Today I have reading a swag of literature which attempts to explain cross-country differences in change in unemployment and average duration of unemployment in the current recession. This issue has been topical in the US recently as the US Senate debates whether to extend unemployment benefits. The mainstream economics view is that the previous assistance caused the unemployment problem and a decision to extend the assistance will worsen it. However, you have to wonder what planet the proponents of these views are on. The overwhelming evidence is that the longer the recession the higher average duration of unemployment becomes and the larger the pool of long-term unemployed. The solution is always to stimulate employment growth. That simple truth is always lost on the mainstream. As you will see, among the proponents of the erroneous view that benefit provision has caused the worsening of the unemployment situation are researchers at JP Morgans. I would like to think that if the US government hadn’t bailed those bums out then these researchers might have been unemployed themselves. They could certainly use a dose of harsh reality.