In reality, there’s remarkable consensus among mainstream economists, including those from the left and right, on most major macroeconomic issues. The debate in Washington about economic policy is phony. It’s manufactured.
And it’s entirely political.
Let’s start with Obama’s stimulus. The standard Republican talking point is that it failed, meaning it didn’t reduce unemployment. Yet in a survey of leading economists conducted by the University of Chicago’s Booth School of Business, 92 percent agreed that the stimulus succeeded in reducing the jobless rate. On the harder question of whether the benefit exceeded the cost, more than half thought
it did, one in three was uncertain, and fewer than one in six disagreed.
Or consider the widely despised bank bailouts. Populist politicians on both sides have taken to pounding the table against them (in many cases, only after voting for them). But while the public may not like them, there’s a striking consensus that they helped: The same survey found no economists willing to dispute the idea that the bailouts lowered unemployment.
How about the oft-cited Republican claim that tax cuts will boost the economy so much that they will pay for themselves? It’s an idea born as a sketch on a restaurant napkin by conservative economist Art Laffer. Perhaps when the top tax rate was 91 percent, the idea was plausible. Today, it’s a fantasy. The Booth poll couldn’t find a single economist who believed that cutting taxes today will lead to higher government revenue -- even if we lower only the top tax rate.
The consensus isn’t the result of a faux poll of left-wing ideologues. Rather, the findings come from the Economic Experts Panel run by Booth’s Initiative on Global Markets. It’s a recurring survey of about 40 economists from around the U.S. It includes Democrats, Republicans and independent academics from the top economics departments in the country. The only things that unite them are their first-rate credentials and their interest in public policy.
As I've grown older, I've really started to hate politicians on both sides of the aisle with equal relish. I left the Democratic party several years ago, largely because I'm too "pro business." There is a distinct dislike on the left side of the aisle for people who understand markets or have any degree of financial acuity. At the same time -- and over the same period -- the Republicans have become stark-raving mad. Anyone with an IQ above that of a dead person or who thinks in nuance is the enemy.
That being said, no party in Washington is making any economic sense. The Republicans are off on an Ayn Rand austerity kick, using the Paul Ryan budget as their blueprint. This document is, well, laughable at its best. The results would be catastrophic in terms of overall growth. The Democrats, on the other hand, have absolutely no idea what policies to propose, suggest or coalesce around. They timidly make mild suggestions via the press, only to then see what the Republican (or more specifically, the Republican media apparatus) says in response, usually resulting in them backing down, with the end result being nothing happens.
Ask any sane economist (not some hack on the payroll of any think tack or in the pocket of some ideological master) and you'll get a fairly clear answer on how to handle the current situation. Macro 101 says: boost demand. Borrow at low rates, build out infrastructure (which is in terrible shape) lower blue-collar unemployment (which is in terrible shape), boost overall economic demand to increase growth. It's really not that complicated. And no, these are not fake jobs, and no, it's not ephemeral growth. It's very real.
But neither party is listening to any amount of sane reasoning right now. They're both .., well, pretty useless.
10 comments:
With respect - which democrats are you disgusted with, and why?
For example: how do you react to Barney Frank as opposed to Paul Ryan? Russ Feingold as opposed to Orrin Hatch? Elizabeth Warren as opposed to Rand Paul? Are you equally disgusted with each?
Notice that I am comparing "equivalents" as much as possible.
The more you do that, the better the democrats look.
I find it frustrating (as a democrat) because many democratic initiatives get blocked by a small number of conservative democrats. Then the democrats get blamed for being ineffective.
And if you look at sane economic proposals - the ones you support - I think they are supported by a majority of democrats in congress, and opposed by every Republican.
The answer to that is to elect more democrats.
I don't mean to sound negative - I love the blog and read it for the great economic and market analysis, not the political arguments. (I'm a "Krugman" democrat, not a DailyKos democrat.) But I share Krugman's view about 'centrists'.
You "left the Democratic Party" - save us the faux drama of your posing. We all know its broken on either end - figure out some way to advance the discussion, "dude"
I usually agree with Bonddad, but the Dems, for all their lack of cojones, are for the most part sane. The Republicans are completely batshit crazy and are pushing legislation that has nothing to do with economic problems.
Voter ID laws, shoving probes up vaginas, outlawing critical thinking (that's in Texas)--please tell me how that's supposed to create jobs? So you'll pardon me if, in the next election, I pull the switch and vote straight Democratic.
Sorry, one has to look no further than Europe to see where the liberal's big government model will take us. No thanks.
Anon
When it comes to Europe I have one word you should learn and understand:
Eruo
Oh yea here is a second word you should learn and understand:
Iceland.
The problem I have with the Democratic Party is it is both a majority liberal party and a minority conservative party making it hard to pass laws without a sane Republican Party.
Hey I am pro business and that is why I am a Democrat. Check the Economic History of the USA and as I am sure you know Hale the economy does better when Democrats are in charge.
Errr, right now what Europe is illustrating is how flawed and stupid an idea Herbert Hoover austerity is.
It is a shame we still equate the whole Democratic Party to be a liberal party because they are not. The ones (both party) that controls Congress is more of "Corparatis". That is why the Democratic is ineffective. I'm not against corporation but they are not people and need to be in check. Until we pay for our politicians, the company and the 1% will control what laws or policy govern our society. If we want sound policies we need to reform our finance campaign laws.
People who just point to Europe and look at the failure now and we should not be like them. How absurd to take one thing and generalize to everything. Of course they said the same thing for us in 2008. If you have a disagreement in policy or social program, then state that rather than the whole society. I do believe there are something USA does better but not alway and we need to implement other ideas even if the idea is not from USA.
Kudos to you for hammering on the current Republican "economics". However, I don't see the value of constantly reinforcing the "they are equivalent" meme. Yes, the Democrats have a serious timidity problem and should be criticized for that. Although to be fair, there are limits to what they can do with a limited majority and little/no public support of their economic agenda (i.e., more or less the policies that you promote here on this site).
The Kos blog site is irrelevant here. It's not representative of very many Democrats. Or is there someone else you are thinking of when you say Democrats?
Bonddad stick to what you speak well about: economics. Your analysis of politics speaks more to your personal pain over having to deal with a bunch of ignorant trolls over on DailyKos than it does any kind of understanding of our political system.
You have a party that has staked it's political fortunes on the failure of this President. They aren't Randians, they are political opportunists who have turned being the opposition party into a governing principal, rather than a political circumstance. They have consistently and repeatedly voted against policy proposals they had supported previously because Obama tried to make them happen.
The Democrats have done a poor job of making the case for more sane policies. They drive me nuts; I hear you. But step back from your frustration and your personal dealings with some trolls on the left and really think about what you're saying.
They are not the same. They are not equally bad. The more that you accept that meme, the more that the Republicans can continue to govern as nihilists. Because hey if they are equally bad, it doesn't matter who's in charge. I think if you compare Obama's policies to Bush's this should be pretty clearly wrong.
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