Paul Krugman has posted another clarification on job creation and the business cycle on his website - a bit technical (i.e. involves graphs) but a good concise explanation of why the Club for Growth types are either confused or lying. As Krugman has pointed out in the past, anti-globalization lefties and their liberal sympathizers generally have a mistaken notion that free-trade agreements increase unemployment, overlooking the fact that at full output of an economy, the Fed determines the employment rate. Now it seems that the Republicans have settled on the idea that the tax cut will create jobs, without taking into account the Fed’s actions. In fact, they seem livid at Krugman for asserting the simple fact that Greenspan will determine the number of jobs 3 to 4 years from now. The froth at their mouths over such a simple misunderstanding (maybe not simple to the lay person, but these people purport to run economic research firms!) would be embarrassing, only there seems to be no one around to recognize any embarrassment.
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