The Chicago School and its acolytes are active of late trying to convince us that we do not really need to change the glorious economic system that has worked so well for us since the Reagan Revolution. Mainly they are trying to convince us that the New Deal was a bad idea and active government policy to promote employment will do nothing or hurt the economy.

Wonks Anonymous hopes to revisit this drivel in the future - it does beg for more detailed refutation - he hopes that others will join him. One glaring misstatement by Tyler Cowen published in the NY Times stands out just at the moment:

He also took steps to strengthen unions and to keep real wages high. This helped workers who had jobs, but made it much harder for the unemployed to get back to work. One result was unemployment rates that remained high throughout the New Deal period.

Now Wonks Anonymous is quite familiar with the economic theory that Dr Cowen bases his assertions on. It is a basic argument referring to supply and demand in one market. He might even believe that it worked in individual labor markets, although he has seen studies that call even this into question. He has never seen a well controlled econometric study that proving that unions lower employment or otherwise damage the economy as a whole.

In fact, after blaming unions for high unemployment during the Depression, Cowen himself goes on to produce the more real and concrete reasons for the high unemployment rates: Various monetary policy mistakes raised interest rates and government spending programs were never that great and were too often counteracted by tax increases designed to balance the budget.

Meanwhile Cowen has not chosen to consider why the decades after the depression, decades of unprecedented unionization, were among the most stable and prosperous decades in our economic history, certainly better than the 1920's.