Wednesday, July 21, 2010

quoted in the Daily Item

I was quoted in a short write-up on unemployment benefits. I presented both the pros and cons of unemployment benefits, without injecting my opinion. For those unfamiliar with principles of economics classes, this is stressed - there are positive views (facts) and normative views (opinions one derives based on facts along with your own value system).

The other economist quoted, Dr. Moohr, clearly didn't seek to share the pros and cons of extending unemployment benefits, just his reasoning for why he wanted these benefits extended. He dodged the issue of whether the government should be adding to our debt by claiming the payments will happen regardless. Also, this is a rare instance where you will hear an economist try to claim that incentives don't matter. The heart of economic analysis (and one of Greg Mankiw's 10 principles of economics) is that people respond to incentives.
As coincidence would have it, two weeks ago I spoke with a friend who had been laid off by his company for lack of demand, but he was called back to work. I was very excited for him and saying congratulations and that it must be a big relief to be back at work. He said not really - because he was enjoying the time off with his unemployment benefits.

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