Hall and Woodward write,

One problem with the employment stimulus is that the funds go in the first instance to the owners of businesses and not to consumers generally.

This criticism applies to my preferred stimulus, which is to take Bryan Caplan’s suggestion and cut the employer contribution to the payroll tax.

I strongly disagree with Hall and Woodward. Owners of businesses, including owners of small business and shareholders in large corporations, have taken huge losses compared with the average worker. Through the third quarter of 2008, wage and salary disbursements were still up. Profits were down. When the fourth quarter data become available in about 4 weeks, my guess is that it will show that relative to the fourth quarter of wages and salaries will be about flat and profits will be down by 20 percent are more.

Profits are the most cyclically sensitive component of income. If you want to redistribute income from profits at the peak of a boom, that’s one thing. But if you’re still against profits in the midst of a recession, then you’re against capitalism.