From the ‘No shit, sherlock’ department: “The chair of Bush’s Council of Economic Advisors, Ed Lazear, says that the unemployment problem is not structural, it’s due to lack of demand.”
September 1, 2012 § 2 Comments
“Some members of the Fed’s monetary policy committee sitting in the audience for this paper have used the structural unemployment argument to argue against more help for the economy. If economics was an evidence based science this, and the mountain of other evidence pointing in the same direction, would cause them to change their minds and support more accommodative policy — the potential benefits of doing more are much higher than they have estimated. Instead, we’ll hear the same old arguments from the same people, or they’ll search until they find something else that agrees with their priors, and use that to defend them. It’s the same with fiscal policy, theory and evidence are ignored in favor of bogus arguments there too, and it’s all very frustrating.”
I would add that a lot of the basics of economics are evidence based, and that there is an army of well funded economists (including Cowen, Boudreaux, Kling, Roberts etc.) hired to push the neoliberal economic agenda, which is the preferred policy of their employers.