“[C]onstant political meddling in labor markets,” says Richard Epstein, “makes it hard for individual firms to figure out the risk of hiring new employees.”:

Yet on this issue [New York Times columnist Paul] Krugman and the Democrats adopted a weirdly partial analysis. Transfer payments are in, but any kind of serious structural reform is out. Thus constant succession of short-term fixes drains resources from the private sector, while postponing any long-term rationalization of labor markets that might get some unemployed people back to work.

These ad hoc interventions are justified on the some macroeconomic hunch confidence that any dollars paid out in transfer payments will be used to boost up current demand. But even Keynesians aren’t microeconomic seers. No one knows how much money will go in that direction: Some recipients of unemployment benefits will use their checks to pay off past bills or save for future major expenses. The Bush administration used a similar model to promote its one-time $500 stimulus plan, which turned into one of 2008’s many spectacular busts.

The larger lesson here is that there is enough uncertainty in the world already. What the country needs now is stability of expectations, not erratic government behavior. Constant stop/go traffic may put a short-term band-aid for the unemployed, but the overall Democratic game plan only prolongs the agony. Try a different approach—open markets, low flat taxes and freedom from Krugmaneseque envy and resentment.