In new NBER working paper we read that:
… Using the universe of Palestinian suicide terrorists against Israeli targets between the years 2000 and 2006 we provide evidence on the correlation between economic conditions, the characteristics of suicide terrorists and the targets they attack. High levels of unemployment enable terror organizations to recruit more educated, mature and experienced suicide terrorists who in turn attack more important Israeli targets.
In other words, while the empirical literature does not find much correlation between the stage of the business cycle and the amount of terror, this research tells us that economic downturns seems to produce better abled terrorists (what happens to the less able?). Think about this extension into the government sphere. I’d like to see research address the question of whether stages of the business cycle have an impact on the number of people interested in securing government positions in the US. I suspect that we see more interest (even conditional on more people being available) when times are bad. And would we also expect that the quality of government employment applications (and hires) improves during recessions?
If so, then maybe the government does not wish to be so successful in its stimulus efforts?
How ironic. The Palenistinians who have embraced a regime that is nearly totally unproductive, are the victims of the scourge of unemployment. I guess the solution is the California solution — send them a hundred billion so they can get a pay check, so they don’t join the Hamas version of the Crips. Stimulus.
Now, I readily admit that I do not know how one solves the Palestinian problem, or the Sudan problem. Or the problem with the Grand Ayatollah Khameni. But the NBER seems screwed up in its thinking.
You ask wryly whether the government may not be insincere in its stimulus efforts. At this point, who knows? Do they care?
Ever since taxes and regulation were reduced under Ronald Reagan, the Progressives have been sore, having the foundation of their creed shaken. Your guess is as good as mine whether they believe their own, er, principles.
Now, as our prosperity unravels, they cannot admit failure.
By the way, it is a bit non-partisan: George Bush has said nothing about the first quarter of 2008 when he agreed to Stimulus I, which froze tens of thousands of corporate controllers, planting the seeds of the collapse to come.
Wintercow, please let me make an inquiry, for my benefit and perhaps others: do you have a section on your site devoted to Hayek, as you have for Bastiat, and, if so, how do we get there?