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