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.