Casey Mulligan has a new book out, The Redistribution Recession: How Labor Market Distortions Contracted the Economy. It is another attempt by a “Chicago Bubble” economist to explain that we shouldn’t pay attention to any of the economic data about this recession. You see, Mulligan has a model so perfect that it can make economics transcend reality.
Earlier this week, he wrote an article on the New York Times Economix Blog, A Keynesian Blind Spot. Basically, it is Mulligan’s attack on Paul Krugman’s very good End This Depression Now! which I’ve written about before. His argument: great unemployment and food stamp benefits have made workers lazy. And more: knowing that great unemployment and food stamp benefits were available, caused Job Creators to lay off people and then not to hire people again.
I swear I am not making this up. Go and read his article. As I said, Mulligan is a “Chicago Bubble” economist. These guys are less connected to the real world than Franciscan monks. They have their models and their ideology and they don’t need anything more. Unfortunately, no one has yet gotten them to take vows of silence.
Rather than discus Mulligan myself, let me present to you a few of the many excellent comments on the blog. First up is Doctor Gonzo:
I especially don’t get the argument that food stamps, unemployment benefits, etc. took away the incentives for employers to create jobs. Last time I checked, employers don’t say to themselves, “Hey, look at how stingy unemployment benefits are for the unemployed; let’s create some jobs for them out of the goodness of [our hearts]!” They say, “Hey, I have more customers and more [orders] than before, let’s hire more people.” Without money to purchase those… orders, nobody is hiring. When consumers can’t order widgets, and the government can at zero interest rates, why not have the government order them? Then businesses will actually hire!
If only people had their unemployment run out after just 6 months. Then, after losing their house of course, they could fill a job as an apple-seller on the street corner!
Ross Williams:
The increase use of social programs was a result of unemployment not its cause. This is just more silly ideology.
This one by Stan gets at a typical bit of conservative economic hypocrisy. Liberals never claim that tax cuts on the rich don’t stimulate the economy—only that such incentives are not as effective as others. But conservatives really do claim that tax cuts for the rich grow the economy but spending on social programs do not. It’s amazing.
Is this a parody? How did this guy ever get through graduate school?
And finally, Larry:
In a country like Switzerland, where unemployment benefits pay 80% of your previous salary (up to a certain cap) for two years, it may be true that some people do not rush to get back to work. But in the US or other countries where benefits do not pay enough for a person to get by? Forget it. This theory would only be true if you include begging, robbery, selling drugs and prostitution as employment, because those are the only alternatives that many unemployed people would have nowadays if there were no social support network.
The Chicago economists have to break out of their bubble. If they do that, they might find they have something to offer society. Until then, it is just ideology—not science.
I know that Thomas Friedman doesn’t exist just to piss me off, because he pisses a lot of other people off too. But at the moment, I’m feeling persecuted, because I was tricked into reading his most recent column. It is all Matt Yglesias’ fault. He tweeted, “Everyone is going to hate this Tom Friedman column, but once again he’s basically right.” Yglesias is a smart guy, so I thought I’d check out the column to see if Friedman is “basically right.” No, he isn’t. In fact, he is just giving us the
I am no expert on wine. I just enjoy it. Unlike most things in my life, I have never tried to learn about wine and what makes it good. But I’ve drunk enough of the stuff to form some opinions. And my newest opinion is that
“When President Obama took office in January 2009 the US was plunging downward into the worst recession since World War II. By summer 2009, the US had begun a weak but real recovery, which at last seems to be accelerating into an expansion that more and more Americans can feel.
Let me tell you something. I may be the only person in America, but I am far more enthusiastic about President Obama this time than I was four years ago.
Nate Silver is not the kind of man to make brash statements. He doesn’t even defend himself when
Senator Sam Ervin was an interesting guy. There are things to like. He was against prayer in school. He opposed “no knock” searches. And he was instrumental in taking down Joseph McCarthy and Richard Nixon. He is now something of a liberal hero because he was a big defender of Jim Crow during the 50s and earlier 60s who did a turn around and supported civil rights—at least in an anemic way.
Maybe the reason I like economics and statistics (polling, modeling—my almost hysterical love of Monte Carlo simulations) is that I am, at base, an extremely naive person. This was well on display this morning when Mike Allen and Jim Vandehei at Politico reported that Chris Christie really did want to be Mitt Romney’s running mate. The title of the article didn’t surprise me: