Monday, January 12, 2009

Searching for Stimulus Opponents

Pretty telling if you ask me.


via Matthew Yglesias by myglesias on 1/11/09

The House GOP's efforts to publicly solicit the names of economists opposed to the idea of an economic stimulus package is an interesting gambit. On the one hand, it reveals how crass and political John Boehner really is—he picked his policy position first, and then started looking for experts to back him second. Beyond that, it reveals how shallow the depth of opposition really is.

Brad DeLong observes that "no current or former member of the President's Council of Economic Advisers–Democrat or Republican, living or dead, sane or insane–has signed up for the Republican House caucus's list of economists opposed to the stimulus package."



GammaBoy said...

I'm an opponent. Will they sign me up?

Incidentally, in general, I am pro-spending on worthwhile infrastructure. That is one of the federal government's few legit responsibilities. But I currently have zero confidence that many of these "shovel-ready" projects will improve overall productivity, which is the purpose of improved infrastructure.

GammaBoy said...

BTW, most of the academic economists of note completely and totally missed this recession. Completely. So why is their opinion of the stimulus plan given so much weight?

Yves (KP friend?) discussed this a few days ago.

An excerpt...

Why is it that economics is a Teflon discipline, seemingly unable to admit or recognize its errors?

Economic policies in the US and most advanced economies are to a significant degree devised by economists. They also serve as policy advocates, and are regularly quoted in the business and political media and contribute regularly to op-ed pages.

We have just witnessed them make a massive failure in diagnosis. Despite the fact that there was rampant evidence of trouble on various fronts – a housing bubble in many countries (the Economist had a major story on it in June 2005 and as readers well know, prices rose at an accelerating pace), rising levels of consumer debt, stagnant average worker wages, lack of corporate investment, a gaping US trade deficit, insanely low spreads for risky credits – the authorities took the "everything is for the best in this best of all possible worlds" posture until the wheels started coming off. And even when they did, the vast majority were constitutionally unable to call its trajectory....

But if a doctor repeatedly deemed patients to be healthy that were soon found to have Stage Four cancer that was at least six years in the making, the doctor would be a likely candidate for a malpractice suit. Yet we have heard nary a peep about the almost willful blindiness of economists to the crisis-in-its-making, with the result that their central role in policy development remains beyond question.

It's worth mentioning that most of Keynes actual theories have utterly failed in practice over the last several decades (see stagflation, existence of). Yet he is still king in the media and government. It's frankly retarded, but I guess when you find an economic theory that supports your faith in government, you defend him to the death. Of the dollar, eventually.

Aztec Tomb said...

You comment about Keynes is a total non sequitur. Keynesian economics is not on trial here. The market and government are gnashing their teeth over the results of having an Objectivist Libertarian at the helm of the Fed and Laffer disciples running the White House and Congress.

My advice is to go back and really study your Hayek and see what he says about social insurance. Maybe that will shake you out of your Neo-Hooverism.

Restless Native said...

Ooohh. Neo-hooverism. Great word.

friedmanite said...

Having a libertarian run the Fed is a bit of a oxymoron. The Fed is set up so the government can intervene in a market, namely to price-fix interest rates. If a libertarian was really running it he'd probably either disband it or have the growth of the money supply fixed to some constant rate.

Aztec Tomb said...

Sorry, but he's a self-described libertarian. It's his label, not mine. Don't forget, you get a lot of libertarian types seeking office.