Wednesday, November 10, 2010

Oh no! we didn't see this coming

The Riksbank (Nobel) prize hasn't even been awarded yet and the winning Britwit is already sounding off on how nations need to cut off benefits to the unemployed.  I wrote October 11, 2010 about this year's winners.  First from the "winners" statement and my reaction.

"This may refer to benefit levels in unemployment insurance or rules in regard to hiring and firing," the statement said. "One conclusion is that more generous unemployment benefits give rise to higher unemployment and longer search times." (my emphasis) 
And there you have it--the money quote. These clowns were chosen because they could "prove" that unemployment is partly caused by excessively high unemployment benefits. With the help of the Riksbank Prize, the jobless are about to be thrown to the wolves.
And here we have Pissarides speaking yesterday.
Nobel laureate: limit jobless payouts to a year
Published: 10 Nov 10 07:40 CET 
Nobel (Riksbank) Economics laureate Christopher Pissarides on Tuesday called on states to subsidise "real jobs" to increase employment and to limit benefits to a maximum of one year to ward off long-term joblessness.
"I would strongly advise the governments not to allow long-term unemployment to build up by providing direct subsidised work experiences to unemployed after nine to twelve months of unemployment," the British-Cypriot economist told AFP on the sidelines of a conference in Stockholm.
"In recession times of course you might extend the period (of unemployment benefits) a little because there are not enough jobs, but not too much," the 62-year-old labour market expert said.
"You can extend it up to a year but I would be concerned if it was extended unconditionally beyond the 12 months," he added. more
Krugman's Pain Caucus has a hero.

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