Big Thinker Kitty puts on her thinking cap.
Megan McArdle once again gets all Big Thinkerish, this time attacking the vexing problem of massive unemployment. After much cogitation, some rumination and a little logicalization, she determines that the best way to tackle long-term unemployment is to give businesses tax credits for hiring long-term unemployed. She does not address the obvious issue of lack of demand but what do you want, America? It was hard enough for her to pretend that she cares about anyone but bankers, do you expect her to look for flaws in the arguments she is forced to dredge up as well?
But McArdle gets her revenge on the commenter who does point out that hiring depends on demand and also pointed out that Hoover wasn't a big spender. On the Rupert Murdoch post, she and the commenter have another exchange.
David Blum 4 hours ago
I have to post another thing that counters the nonsense this writer posted about Hoover.
Don't reply conservatives, I'm not interested in lies.
Btw, look at the chart, when did government spending go off the chart? 1941? Ah world war 2. Interesting. The same time we started spending tons of money the economy improved.
How would one explain that, outside of Keynes?.
McMegan 50 minutes ago in reply to David Blum
Tee-hee! I am only interested in the truth, so don't bother telling me why I'm wrong!
Her shocking-but amusing--lack of maturity shines though all her work, as does her dishonesty. We will return to the Murdoch post later, but let's look at one tiny bit before we move on:
"It emerged last night that Neil Wallis, the former News of the World deputy editor who was arrested last week, worked for the Conservative Party before last year's election. He gave "informal" advice to Andy Coulson, his former boss at the NOTW, who resigned from the paper over the hacking affair but was later appointed Mr Cameron's director of communications." http://www.independent.co.uk/n...
Similar pattern as Roger Ailes but even worse.
Actually, if you knew anything about British politics, you'd know that Murdoch's ties were, if anything, closer to Blair/Brown than to Cameron.
I do not think I have ever seen a writer who revels so very much in the idea that she knows something you do not. Asymmetrical Information indeed.
McArdle is not the only Big Thinker at the Atlantic. Ross DeVol (of the Milkin Institute) thinks cutting corporate taxes will help unemployment. Again, the commenters (those not paid to say otherwise, that is) mention the lack of demand.
Peter Wallison (AEI) thinks that we could solve our economic problems by getting rid of Democratic programs, which are depressing good, job-creating Republicans and dragging us all down.
As we know, corporations are now sitting on enormous piles of cash but are unwilling to deploy these resources, and the small businesses that are profitable are refusing to expand. The conventional interpretation for this is that there is little demand because of unemployment and a weak housing market. However, in our current straits I believe cause and effect run the other way. Successful businesses are always ready to expand and gain market share. That is a manifestation of the "animal spirits" that Keynes observed in a growing economy. There is a reason why those spirits are now dormant.
Accordingly, the single most important step that the United States can take to restore job growth would be to repeal both the health care act and the Dodd-Frank act.
Mike Haynie (professor at Syracuse University) tells us that if it were easier and cheaper for banks to make small loans, more small business would prosper. He does not tell us where they will get their customers.
Bill Clinton tells us to paint our roofs white. We would have to hire people to paint them; problem solved. Thanks, Bill! Our nation is saved!
Clive Crook says we should provide more unemployment benefits. This solution would actually address demand in the short term, which means he win the Golden Cup For Big Thinking by virtue of addressing the obvious.
Julian Castro (mayor of San Antonio) says we should educate our youth for this high-tech world. He does not explain how expanding the labor pool will provide jobs.
Michelle Ree (" Founder and CEO of StudentsFirst and former Chancellor of D.C. Public Schools") thinks our problems will be solved if we are able to fire teachers. Ree runs a non-profit dedicated to eliminating tenure and imposing teach-to-the-test standards. Teachers are currently being fired by the hundreds, by the way.
Paul Kedrosky and Karl Schramm (both of the Kauffman Foundation) tells us to make it easier for entrepreneurs to start businesses, and that one way would be to give out more green cards.
Ryan Avent (The Economist) wants us to print more money.
Bruce Katz and James S. Rubin (Brookings Institute) says globalization of small businesses will do the trick. Evidently they have given up on increasing demand here and hope that we will be able to become China's China.
Fredrich Hess (also AEI) doesn't have any Big Ideas but says that getting rid of regulation on community and for-profit colleges will help hiring.
Eric Speigel (CEO of Siemens, a Research and Development firm) thinks we need tax credits for R&D.
And, finally, very special snowflake Matthew Yglesias, whose entire career is based on having graduated from Harvard, which convinced the right people that he actually understands what he is talking about, says that if we only had higher inflation, surely the unemployment crises would cease.
Higher inflation expectations would have a number of benefits. For starters, they would reduce real interest rates, mitigating the problem of the zero lower bound on nominal rates. They would also increase the cost of hoarding cash. This would encourage wealthy individuals and cash-rich firms to purchase real goods and services, or else invest in productive assets. Last, since mortgage debt is denominated in nominal terms, a faster rate of inflation would speed the deleveraging process and let households repair their balance sheet. When he proposed the idea over a decade ago, Bernanke castigated Japanese authorities for falling into self-induced paralysis. It's tragic that he's fallen into the same trap. The best way to get things moving again is to halt the paralysis.
Sadly, the unemployed would see the cost of living rise and those on fixed incomes would become poorer, but as we all now know, thanks to The Atlantic's Big Thinkers, the best way to help the poor is to help the rich.