Wednesday, October 10, 2012

Casey Mulligan and the Redistribution Recession

Casey Mulligan wrote a book about how the redistribution occasioned by the social safety net is responsible for a plurality of the labor market distortions that have been depressing the economy since the Great Recession.  I haven't read it yet, but if it's geared more toward a lay audience than his blog, I'll give it a try. 

Meanwhile, here's a post from his blog, in which he writes, "Helping the poor and unemployed is intrinsically valuable, but is not free. It has made labor more expensive and depresses employment."  I didn't understand the entirety of the post, but if his conclusion is true, then I think the most pressing problem facing our country is inequality.  I'd like to hear Mulligan's take on the policy implications of his research, but if what is required to get our economy back on track is policies that will cause pain to a lot of people in the short run, politically and ethically we need a spirit of shared sacrifice that right now is completely absent.  I think there's room to get there without greatly decreasing the productivity of the capitalist class. 

Am I begging the question that ripping the bandaid off is a better approach than the slow pace of healing we're on now?  Probably yes. 

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