In response to Tyler Cowen’s semi-praise for job saving programs, Arnold Kling has this wisdom for us:
On the larger point, keep in mind that in an ordinary non-recession month 4 million jobs are destroyed and about 4.2 million jobs are created. Suppose that in a bad month of a recession, 4.0 million jobs are created and 4.5 million jobs are destroyed. Which of those 4.5 million jobs ought to be saved, because they might come back in a stronger economy? No one in Washington knows.
1 comment
Comments feed for this article
Saturday ~ August 14th, 2010 at 10:59 am
Hyena
But this presumes that the reason to save the jobs is because they’d have otherwise survived. That’s not really the logic that’s been generally given and I don’t think people are much pretending it was; the logic for bailouts has been twofold: (1) we need to continue to pump money into the economy to support employment, (2) we would prefer that large companies like GM avoid messy bankruptcies which will destroy huge amounts of value because our bankruptcy system is not well-designed for the task.