Conservatives hate Paul Krugman. One of the reasons for their hatred is that he refuses to accept their religious faith. They look at economics as a morality play in which virtue is rewarded and vice is punished. There are good people who work hard, and there are bad people who refuse to work unless they have no other choice. The good people should be rewarded for their hard work, and the bad people should not be rewarded for being lazy. Therefore, it is wrong to tax the hard workers. That will cause them to work less hard and stop creating jobs. It is especially bad if the taxes obtained from the virtuous are redistributed to the lazy. Providing hammocks for the lazy is what got Europe in trouble. That disease is called eurosclerosis. America should do everything that it can to prevent that disease from being exported to the US.
Krugman has been spending some time in Europe and he has raised some questions about eurosclerosis. Northern countries in the eurozone seem to be doing quite well despite the taxes that they collect from the virtuous to provide essential services to those in need. Even France, which is regarded by the religious fundamentalists as one of the most sinful nations in Europe, has a higher employment rate in the 25-54 year old age group than we have in the US. Perhaps eurosclerosis is not a disease after all. It might be possible for Europeans to avoid hell if they can figure out how to solve the problems they created by forming a currency union under the wrong conditions.
Another problem for the religious fundamentalists in the US is that they won the political battle in the US over the extension of unemployment benefits to the long term unemployed. Government has taken the "hammock" away and the lazy workers, who refused to take the available jobs, should now have jobs. That has not happened. The hammock has been removed but they are still unemployed.
Krugman does an excellent job as the devil's advocate. Conservatives will refuse to believe the evidence that he provides because it raises questions about their faith. Eurosclerosis is an article of faith. One would hope, however, that they would better understand the law of supply and demand which is another article of their faith. The unemployment rate in the US during the dotcom boom was less than 4%. There were jobs available for anyone who wanted to work and they were filled by those who chose to work instead of accepting the hammocks that were available. Taxes on the virtuous were also raised and they still worked hard. Jobs were also created but that had more to do with the need for labor than it did with the state of mind of management.
It is easy to poke fun at the fundamentalists who see economics as a moral play. Unfortunately, they will make it difficult for governments to address the changes that are underway in our economic system. Technology, and globalization are reducing the demand for manufacturing labor in most advanced economies. Moreover, many of the innovative "high tech" industries are able to satisfy the demand for their services with a relatively small number of workers. For example, Facebook provides services to a huge global customer base with a very small workforce relative to its market capitalization. Amazon has used technology to sell a large variety of products more efficiently than the retail outlets that are no longer needed. It employs a relatively small number of workers in relation to the value of its sales and its market capitalization. A large share of household budgets are also spent on cell phone service, Internet service and television service. Those services are provided by networks which have huge economies of scale. Increased demand can be satisfied without the need for large increases in the workforce required to satisfy the increase in demand. The good news is that western economies have become more efficient at satisfying consumer demand. The bad news is that the demand can be satisfied with fewer domestic workers.