued by definition if someone makes a decision with respect to lowering their weekly hours for the purposes of attaining government assistance that person could not be worse off. “There’s no way you have a set of stuff; you can make exactly the same choice you made before, and now, I give you something else, that you could be — that you’re worse off as a result of that,” he said.

Henry interjected, asking Furman how introducing an incentive for some people to work less is not tantamount to inducing those people to become less productive.

Furman, seeming to sense he was cornered, pivoted to the administration’s talking point that Obamacare in aggregate actually increases economic productivity.

The Free Beacon posts the transcript of Furman’s exchange along with video here. For those in need of a cold splash following Furman’s 100 proof spin, apply John Podhoretz:“Congressional Budget Office sends death blow to Obamacare.”

JOHN adds: See also my analysis of the CBO report and the administration’s attempt to spin it, here.

 

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