By Arnold Kling
I have very little time for blogging this week. Here are some things that would interest me if it were a normal week:
1. Ronald Bailey on various studies of how libertarians differ from others in terms of moral outlook.
Some of the more intriguing results involve the empathizer/systemizer scale. Empathizers identify with another person’s emotions, whereas systemizers are driven to understand the underlying rules that govern behavior in nature and society. Libertarians, unlike both liberals and conservatives, scored very high on systemizing. The authors note, “We might say that liberals have the most ‘feminine’ cognitive style, and libertarians the most ‘masculine.’ ”
Or most autistic? Read the whole thing, especially Bailey’s concluding paragraph.
2. Mark Thoma on Axel Leijonhufvud’s description of the mechanism by which monetary expansion takes place. That is, the Treasury issues debt at, say, 3 percent, and then the Fed lends money to banks at close to zero percent to buy that debt. The benefit to banks is pretty obvious. Why this is good public policy is less clear.
3. David Beckworth says that most of the drop in employment in the past two years has not been in the construction sector. I knew that. I do not think that we will be able to tell in the midst of the recession how much of the employment loss is recalculation-related and how much is demand-related. Once it is over, we may be able to see how many workers returned to jobs similar to those they held in 2006 and how many did not. The recalculation story predicts that most will not. In fact, it could turn out that other industries see less of a comeback than construction.
Of course, even if most of the job gains that return the economy to full employment represent new occupations for the workers involved, that will not necessarily prove that demand does not matter. Perhaps demand policies could play a role in speeding the transition.