A few weeks ago I did a post pointing out that pundits on both the left and the right have moved further to the extremes, and away from sensible policy views. I just noticed another example today, an article claiming that if you pay people not to work, it won't significantly increase the number of people not working.
Extending benefits to unemployed workers beyond the 26 weeks provided by most states has little effect on the unemployment rate and essentially no impact on labor force participation, a recent working paper released by the Federal Reserve Board found.
I guess they didn't notice that the natural rate of unemployment in Europe is at least 8%.
Question: When was the last time you saw a liberal pundit point out that extended unemployment benefits increased the unemployment rate? Maybe when Bush was implementing the policy? Here's Brad DeLong in 2008:
The rule of thumb, IIRC, is that the average duration of an unemployment spell increases by 1/4 of the increase in the duration of unemployment benefits. Thus a 13-week increase in unemployment insurance duration should increase the average unemployment spell by 3 weeks. With current mean unemployment spell duration at 17 weeks, and with roughly 2/3 of the unemployed eligible for UI, this would produce a 3/17 * 2/3 * 5.5% = 0.6% increase in the measured unemployment rate.
It seems to me likely that--whatever happens to the economy--George W. Bush has just produced four bad unemployment-rate headlines on the Saturdays August 2, September 6, and October 4. This cannot be news that John McCain is happy to hear.
That was only a 13-week increase, not a 73-week increase, as Obama implemented. And BTW, DeLong's prediction was precisely correct.
I suppose I should bash the other side as well, to be fair and balanced. Here's what GOP politicians privately think about climate change:
In stark contrast to their party's public stance on Capitol Hill, many Republicans privately acknowledge the scientific consensus that human activity is at least partially responsible for climate change and recognize the need to address the problem.
However, they see little political benefit to speaking out on the issue, since congressional action is probably years away, according to former congressmen, former congressional aides and other sources.
In Bloomberg BNA interviews with several dozen former senior congressional aides, nongovernmental organizations, lobbyists and others conducted over a period of several months, the sources cited fears of attracting an electoral primary challenger as one of the main reasons many Republicans choose not to speak out.
Most say the reluctance to publicly support efforts to address climate change has grown discernibly since the 2010 congressional elections, when Tea Party-backed candidates helped the Republican Party win control of the House, in part by targeting vulnerable Democrats for their support of legislation establishing a national emissions cap-and-trade system.
Here's my suggestion for the GOP. Say you'll support a carbon tax if it's used to do an equal reduction in taxes on capital. Even if there were no global warming, a carbon tax would be ten times more efficient than taxing capital income. Of course the Dems would say no. And then the GOP could taunt the Dems as follows:
"So Al Gore has convinced you guys that climate change will produce a catastrophe, and yet you'd rather engage in class warfare than solving the problem, Thanks for clarifying your priorities."
If the GOP weren't so timid on climate change they'd split the Dems right down the middle---class warriors vs. eco-freaks.
PS. There was a time when even liberals supported lower taxes on capital.
PPS. I strongly agree with David Henderson's post praising Summers on export deregulation--even if it undercuts my closing of the liberal mind argument.