Friday, January 09, 2009
Spinning out of control?
With each passing day, Obama's massive economic stimulus package appears more like a standard liberal wish list than a strategic economic stimulus package. ... Since when are middle-class tax cuts 'trickle down' economics? ... Paul Krugman may have diagnosed the economic problems well. But for every Nobel laureate like Krugman who says the solution is more spending, there's a Nobel laureate who says it ain't. Not even Obama's lead economic adviser, Christina Romer, thinks fiscal policy has historically proven effective. Granted, these are unique times. I'm not against massive government spending to help the economy. My personal wish list is more spending on the infrastructure and scientific research (medical, alternative-energy, NASA etc. -- to which I'd add outright tuition grants for aspiring new engineers and scientists). But when Congressmen start talking about 'jobs' for jobs' sake, you know you're in Christmas tree territory. ...
... The non-Nobel-laureate Hub Blog is working on a theory: supply-side tax cuts work somewhat well during mild to medium level recessions, while a dose of Keynesian spending works somewhat well during more severe times. The irony is that excesses by supply-siders sometimes create the conditions for Keynesianism, while the excesses of Keynesians create the conditions for supply-side. Not a bad theory, if I may say so, especially the irony part -- which I'm quite serious about. ...
One other non-Nobel-laureate Hub Blog theory/observation: The Chicago School vs. Keynesian debate about economics is starting to remind me of the old Pentagon debates about war-fighting strategies, i.e. it always came down to an all-or-nothing argument about who's right or wrong. Thus you had 'Powell Doctrine' vs. 'Light Warfare' or 'Light warfare' vs. 'counter-insurency.' As if you couldn't use a number of alternative approaches and combinations at different times.
With each passing day, Obama's massive economic stimulus package appears more like a standard liberal wish list than a strategic economic stimulus package. ... Since when are middle-class tax cuts 'trickle down' economics? ... Paul Krugman may have diagnosed the economic problems well. But for every Nobel laureate like Krugman who says the solution is more spending, there's a Nobel laureate who says it ain't. Not even Obama's lead economic adviser, Christina Romer, thinks fiscal policy has historically proven effective. Granted, these are unique times. I'm not against massive government spending to help the economy. My personal wish list is more spending on the infrastructure and scientific research (medical, alternative-energy, NASA etc. -- to which I'd add outright tuition grants for aspiring new engineers and scientists). But when Congressmen start talking about 'jobs' for jobs' sake, you know you're in Christmas tree territory. ...
... The non-Nobel-laureate Hub Blog is working on a theory: supply-side tax cuts work somewhat well during mild to medium level recessions, while a dose of Keynesian spending works somewhat well during more severe times. The irony is that excesses by supply-siders sometimes create the conditions for Keynesianism, while the excesses of Keynesians create the conditions for supply-side. Not a bad theory, if I may say so, especially the irony part -- which I'm quite serious about. ...
One other non-Nobel-laureate Hub Blog theory/observation: The Chicago School vs. Keynesian debate about economics is starting to remind me of the old Pentagon debates about war-fighting strategies, i.e. it always came down to an all-or-nothing argument about who's right or wrong. Thus you had 'Powell Doctrine' vs. 'Light Warfare' or 'Light warfare' vs. 'counter-insurency.' As if you couldn't use a number of alternative approaches and combinations at different times.
