"Just a short hop"

As much as Blinder assures us that he is neither Republican nor Democrat (p12), and that he embraces the 18th c conception of a "liberal" in the sense of one who has respect for the virtues of the market and respect for those who the market leaves behind, his views are clear. His philosophy sounds awfully close to the fiscally-conservative yet socially-liberal argument that I've seen many liberal-minded students who have taken economics/business courses make when asked about their political views.

Blinder begins the book with an explanation of his "hard head" (free market) but "soft heart" (concerned with distributional justice). I thought his description of a "true liberal" at the beginning of the book was particularly funny. Have any of us ever cheered for the underdog (when we don't have a preference for either team), just because they are loosing?

I think he makes some of his most controversial points in his chapter discussing unemployment & inflation, opinions which he certainly carried over into his stint as Vice Chairman of the Board of Governors of the Fed (1994-1996). He comes off as a strong Keynesian and his arguments for more emphasis on unemployment and less on what he claims to be rather unfounded fears of inflation identify his liberal-mindedness (in very much the 21st c conception of the word). He believes in activist gov policy that aims to maintain the economy at full unemployment and he claims that for every percentage-pt reduction in the inflation rate, we must accept a 2 pt or to increase for 1 year in unemployment (Phillips Curve). Thinking back to the SRPC and the LRPC, I would have to agree with his assertion that the inflation-unemployment trade off is only a short-run phenomenon, meaning that the only wya to keep unemployment down in the long-run is to accept steadily increasing inflation.

However, I am not so convinced with Blinder's logic behind the redistribution of wealth. He discusses the robin hood-esque argument of poor men valuing dollars more than rich men, and then says that it is only a "short hop" to the conclusion that the gov must redistribute income from the rich to the poor. He is clearly underestimating the distance of that jump and oversimplifying what the heat behind the debate between liberal v. conservative economic philosophy.