But the US is no in deep doo-doo. Obama is trying to come up with a package to get the US out of the toilet and do it in a way that will get some buy in from the ideological right wing Republicans. Do they thank him? Do they show any patriotic concern about getting behind him to save the country? Nope... suddenly they are concerned with "big spending" and, of course, they are very unhappy that Obama has any thought about letting Bush's big tax cut for the rich die, so they are yelling for more tax cuts for the rich, for the removal of all corporate taxes, for the elimination of capital gains taxes. And they literally froth at the mouth over Obama's plans to spend and stimulate the economy.
Here's Brad DeLong pointing out the cynical hypocrisy of these ideologues and how phoney their economic "credentials" really are:
Stupidest Party AliveWe have our own right wing party in power here in Canada. They are ideological hacks, but they have not yet done the damage to the social fabric which the Republicans have done in the US. I sure hope the electorate here can learn some lessons from the disasters south of the border. So far the stranglehold of the right on the private media in Canada (and the governement-led threats to the public media) have successfully kept the full horrors of what is happening to the south of us become really obvious here in Canada. But just as the US electorate has woken up from a long nightmare, I'm hoping that the Canadian electorate will rise up from their sloth and overthrow the Conservatives and put the liberals and/or social democrats back in power to get us away from the fanatical right wing agenda.
People who have endorsed the Republican House caucus's objections to the stimulus package:
Donald Luskin, Chief Investment Officer, Trend Macrolytics LLC, Stupidest Man Alive Emeritus: "Government spending does not create incentives for labor, innovation and investment. Instead of spending $1 trillion in Washington, let Washington forgive $1 trillion in tax revenues to create incentives for millions of individuals and firms to get the economy going again, one dollar at a time."
People who have not the Republican House caucus's objections to the stimulus package:In fact, 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. None. Zero. Nada. Sifr. Efes. Wala sero. Kosong sifar. 'Ole. Knin. Pujyam. Mann. Dim. Nocht. Null. Meden. Hitotsu. Sifuri. Ling. Sunya. Mwac. Ataqan. Saquui. Hun. Illaq. Wanzi. Wanzi. Pagh. Na. Uqua.
- Eddie Lazear, Chair, President's Council of Economic Advisers (George W. Bush)
- Matthew Slaughter, Member, President's Council of Economic Advisers (George W. Bush)
- Katherine Baicker, Member, President's Council of Economic Advisers (George W. Bush)
- Ben Bernanke, Chair, President's Council of Economic Advisers (George W. Bush)
- Harvey Rosen, Chair, President's Council of Economic Advisers (George W. Bush)
- Kristen Forbes, Member, President's Council of Economic Advisers (George W. Bush)
- N. Gregory Mankiw, Chair, President's Council of Economic Advisers (George W. Bush)
- Randall Kroszner, Member, President's Council of Economic Advisers (George W. Bush)
- Mark McClellan, Member, President's Council of Economic Advisers (George W. Bush)
- R. Glenn Hubbard, Chair, President's Council of Economic Advisers (George W. Bush)
- Paul Wonnacott, Member, President's Council of Economic Advisers (George H. W. Bush)
- Richard Schmalensee, Member, President's Council of Economic Advisers (George H. W. Bush)
- John Taylor, Member, President's Council of Economic Advisers (George H. W. Bush)
- Michael Boskin, Chair, President's Council of Economic Advisers (George H. W. Bush)
- Michael Mussa, Member, President's Council of Economic Advisers (Ronald Reagan)
- Thomas Moore, Member, President's Council of Economic n SpriyAdvisers (Ronald Reagan)
- Beryl Sprinkel, Chair, President's Council of Economic Advisers (Ronald Reagan)
- William Poole, Member, President's Council of Economic Advisers (Ronald Reagan)
- Martin Feldstein, Chair, President's Council of Economic Advisers (Ronald Reagan)
- Jerry Jordan, Member, President's Council of Economic Advisers (Ronald Reagan)
- William Niskanen, Member, President's Council of Economic Advisers (Ronald Reagan)
- Murray Weidenbaum, Chair, President's Council of Economic Advisers (Ronald Reagan)
- Burton Malkiel, Member, President's Council of Economic Advisers (Gerald Ford)
- Paul MacAvoy, Member, President's Council of Economic Advisers (Gerald Ford)
- Alan Greenspan, Chair, President's Council of Economic Advisers (Gerald Ford)
- Gary Seevers, Member, President's Council of Economic Advisers (Gerald Ford)
- Marina von Neumann Whitman, Member, President's Council of Economic Advisers (Richard Nixon)
- Paul McCracken, Member, President's Council of Economic Advisers (Richard Nixon)
Nobody.
That should tell you something about today's Republican Party.
