Saturday, February 26, 2011

Blinded by Ideology

The "red states" of the US think they are morally superior. One fact that supposedly supports this fact is the low unemployment in these states. But Paul Krugman points out that this self-congratulatory back-slapping is silly. These states received more stimulus money per-capita than the big states. So of course their economies revived faster:

Dean Baker points us to Feyrer and Sacerdote, who use cross-state variation in stimulus spending per capita to estimate the employment effects of the stimulus. They find a clear positive effect: states that got more money per person did better on jobs. ...

The point is that the best instrument Feyrer-Sacerdote found was population: low population states got a lot more stimulus per capita. As they say, this could be because they have a lot of roads per capita, or it could be because they’re rotten boroughs, with two senators even if they have no people.


... If Feyrer and Sacerdote are right, people in the Dakotas, Nebraska and so on are congratulating themselves on their good employment performance, a result of their rock-ribbed self-reliance — when what actually happened is that they got themselves an outsized share of the very stimulus they denounce.
Go read the original to get the links to cited articles.

This would not be the first time an ideologue blinded to his own prejudices ignores the facts in order to more vigorously give himself a back slap.

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