The conservative economists, on the other hand, are shills and hatchet men. They're not stupid. They are amoral charlatans.
On to the broader point. What one sees in this particular Mulligan piece is something I encounter all the time, in many contexts: the myth of the stupid progressive economist. It works like this: Conservatives in general, and conservative economists in particular, often have a very narrow vision of what economics is all about — namely supply, demand, and incentives. Anything that interferes with the sacred functioning of markets or reduces the incentive to produce must be a bad thing; any time a progressive economist supports policies that don't fit neatly into this orthodoxy, it must be because he doesn't understand Econ 101. And conservative economists are so sure of this that they can't be bothered to actually read what the progressives write — at the first hint of deviation from laissez-faire, they stop paying attention and begin debating with the stupid progressive in their mind, not the real economist out there. As a result, many conservatives seem utterly unable to take on board the notion that people like Jon Gruber or yours truly might understand Econ 101, but also believe with good reason that you need to go beyond that point. On the health care issue: yes, there are incentive effects — as there are with all insurance, by the way. But there's also good reason to believe that there's a major market imperfection in the form of job lock, and that even aside from this, there are important benefits to expanding health insurance that must be weighed against any costs. All of that is, in brief, in both of the pieces Mulligan denounces, and there at much greater length in our other writings; but as so often happens, conservatives develop problems of reading comprehension whenever such issues come up. I've encountered similar responses on many other issues. You say that deficit spending is helpful in a depressed economy? You must be saying that deficits and bigger government are always good, which is stupid hahaha. You say that increasing unemployment benefits in a demand-constrained economy can create jobs? But you also said once upon a time that unemployment insurance can raise the natural rate of unemployment, so you're stupid hahaha.
A tangential aside. Having majored in Economics, there are few things more aggravating than hearing some buffoon (and they are legion) shout "It's Economics 101!" Having a superficial understanding of economics, or "Econ 101", is worse than knowing nothing at all.