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Sunday, March 07, 2010

Stepping on your Pee Pee

Paul Krugman takes note in his New York Times column of what he calls "the incredible gap that has opened up between the parties":

“Today, Democrats and Republicans live in different universes, both intellectually and morally.”

"What Democrats believe," Krugman says, "is what textbook economics says":

But, here's what Senator Jon Kyl of Arizona, the second-ranking Republican in the Senate, had to say when defending Senator Jim Bunning‘s recent filibuster of a one month extension to unemployment benefits:

“Unemployment relief doesn't create new jobs. In fact, if anything, continuing to pay people unemployment compensation is a disincentive for them to seek new work.’"

Krugman scoffs: "To me, that's a bizarre point of view--but then, I don't live in Mr. Kyl's universe."

So, what does textbook economics have to say about this question? Here is a passage from a textbook called "Macroeconomics":

Public policy designed to help workers who lose their jobs can lead to structural unemployment as an unintended side effect. . . . In other countries, particularly in Europe, benefits are more generous and last longer. The drawback to this generosity is that it reduces a worker's incentive to quickly find a new job. Generous unemployment benefits in some European countries are widely believed to be one of the main causes of "Euro sclerosis," the persistent high unemployment that affects a number of European countries.

It turns out that what Krugman calls Sen. Kyl's "bizarre point of view" is, in fact, textbook economics. The authors of that textbook are Paul Krugman and Robin Wells. Miss Wells is also known as Mrs. Paul Krugman.

Game, Set, Match. Blogs Rule. Dumbplumber

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