Employment Math, or How to Make Prejudice Look Scientific

12 Aug

In lieu of our own long post we highly recommend this excellent take-down of Narayana Kocherlakota over at Rortybomb. Who is Kocherlakota? The President of the Minneapolis Fed, and one of three who dissented from the Fed’s decision to keep rates low until 2013. Rortybomb shows that, among other things, Kocherlakota plugs some really screwy ‘gut assumptions’ into a crappy and heavily criticized Nobel Prize winning formula for explaining unemployment rates. This formula backs up the bullshit position that the spike in unemployment is more or less because lazy workers prefer to collect unemployment insurance than go get all of those great jobs on offer there (and because employers are scared of tax raises!). One of the nice things about the post is that it shows that both the formula and the empirical assumptions plugged in are equally distant from reality.

It’s as if the biggest problem in the economy were that we were not exerting enough pressure on the jobless to go back to work, rather than on investors to create jobs. That’s even more ass backwards than Tea Party attitudes about the debt-ceiling.

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2 Responses to “Employment Math, or How to Make Prejudice Look Scientific”

  1. William September 19, 2011 at 12:06 am #

    Ahh, that must be why so many employers are posting jobs and not having anybody apply!

    • thecurrentmoment September 19, 2011 at 12:37 am #

      Don’t know where you’ve been looking, but we’re guessing that the Bureau of Labor Statistics is a more reliable source of information than your gut survey of employers and their failure to find eager workers. As the BLS recently reported, there is 1 posted job for every 4 unemployed job seeker. http://www.bls.gov/web/jolts/jlt_labstatgraphs.pdf That means it wouldn’t matter if the US stopped paying unemployment benefits, eliminated welfare, got rid of Medicaid, and passed a new law making it illegal to sell food or water to the unemployed – they still wouldn’t be able to get a job because there just aren’t enough. Even if every currently unemployed person applied for every open job, and magically were hired, three out of four unemployed persons would remain unemployed. That has nothing to do with unemployment benefits.

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