OP
- Thread Starter
- #21
Krugman: we didn't spend enough money in the stimulus. Great. Genius.
http://www.realclearpolitics.com/articles/2009/02/deconstructing_krugman.html below, from the article,
Let's note that Krugman is a sober, first-rate economist, but also a woolly-eyed, low-grade political hack. He firmly believes that government is better qualified than private actors to direct the country's economy, and has advocated a Federal government share of 28% of GDP, compared to the current 22% or so. Since he understands economic efficiency as few do, the conclusion is that he's committed to the social outcomes that come with government control, as opposed to the free-marketer's commitment to maximizing utility. But that's a side point.
Orthodox economic modeling holds that fiscal spending by the government will create additional GDP of the same amount, multiplied by a factor that is generally taken to be about 1.5. So ideally for Krugman, we should enact a stimulus of about $1.3 trillion over two years, with no tax cuts at all. (I'll get to the tax cuts in a minute.)
That's nearly twice the size of the program that Obama asked Congress for. If you strictly believe the models, then Obama made a horrible mistake. And in fact, Krugman excoriates the President for trying to solve two incompatible problems together: fixing the economy, and following through on the promise of a nonpartisan (or perhaps monopartisan) politics.
As a point of interest, Krugman also faults President Roosevelt on similar grounds: he believes that the New Deal failed not because it was too invasive, too destructive of private incentives, and added too much uncertainty to the business climate. Rather, he thinks the New Deal didn't go nearly far enough.
Needless to say, people like Krugman (including much, perhaps most, of the academic economics establishment outside of Chicago and George Mason University) have nothing but contempt for the ideas of the political opposition, which he scornfully calls "deep voodoo." In this view, Obama reached for bipartisanship and is on course to wreck the economy, by not being bold enough and by adding tax cuts to entice Republican support. To Krugman, Obama has already wasted his electoral mandate.
It's hard to escape the sense that the best economists and the President of the United States are blaming ordinary people for the economic crisis. If only we'd spend our money instead of save it, we wouldn't be in such a big mess.
http://www.realclearpolitics.com/articles/2009/02/deconstructing_krugman.html below, from the article,
Let's note that Krugman is a sober, first-rate economist, but also a woolly-eyed, low-grade political hack. He firmly believes that government is better qualified than private actors to direct the country's economy, and has advocated a Federal government share of 28% of GDP, compared to the current 22% or so. Since he understands economic efficiency as few do, the conclusion is that he's committed to the social outcomes that come with government control, as opposed to the free-marketer's commitment to maximizing utility. But that's a side point.
Orthodox economic modeling holds that fiscal spending by the government will create additional GDP of the same amount, multiplied by a factor that is generally taken to be about 1.5. So ideally for Krugman, we should enact a stimulus of about $1.3 trillion over two years, with no tax cuts at all. (I'll get to the tax cuts in a minute.)
That's nearly twice the size of the program that Obama asked Congress for. If you strictly believe the models, then Obama made a horrible mistake. And in fact, Krugman excoriates the President for trying to solve two incompatible problems together: fixing the economy, and following through on the promise of a nonpartisan (or perhaps monopartisan) politics.
As a point of interest, Krugman also faults President Roosevelt on similar grounds: he believes that the New Deal failed not because it was too invasive, too destructive of private incentives, and added too much uncertainty to the business climate. Rather, he thinks the New Deal didn't go nearly far enough.
Needless to say, people like Krugman (including much, perhaps most, of the academic economics establishment outside of Chicago and George Mason University) have nothing but contempt for the ideas of the political opposition, which he scornfully calls "deep voodoo." In this view, Obama reached for bipartisanship and is on course to wreck the economy, by not being bold enough and by adding tax cuts to entice Republican support. To Krugman, Obama has already wasted his electoral mandate.
It's hard to escape the sense that the best economists and the President of the United States are blaming ordinary people for the economic crisis. If only we'd spend our money instead of save it, we wouldn't be in such a big mess.
