De Long's criticisms of our explanation of unemployment patterns in the United States are empirically false. His assertion that we have the direction of causation reversed collapses in light of the lag between artificially high wages and unemployment. Nor are his claims about the nature of cyclical movements in productivity and real wages consistent with the data. Finally, his contention that the model we present does not work in the post‐World War II era is, at best, misleading. The evidence shows (...) with remarkable consistency that government attempts to prop up wages have caused twentieth‐century increases in U.S. employment. (shrink)

PROSPERITY AND UPHEAVAL: THE WORLD ECONOMY 1945?1980 by Herman Van der Wee translated by Robin Hogg and Max R. Hall Berkeley: University of California Press, 1987. 621pp., $14.95 Van der Wee uncritically accepts that Keynesianism is responsible for post?war economic stability. Against this belief, it is argued that an analysis of the historical record shows no significant efforts at countercyclical fiscal management in the post?war era, while efforts to control the economy via monetary policy were associated with increasing instability, culminating (...) in the crisis years of the 1970s. Thus, in the American case at least, post?war stability has been the result of self?correcting market tendencies, while instability has followed government macroeconomic intervention. (shrink)

Recently, the outsourcing of Information Technology activities to offshore locations has been gaining significant momentum, with some associated backlash by the workforce in the United States. Based on their 2005 survey [6], Global Insight, a private consulting firm, estimated that U.S. companies will spend about $38.2 billion in offshore IT services by 2010, compared with about $15.2 billion in 2005, primarily because the expected cost savings will grow by $11.7 billion in the same time period. Binder writing in "Foreign Affairs" (...) [2] states that offshoring expenditures will continue to increase dramatically, and the changes the offshoring phenomenon will bring will transform society. This paper focuses on the social impact of offshoring and the effects of the weighing of costs and benefits as a result of offshoring activities. (shrink)

The scholarly literature suggests high or increased tax burdens tend to reduce economic growth, lowering incomes. Some argue, however, that low taxes and high economic growth can have adverse income distribution consequences or can lead to utility-reducing under-consumption of needed public goods. Evidence is presented questioning those assertions. People seek happiness by moving, and tend to migrate to low tax areas. Moreover, there is little evidence that governmental expansion leads to truly greater equality. Appropriately measured, income equality is actually far (...) greater than typically claimed. Moreover, income data suggest that the international equalization of incomes and global reduction of poverty largely reflect private sector activity, namely market forces working where the rule of law and strong protection of property rights prevails. (shrink)

One of the distinctive developments of the postwar era in the United States has been the relative decline in the economic significance of labor unions. Melvyn Dubofsky offers the hypothesis that this has resulted from a shift in public policy that represents a return to pre‐New Deal notions of the proper relationship between government and unions. But a much more likely explanation lies in the changing nature of American life. Increases in education and advances in transportation and communications have weakened (...) greatly the traditional worker‐versus‐capitalist paradigm that is at the core of Dubofsky's thinking. As this has happened, labor unions have increasingly become relics of a previous age. (shrink)