Hoisted from the Archives from Five Years Ago: Department of “HUH?!?!?!?!?!?!

Every once in a while I think that our austerian intellectual adversaries could not have been as clueless in the aftermath of 2008 as I remember them being. But then I go back through my archives, and find things like this:

Department of “HUH?!?!?!?!?!?!”: Does David Andolfatto really think that the speed with which unemployed workers found jobs sped up as the recession hit?

Apparently so:

In a typical quarter, roughly 2,000,000 workers per month exited unemployment into employment. When the recession hits… look at what happens to the UE flow. While it does not rise as sharply as the EU flow, it rises nevertheless… and continues to remain high even as the EU flow declines. Is this surge in job finding rates among the unemployed consistent with the deficient demand hypothesis?

Wow. Just wow.

The pace of new hires falls by 30% as the recession hits. Firms just don’t see the demand to justify hiring at the normal pace.

But when firms hire, they hire from employed and the not-in-the-labor-force as well as the unemployed. With more than twice as many unemployed, a greater share of new hires now come from the currently-unemployed than used to, and so a greater number of people make the unemployment-to-employment transition.

But that is not any “surge in job finding rates among the unemployed.”

Your average unemployed person has a harder time and a lower chance of finding a job when the recession hits. Andolfatto has forgotten–or never bothered to learn–that a “job-finding rate” has a denominator as well as a numerator. There is no surge in the job finding rates among the unemployed–rather, the reverse.

This really is not rocket science, people…