Advertisement

Maybe Not So Volatile?

When Jacob Hacker’s Great Risk Shift came out, many liberals were super excited, here’s a brand new argument for a bunch of conclusions I already agree with. I had no quarrel with Hacker’s data, showing a rise in economic instability over the past few decades, but I wasn’t so excited about his book which struck me as an unduly esoteric argument on behalf of policies that are perfectly defensible on other grounds — I think, for example, that a better-designed health care system would boost economic growth, improve public health, and enhance social justice and any consideration relating to volatility is putting us on track to debate a side issue.

Well, now here comes the CBO and its very credible director Peter Orszag to report that “In previous work released in 2007 … report concluded … earnings volatility had not increased” and in a new study “preliminary results suggest that household income is much less volatile than individual worker’s earnings, and that household income volatility has not increased over time — and perhaps even declined slightly.” Now as I say, I still think the vast majority of Hacker’s policy ideas are perfectly good whether or not the CBO is right about this but obviously this is going to be a problem for folks who’ve tried to hang progressive policies on Hackerian arguments so it’s no surprise that Greg Mankiw’s linking to the report.

Advertisement