In particular, he asks for a concrete number for how the wage equilibrium shifts if tenure is removed:
If firing is in order, how much higher do initial wage offers have to be?
Megan McArdle gave a "toy example" that seemed more rhetorical than actual. In point of fact, moving to a small university town as a highly educated professional might be a major decision. True, in some disciplines there is a real case for a criminal over-production of PhD-level credentials. But it seems odd that the solution to this problem is to make the one part of the job chain that is actually good into something that is worse.
I'm always delighted by Tyler Cowen's insights and recommend reading the whole thing.