There’s been some talk about a clutch of very conservative Republican governors from the South, led by Louisiana’s Bobby Jindal, “turning down” federal stimulus money. This is mostly nonsense—they’re all actually taking the vast majority of the money and in most cases there’s no real option of declining. But Jindal seems to be genuinely putting the meat on the bones of one aspect of this refusenikery by declining to change Louisiana law in such a way as to make its citizens eligible for extended unemployment insurance benefits. The nominal reason for this is that Jindal is claiming that taking the money would lead to a tax increase on Louisiana businesses, but his reasoning is hard to follow. Ryan Powers observes:
But it is not clear why participating in the expanded unemployment insurance program would result in tax increases for business. By Jindal’s own estimate, the recovery package would have funded his state’s unemployment expansion for three years, at which point the state could — if it chose to do so — phase out the program.
As New Orleans Mayor Ray Nagin suggested earlier today, perhaps Jindal’s presidential ambitions are “clouding” his judgement. “I think he’s been tapped as the up-and-coming Republican to petition a run for president the next time it goes around. So he has a certain vernacular, and a certain way he needs to talk right now,” Nagin said.
My other thought is that there may be a “beggar thy neighbor” strategy going on here. If Louisiana makes its unemployment benefits less generous than what’s available in other states, then maybe unemployed citizens will leave Louisiana for Texas and other neighboring states, thus creating an artificial appearance of an improved economic situation. It would be the equivalent of Mike Bloomberg fighting poverty by demolishing all the low-income housing in New York and hoping the poor people all move elsewhere.