Does productivity = unemployment?
There’s a controversy aflame in the left–liberal blogosphere around a revelation in Ron Suskind’s new (and apparently error-riddled) book, Confidence Men. (Brad DeLong has the page.) Suskind reports on tense high-level meetings within the Obama administration as it became clear that the StimPak wasn’t really working. Unemployment was drifting higher, and the Keynesian faction—Christina Romer, then chair of the Council of Economic Advisors, and later Lawrence Summers, then resident wise man—was calling for more stimulus. Obama said no. It was politically impossible, but Obama also argued that the productivity revolution has made workers obsolete…. Read More
Was there a housing boom? Yes.
Matt Yglesias, striking that contrarian tone beloved of bloggers (something you’d never find here, of course!), declares that there was no housing boom. Or, more precisely, though there was a boom in house prices, there was no boom in construction. To make this point, Yglesias uses one on those ubiquitous St. Louis Fed graphs, this one of the history of housing starts since 1970. Sure enough, it sorta supports his point. But this is only a very partial view. Here’s a fuller one. First of all, the boom wasn’t just about new houses—there… Read More
