Krugman poises the question: what makes flatearthers like the North Carolina GOP tick-they're actually sending back $700 hundred million of dollars of benefits to the federal government.
"Consider, for example, the case of North Carolina. The state was hit hard by the Great Recession, and itsunemployment rate, at 8.8 percent, is among the highest in the nation, higher than in long-suffering California or Michigan. As is the case everywhere, many of the jobless have been out of work for six months or more, thanks to a national environment in which there are three times as many people seeking work as there are job openings."
"Consider, for example, the case of North Carolina. The state was hit hard by the Great Recession, and itsunemployment rate, at 8.8 percent, is among the highest in the nation, higher than in long-suffering California or Michigan. As is the case everywhere, many of the jobless have been out of work for six months or more, thanks to a national environment in which there are three times as many people seeking work as there are job openings."
"Nonetheless, the state’s government has just sharply cut aid to the unemployed. In fact, the Republicans controlling that government were so eager to cut off aid that they didn’t just reduce the duration of benefits; they also reduced the average weekly benefit, making the state ineligible for about $700 million in federal aid to the long-term unemployed."
"It’s quite a spectacle, but North Carolina isn’t alone: a number of other states have cut unemployment benefits, although none at the price of losing federal aid. And at the national level, Congress has been allowing extended benefits introduced during the economic crisis to expire, even though long-term unemployment remains at historic highs."
"So what’s going on here? Is it just cruelty? Well, the G.O.P., which believes that 47 percent of Americans are “takers” mooching off the job creators, which in many states is denying health care to the poor simply to spite President Obama, isn’t exactly overflowing with compassion. But the war on the unemployed isn’t motivated solely by cruelty; rather, it’s a case of meanspiritedness converging with bad economic analysis."
Sumner recently accused Krugman of making '2 or 3' errors in his criticism of supply siders like Sumner who attack UI and claim we could bring down unemployment by cutting it:
"There are actually two or three mistakes here. It’s easier to see them if we use the AS/AD workhorse. Krugman is saying that UI can reduce the LRAS curve, but if the AD and SRAS curves intersect to the left of the LRAS curve, then it won’t be binding."
Yet Krugman points out today that looking at AS/AD can lead you astray in this question:
"But wait — what about supply and demand? Won’t making the unemployed desperate put downward pressure on wages? And won’t lower labor costs encourage job growth? No — that’s a fallacy of composition. Cutting one worker’s wage may help save his or her job by making that worker cheaper than competing workers; but cutting everyone’s wages just reduces everyone’s income — and it worsens the burden of debt, which is one of the main forces holding the economy back."
This is a point that Paul Samuelson made years ago in his 1948 textbook:
"One man by great ingenuity in hunting for a job or in willingness to work for less may solve his own unemployment problem, but all can't solve their problems in this way."
So yes, these GOPers are both ignorant and cruel.
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