In the email bag this morning, courtesy of the NYTimes, under the topic "Healthcare":
The New Subsidy for Layoffs
By CASEY B. MULLIGAN
.... A major provision of the American Recovery and Reinvestment Act helps predict what will happen in the insurance market next year.
Employees and employers often take steps to avoid layoffs, like working hard to encourage customers and clients to continue buying the goods and services provided by the business.... unlike the Recovery Act’s program, next year’s program welcomes people out of work even if they left work by quitting, retiring or being fired for cause. It also welcomes people who have the possibility of joining a spouse’s plan and people who had no health insurance on their prior job.... Be prepared for some unpleasant surprises over the next year or two, both as to the amount that the labor market is depressed and the unanticipated federal spending that will be needed to provide the benefits promised by the Affordable Care Act.
Something there was that raised my hackles. Was it, that when I took a look at Mulligan's bio photo I saw too close a resemblance to Congressman Darrell Issa?
Was it Mulligan's cozy connection with the University of Chicago?
Mulligan obtained his doctorate in economics from the University of Chicago, incestuously continues on as part of its faculty. A comment on Mulligan's inception to the Times, dated December 31, 2008:
I agree that giving Casey Mulligan a prominent soapbox in the Times is ill-advised. The inordinate influence of Mulligan’s tiny but vocal school of economists (think: Laffer) has given the talking points–such as they are–to an even louder and even more poorly-informed and -reasoned group (think: Ron the Actor, Joe the Plumber, and Sarah the Governor). That magnified influence, based on simplistic, faith-based beliefs (think: creationism) has resulted in 28 years of malfeasance.
Those beliefs are superficially attractive in their simplistic hermeticism. But they fall to pieces when confronted with the facts on the ground.
There are far better-informed and -reasoned voices out there that merit a far bigger soapbox, for the good of the country and the world. Think: Dean Baker, Brad DeLong, Mark Thoma. — Steve Roth
Supporting the tingle of my hackles was a snark from a mysterious Paul from New York on Mulligan's musings on layoff "subsidies":
Paul '52, New York, NY
Mulligan's claims about 'some' and 'many' employers are about as scientific as Paul Broun, the Georga Congressman who, despite an MD degree, considers evolution and the big bang as lies from the depths of hell.
The number of people employed is driven by the demand for the product of the employer. Period.
Today's owners and managers are part of an MBA generation that pares its workforce to the bone to maximize profit. Period.
Let's consider a lay off as where you temporarily unemploy least senior workers with an assurance that they'll be rehired when things get better. When an employer instead chooses to fire its least productive, who will never be reemployed, the employer presents the targeted employees with a "package" inclusive of "severance" and continued health care.
Employers pay severance because they do not "lay off" anymore. Period.
In 2010 we surpassed pre-recession GDP with 5 million fewer employed. Period.
Mulligan is associated with the
George J. Stigler Center for the Study of the Economy and the State:
George Joseph Stigler (January 17, 1911 – December 1, 1991) was a U.S. economist. He won the Nobel Memorial Prize in Economic Sciences in 1982, and was a key leader of the Chicago School of Economics, along with his close friend Milton Friedman.
While at Chicago, he was greatly influenced by Frank Knight, his dissertation supervisor. Friedman, a friend for over sixty years, comments upon it as remarkable since only three or four students ever managed to complete their PhD dissertation under Knight in his 28 years at Chicago. Jacob Viner and Henry Simons also influenced him and, among his students, W. Allen Wallis and Milton Friedman.
Mulligan causes Brad DeLong to have major conniptions about his understanding of
Fed Funds.
In short, this is another Judith Miller case of the NYTimes dispersing gross misinformation.