As for the University of Chicago? Well Heckman is a real scientist. Uhlig too. Among others.

But that they keep someone like Mulligan in their employ is, to the rest of us, frankly amusing. Robert Lucas is their great beacon in macroeconomics. His AEA presidential address a few years ago centered on the claim that we had solved the problems of depressions in capitalist economies.

At some point it would be nice if the media [Megan] would rouse themselves.

But we’ll be in a grinding downturn for several years. Several years of pain will force a rethink. And finally people will be less patient with these clowns.

And isn’t that a fine commentary on the state of economic thought in the nation? What passes for “economic thought” in the U.S. are a thousand variations on the Dorning Rasbotham fairy tale. Even though economists don’t know who Rasbotham is or what he wrote, they recite his words almost verbatim.

Rasbotham styled himself “a FRIEND of the POOR” and no doubt he sincerely believed he was. After all, as he pointed out, “What would become of the rich, if there were no poor people to till their grounds, and pay their rents?” Indeed.

And since there is “not so great a difference in the real interests of the rich and the poor… as some persons imagine” whatever “little difficulty, in particular cases” might be suffered by the poor in order to increase the fortunes of the rich is a sacrifice to the common good, they ought to make cheerfully!

But Casey is talking nonsense if he thinks that the current high rate of unemployment has anything to do with that. The social safety net led to a lower *under-employment* rate than there would otherwise be. Underemployment has no benefit over direct transfer payments in the short run and is detrimental in the long run. The simple fact is that there is not enough demand (both globally and domestically) to support the level of jobs we had pre-2008. No amount of starving will put bankers back to work at Lehman.

Also, I’m not entirely convinced that the social safety net was all that effective. If you look at TANF rates, they’ve barley budged since 2008. I haven’t seen the rate on SNAP but I’d assume it’s the same.

However, let’s suppose he is making a structural unemployment argument. He offers no evidence in support of this claim, merely a suggestion that the safety net could have this effect. I would argue that the evidence contradicts this claim. Researchers at the San Francisco Fed found extending unemployment insurance caused at most a small (roughly 0.4 percentage point) increase in the unemployment rate, which is not nearly enough to explain the rise in unemployment since 2007. (http://www.frbsf.org/publications/economics/letter/2010/el2010-12.html)

Further, Food Stamp enrollment has risen more for working families than for other groups. This is exactly the opposite of what professor Mulligan is claiming.