“That’s rich. And also a really bad argument.”
Well, sure - - I don’t want to work. But is it really my fault? Or that of my former fellow-colleagues who took buy-outs? This isn’t exactly what he’s getting at, but University of Chicago economist Casey B. Mulligan suggests that unemployment is increasing because - and I am not making this up - ” … some employees face financial incentives that encourage them not to work …” Mulligan promises to reveal in his next post why some workers would be less willing to work now than they were in previous years. I am burning with anticipation.
And the solution? (It gets even better.) “First of all, it suggests that a fundamental solution to the recession would encourage labor supply (perhaps cutting personal income tax rates, so people can keep more of their wages), rather than tinker with demand.”
Of course. Cut taxes. That is the answer to everything. OK. Get up off the floor. It’s really not that funny.
If Mulligan is right, then whatever this stay-at-home incentive might be is certainly wide spread. Forty-nine states and the D. of C. had unemployment increases from Nov. 07 to Nov. ‘08.
http://www.bls.gov/web/laumstch.htm
I’m tempted to degenerate into ad hominum and say, “Supply side. Sure. U. of Chi. Milton Friedman and all that. What do you expect?” But Mulligan anticipated the argument, and pre-empted it - much to my chagrin - in his final paragraph.
For a somewhat more rational, but less humorous, explanation (Economics is, after all, the dismal science) and an interesting, perhaps even relevant graph, have a look here.
http://economistsview.typepad.com/economistsview/2008/12/inventory-to-sa.html
Oh, by the way, the Quote used for the title of this post comes from Rachel Maddow, in a totally different context.
http://edgeofthewest.wordpress.com/2008/12/24/thats-rich-and-also-a-really-bad-argument/
