Unemployment Too Low

Fred Clark’s Slacktivist is one of my favorite blogs, maybe because we so rarely disagree:

In a couple of recent posts (here and here), Brad DeLong responds to the accusation that he and Paul Krugman are oversimplifying the current debate between austerity and growth.

Let’s be clear: this accusation comes from those trying to defend the claim that 9.7-percent unemployment is acceptable. Worse than that, it comes from those arguing that 9.7-percent unemployment may not be high enough.

Which is a difficult thing to argue while still being a decent person. To quote one of my favorite economists,Karol Jozef Wojtyla (emphasis original):

When we consider the rights of workers in relation to the “indirect employer,” that is to say, all the agents at the national and international level that are responsible for the whole orientation of labor policy, we must first direct our attention to a fundamental issue: the question of finding work, or, in other words, the issue of suitable employment for all who are capable of it. The opposite of a just and right situation in this field is unemployment, that is to say the lack of work for those who are capable of it. It can be a question of general unemployment or of unemployment in certain sectors of work. The role of the agents included under the title of indirect employer is to act against unemployment, which in all cases is an evil, and which, when it reaches a certain level, can become a real social disaster.

So let me oversimplify things a bit more. Unemployment is, right now, as JP2 says, “the opposite of a just and right situation” and “an evil” and “a real social disaster.” DeLong and Krugman are arguing that something can and ought to be done or at least tried to reduce that evil. In response, their critics accuse them of oversimplifying.

“Macroeconomics is not, by any reasonable measure, simple,” Kartik Athreya counters, meaning that the reason “the opposite of a just and right situation” should be embraced is very, very complex and something that we laypeople couldn’t possibly be expected to understand.