Wombaticus Rex wrote:Today at work I had an article scrapped because it was "too Socialism" -- it was simply an examination of how "jobs" have been created in the past, and how to actually get out of a recession. My conclusion was that deficits were not the problem, but rather how that money was being spent. An investment into public works, US infrastructure, subsidizing small businesses like we do multinationals, and education/job training would be the best path to take, according to recent history.
This concept is apparently deviating too far from the pale..."too Socialism"...so now I'm re-hashing some lies from the US Chamber of Commerce for more palatable content for Mormons, Creationists, Law of Attraction fetishists, Ayn Rand disciples and CNBC cowboys.
But hey, enough about my stellar career, right? The real question is, am I wrong? ...or is public works spending, small biz incentives and infrastructure re-investment the way to go for actual job creation?
You are right. And the deficit hawks
are so wrong that they don't even really have an argument that their own arsenal of bizarre Milton-Friedman-esque economic formulae supports.Paul Krugman has been S-P-E-L-L-I-N-G this out in both his column and his blog with such indisputable clarity that after he did a column entitled
Myths of Austerity, in which he wrote, in part...
For the last few months, I and others have watched, with amazement and horror, the emergence of a consensus in policy circles in favor of immediate fiscal austerity. That is, somehow it has become conventional wisdom that now is the time to slash spending, despite the fact that the world’s major economies remain deeply depressed.
This conventional wisdom isn’t based on either evidence or careful analysis. Instead, it rests on what we might charitably call sheer speculation, and less charitably call figments of the policy elite’s imagination — specifically, on belief in what I’ve come to think of as the invisible bond vigilante and the confidence fairy.
Bond vigilantes are investors who pull the plug on governments they perceive as unable or unwilling to pay their debts. Now there’s no question that countries can suffer crises of confidence (see Greece, debt of). But what the advocates of austerity claim is that (a) the bond vigilantes are about to attack America, and (b) spending anything more on stimulus will set them off.
What reason do we have to believe that any of this is true? Yes, America has long-run budget problems, but what we do on stimulus over the next couple of years has almost no bearing on our ability to deal with these long-run problems. As Douglas Elmendorf, the director of the Congressional Budget Office, recently put it, “There is no intrinsic contradiction between providing additional fiscal stimulus today, while the unemployment rate is high and many factories and offices are underused, and imposing fiscal restraint several years from now, when output and employment will probably be close to their potential.”
Which evidently prompted whoever it is that gives the freakishly upper-lipless David Brooks his marching orders to tell him to get cracking with the discrediting already. Because he dedicated his very next available column to a barely disguised ad hominem attack on his pointy-headed colleague, in which
he wrote (in part):
Let’s say you’re the leader of the free world. The economy is stuck in the doldrums. Naturally, you want to do something.
Many economists say we need another stimulus bill. They debate about whether the stimulus should take the form of tax cuts or spending increases, but the ones in your party are committed to spending increases. They trot out a plausible theory with computer models to go with it. If the federal government borrows X amount of dollars and pumps it into the economy, that would produce Y amount of growth and Z amount of jobs. In a $14 trillion economy, you’d probably have to borrow hundreds of billions more to have any noticeable effect, but at least you’d be doing something to help the jobless.
[snip]
These Demand Siders have very high I.Q.’s, but they seem to be strangers to doubt and modesty. They have total faith in their models. But all schools of economic thought have taken their lumps over the past few years. Are you really willing to risk national insolvency on the basis of a model?
Moreover, the Demand Siders write as if everybody who disagrees with them is immoral or a moron. But, in fact, many prize-festooned economists do not support another stimulus. Most European leaders and central bankers think it’s time to begin reducing debt, not increasing it — as do many economists at the international economic institutions. Are you sure your theorists are right and theirs are wrong?
Which won him
the following blog-post smackdown from Krugman,
who is (as you are) right:Arguments From Authority
A quick note on David Brooks’s column today. I have no idea what he’s talking about when he says,
The Demand Siders don’t have a good explanation for the past two years
Funny, I thought we had a perfectly good explanation: severe downturn in demand from the financial crisis, and a stimulus which we warned from the beginning wasn’t nearly big enough. And as I’ve been trying to point out, events have strongly confirmed a demand-side view of the world.
But there’s something else in David’s column, which I see a lot: the argument that because a lot of important people believe something, it must make sense:
Moreover, the Demand Siders write as if everybody who disagrees with them is immoral or a moron. But, in fact, many prize-festooned economists do not support another stimulus. Most European leaders and central bankers think it’s time to begin reducing debt, not increasing it — as do many economists at the international economic institutions. Are you sure your theorists are right and theirs are wrong?
Yes, I am. It’s called looking at the evidence. I’ve looked hard at the arguments the Pain Caucus is making, the evidence that supposedly supports their case — and there’s no there there.
And you just have to wonder how it’s possible to have lived through the last ten years and still imagine that because a lot of Serious People believe something, you should believe it too. Iraq? Housing bubble? Inflation? (It’s worth remembering that Trichet actually raised rates in June 2008, because he believed that inflation — not the financial crisis — was the big threat facing Europe.)
The moral I’ve taken from recent years isn’t Be Humble — it’s Question Authority. And you should too.
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The fun just never ends over there, I'm telling you.
Anyway. I actually highly recommend consulting Krugman's blog (
The Conscience of a Liberal) for all your strictly macroeconomic needs. He's always right when he's on his turf. To the point that it was almost a relief to see the housing bubble burst, just for the sake of his macroeconomic rightness streak. He'd been calling it for, five years already, I was beginning to get worried.
Only almost, though. In reality, I would prefer that Paul Krugman be wrong than that millions of people all over the world live in want, sickness, and oppression.
Controversial, I know.
