If Barack Obama's legacy on economics is that the jobless rates are to be raised permanently it won't be an accident. It's policy!

President Obama has presided over a terrible jobs market. Unemployment is more than two-percentage points higher today than the White House claimed it would be if the so-called stimulus was enacted.

Even more worrisome, the employment-population ratio seems to have permanently fallen, which is bad news for economic performance since our output is a function of how much capital and labor is being productively utilized.

So what’s the response from the Obama Administration? Well, they want to further subsidize people for not working. I’m not joking. Here’s some of what has been reported by the Huffington Post.

"The Obama administration on Friday came out strongly in support of extending long-term unemployment insurance past its current expiration date. …”We have always done so when unemployment is this high and would make little sense to fail to do so now when we are still facing the burdens of the worst downturn since the Great Recession,” [Obama economic adviser Gene] Sperling said. “It is high bang for the buck for the economy, reduces poverty and helps workers who lost jobs due to no fault of their own get back on their feet.”

But is it true that providing more unemployment benefits is an approach that “helps workers”? In their academic writings, both Paul Krugman and Larry Summers have pointed out that you get more unemployment when you subsidize joblessness.

And research by Professor Casey Mulligan also has found a very clear link between government benefits and unemployment. If you’re still not convinced, here’s some more empirical evidence showing that you get more joblessness when you subsidize leisure.

And now we have even more evidence showing that it doesn’t make sense to make leisure more attractive than employment. Four economists conducted some new empirical research to look at how unemployment benefits impact economic performance in the labor market. First they explain the theoretical concerns.

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