Casey B. Mulligan is proudly displaying his ignorance of Keynesian economics on the web pages of the New York Times.

Because in the past year the decline in consumption has lagged behind the decline in employment the good professor believes that he has shown that the current troubles are not caused by a failure of demand. here is his graph:

Wonks Anonymous is not quite sure what trend adjusted means here but let that pass. The simple fact is that people need to eat and buy new jeans at Old Navy when the old ones wear out. Also they tend to get help in these endeavors from friends and relatives who still have jobs, not to mention dread government programs such as unemployment insurance and food stamps.

This is very simple Keynesian economics. Consumption = a + bY, where Y is income and b is less than 1. As income, represented here by aggregate hours worked, drops consumption also drops but the drop is not proportional to the drop in income. If it were, the drop in consumption would reinforce the drop in income and the economy would quickly move to zero.

If Professor Mulligan believes that the drop in hours is the cause of our troubles then Wonks Anonymous is curious to know just what has caused this drop in hours. Would that be a decline in productivity, which has not happened? An increase in marginal tax rates, which has not happened? Collective sloth? Generous unemployment benefits?

It really seems that the professor does not have an economic model except that he knows that workers are probably at fault.