Feb 12 2010
If there was a Koufax award for Catch of the Month, my nominee would be long time blogger and all around good guy Dave Johnson, who has dug up an article on unemployment by Larry Summers that, well, reads like a chapter out of Social Darwinism for Dummies.
The article, titled Unemployment, is Summers’ contribution to the Concise Encyclopedia of Economics, which is published by the Library of Economics and Liberty (I love the smell of selfish rich guys in the morning.).
Dr. Summers distinguishes between short and long term unemployment
Jobless respondents who have chosen not to continue looking for work are considered out of the labor force and therefore are not counted as unemployed. Almost half of all unemployment spells end because people leave the labor force. Ironically, those who drop out of the labor force-because they are discouraged, have household responsibilities, or are sick-actually make unemployment rates look better; the unemployment rate includes only people within the labor force who are out of work.
First comes Dr. Larry’s prescription for lowering the unemployment rate,
To fully understand unemployment, we must consider the causes of recorded long-term unemployment. Empirical evidence shows that two causes are welfare payments and unemployment insurance. These government assistance programs contribute to long-term unemployment in two ways.
series of articles by various economists written for the
The second and latest edition of the CEE was published in 2007, so this isn’t some ancient grad student dissertation gone awry. Instead it is a very recent pronouncement of an important Presidential economic adviser’s current understanding, or lack thereof, of the causes of long term unemployment.