| Free Trial |
| Submit site feedback |
Economy: Federal Watchdog Can't Vouch For Administration Job Numbers
• "The government watchdog overseeing the federal stimulus program testified Thursday that he could not vouch for the Obama administration's recent claims that the money had saved or created 640,000 jobs. He suggested that the administration should have treated the number with more skepticism," the New York Times reports. "Earl E. Devaney, the chairman of the Recovery Accountability and Transparency Board, said... up to 10 percent of the recipients had not filed the required reports showing how many jobs they had created or saved."
• "As he readies an overhaul of the nation's financial regulatory system, House Financial Services Chairman Barney Frank," D-Mass., "is already looking at avenues to revise the package before it goes to the floor the week of Dec. 7," CongressDailyAM (subscription) reports. "At the top of the list is revisiting language his panel approved Thursday that would give sweeping powers to the GAO to audit the Federal Reserve."
How much of a factor in the downturn have been sticky wages and prices? Can you point to sticky wages affecting the level of employment in particular industries, or sticky prices further dampening demand for some goods and services? Is there anything that government could do to effectively unstick wages or prices? Does the incidence of stickiness indicate that unionization (which is at historically low levels) isn't as much of a factor in sticky wages as once thought?
-- John Maggs, NationalJournal.com
Responded on March 10, 2009 2:57 PM
James K. Galbraith, Professor of Economics, University of Texas
Litan makes a point: this topic will provide future employment to economists.
Otherwise, to say that sticky wages (or prices) play a role in unemployment is a bit like blaming gravity for the collapse of a bridge. It's not of any use to the civil engineers.
Responded on March 2, 2009 10:11 AM
Robert Litan, Vice President of Research & Policy, Kauffman Foundation
My impression from anecdotal reports -- in the media and in personal conversations -- is that employers are more willing to offer wage cuts in lieu of layoffs, and employees more willing to accept them, in this downturn than in any previous recession of my lifetime. To the extent this occurs, this will mitigate an otherwise horrific decline in employment. In future years, I suspect there will be a number of economists who will be sifting through the data to whether and to what extent wage cutting in fact has happened.