Thursday, June 21, 2012

Destroying Markets To Create Jobs?

Felix Salmon offered his views on Why Bernanke’s not doing more following yesterday’s FOMC statement. Although there are several points with which I disagree, one quote in particular was striking:
Of all the things to worry about right now, price discovery and capital-allocation distortions are pretty low down the list. I’d happily do enormous damage to both of them if I thought it would do any good in terms of creating jobs.
While I don’t think Felix is alone in this sentiment, far from it, his comment is far more explicit than most others. A few questions immediately come to mind...

Does this view imply that damaging price discovery and capital-allocation does not kill jobs? Or, it only hurts future jobs, which are less valuable than current ones? Is there some ratio of current to future job trade-off that would make damaging those items worthwhile?

This view makes little sense given my understanding of economics, but clearly others have a different perception. If readers agree with Felix’s view, how would you answer the above questions?

1 comment:

  1. Well, job creation is one of the most important tasks for today’s economy. It’s very important to create more jobs and cut the unemployment rate. Fortunately, today the unemployment rate is quite relatively low and most of people have jobs. It’s important to keep in mind that many factors affect job creation. Also many things depend on job seekers. It’s important not to be lazy and use federal resume writing services online to create a winning resume. Some people are lazy to look for a job and they only complain and blame high unemployment rate.

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