[yummyfajitas]

The main reason his theory is crap is it just doesn't agree with experiment. The article mentions several, all of which tend to encompass the income regime Karelis is presumably talking about. One example is the negative income tax experiment of the 70's, another is welfare to work.

If Karelis has evidence of his theory, he should present it. But as it stands, he is pushing thought experiments and analogies, and telling us to ignore the empirical evidence when it disagrees with his theory.