The Outstater

May 7, 2020

OUR ADJUNCT, MARGARET MENGE, hit on an interesting story this week. The Indiana Department of Workforce Development, the people responsible for making insurance payments from the money collected by force from Hoosier paychecks on the rationale that it would be available in an emergency, seem unable to fulfill that promise.

“The thing about unemployment compensation that a lot of people sort of know, but sort of forget, is that it’s not welfare. It’s insurance, with the premiums paid by every employer in the state,” Menge writes.

Some of you might wonder why that is news; government always fails us to some degree. Others, though, can be excused if they more or less expected government, state government anyway, to keep a simple promise of safeguarding communal savings to prevent people from starving when they lose their jobs through no fault of their own.

Economists have a name for that. It is “self-obviating idealization,” the observation that people assume away the very problem the state is supposed to be solving. That is, it is assumed that the Indiana Department of Unemployment Insurance is in some way insuring the employment (or employment income) of Indiana citizens.

“What we’re observing during the coronavirus timeline is that most people are making exactly these ungrounded, unjustifiable assumptions about the state and its policy tools,” writes David D’Amato for the American Institute of Economic Research. “They are laboring under the delusion that the state is a kind of godlike actor, positioned above and outside of human beings, their societies and their relations. This is a way to avoid the felt psychological distress that would come from confronting some of the cold facts about the situation at hand.”

D’Amato goes on to say that in fact: 1) the state is made up of human beings who are no less fallible, selfish or prone to error than anyone else; and 2) we actually know very little about the attributes of most problems the state has promised to solve, e.g., a new and mysterious virus coming out of China or the unemployment that government itself in part ordered.

So when the Commissioner of the Department of Workforce Development announces proudly that his agency fielded over 1.1 million phone calls last month, he is being honest and forthright, even transparent. Unfortunately, it doesn’t have much to do with the fact that an uncounted number of Indiana citizens haven’t gotten unemployment checks more than four weeks after they applied, or why so many of us, including our reporter, cannot get through to an amply paid staff on the phone.

Nor does it explain why our representatives in the Legislature blithely handed the commissioner or anyone else in Indianapolis the power to extract money from Hoosier businesses on what turns out to be a false promise, one that anywhere outside of government would be understood as a fraud. — tcl


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