Sure, models always abstract from reality, so necessarily some of the details don’t fit.
But some models fit worse than others. The insistence of Chicago-school economists that there’s really no such thing as involuntary unemployment, and that when measured unemployment rises the problem is on the supply side, has always been borderline insane. When Casey Mulligan keeps pushing that line as firm after firm announces massive layoffs, a refutation isn’t really necessary, or relevant. What’s needed is a diagnosis.
A second diagnosis is needed for whatever editor at the NYT decided to keep running Mulligan’s stuff after Mulligan announced in October that McCain was right, and the fundamentals of the economy strong.
Footnote And Mulligan’s attempt to portray himself as something other than a conservative ideologue and GOP hack because he teaches the Cobb-Douglas production function and someone once called Douglas a socialist would be humorous if it weren’t so pathetic.