Other ethics-free Republican hacks, whose organizations share in their burning of their own credibility:
Michael Cannon, Cato Institute: "The only way Congress can spend money is to extract it from the private sector – either by taxing it, borrowing it, or seignorage. The question then becomes: will Congress spend that money more wisely than the private sector would have spent it? The answer appears to be no. Congress typically spends according to its political priorities, not economic priorities."
Antony Davies, Associate Professor of Economics, Duquesne University: "It is time for voters to wake up to the fact that government cannot create jobs. It can only shift jobs from one part of the economy to the other. It is entrepreneurs who create jobs, and it is consumers who judge whether those jobs are the best jobs to be created. The government contributes best by establishing a rule of law and protection of property rights that allows entrepreneurs and consumers to act in their best interests."
Joseph Zoric , Associate Professor of Economics, Franciscan University of Steubenville: "The stimulus plan will most probably turn quickly into pork spending. Marginal rate tax cuts would be a much more effective way to stimulate demand along with cuts in the capital gains and corporate tax rates. Evidence shows that marginal tax cut multipliers are much higher than spending multipliers. In addition the Fed is still not out of ammunition."
Edward Lopez, Associate Professor of Law and Economics, San Jose State University: "Fiscal stimulus may have symbolic value and certainly does provide an expedient for distributive politics, but there is NO evidence that it contributes to GDP or economic growth more broadly."
Justin Ross, Assistant Professor of Economics, School of Public and Environmental Affairs, Indiana University: "Empirical evidence overwhelmingly rejects federal government deficit spending as the best method for stimulating the economy, and is generally unsupportive of it having any stimulus effect at all."
Steven Horwitz, Charles A. Dana Professor of Economics, St. Lawrence University: "The stimulus plans assume consumption is the source of economic growth. It is not. It is the consequence of said growth. The ‘stimulus’ is a redistribution of spending, at best, and will do little to help. The next Administration should avoid large scale programs and experimentation and allow the marketplace to correct the errors made by the last 8 years of misguided intervention."
Richard Wagner, Professor of Economics, George Mason University: "Any so-called stimulus program is a ruse. The government can increase its spending only by reducing private spending equivalently. Whether government finances its added spending by increasing taxes, by borrowing, or by inflating the currency, the added spending will be offset by reduced private spending. Furthermore, private spending is generally more efficient than the government spending that would replace it because people act more carefully when they spend their own money than when they spend other people's money."
Stephen Entin, President & Executive Director, Institute for Research on the Economics of Taxation: "Want to grow the economy without inflation? Cut marginal tax rates, slash the corporate rate, expense investment in the first year (instead of depreciation), keep tax rates low on dividends and capital gains, and repeal the death tax. Have the Federal Reserve focus on price stability and a sound dollar, and on not generating a monetary roller coaster. (That, in part, is what caused the housing and commodities bubbles.) Rein in government spending to pay for the tax cuts, and trim senseless regulation."
Gary Wolfram, William Simon Professor of Economics, Hillsdale College: "Rather than old style Keynesianism we should reduce the corporate income tax substantially. The problem is not lack of demand, but rather a lack of investment. By reducing the corporate income tax, among the highest in the industrialized world, we will increase the incentive for companies to invest in new equipment, technology, research and development, and buildings. This will increase productivity in the long run, leading to higher GDP and higher wages.”
Lawrence Franko, Retired Professor, University of Massachusetts Boston, College of Management: "Government ‘infrastructure spending stimulus’ programs in Japan during the 1990s produced no stimulus, but rather a vast overhang of government debt. Bridges, tunnels, roads, and trains to nowhere stimulate nothing. It is productivity growth that counts, and that comes mainly from the private sector – which is why tax cuts have always been a surer way to economic recovery.
Michael Sykuta, Associate Professor, University of Missouri – Columbia: "Government intervention and ‘stimulus’ in the housing market is largely responsible for the current economic crisis. History has shown that the Obama team’s proposed ‘stimulus’ is not only going to have little to no effect in the short run, but will create a larger bureaucratic structure, lead to tremendous investments in unproductive political lobbying among ‘stimulus project’ wannabes, and dissuade/delay private investment, recovery and growth."
David Laband, Professor of Economics and Policy, Auburn University: "Our economy as a whole will [no] benefit from taking money from current or future taxpayers to support a government spending spree. No doubt, certain interest groups will gain from feeding at the public sector trough. But losers surely will outnumber winners by a large margin. Our economy as a whole will benefit from Congress lowering taxes and letting Americans decide for themselves what is worth spending their hard-earned dollars on."
Howard Baetjer, Lecturer, Dept. of Economics, Towson University: "A government-spending ‘stimulus’ is a very bad idea. Because government can spend only what it has taxed or borrowed away from the public, it creates no new demand but merely redirects it. Recovery depends on profit and loss discipline and public confidence that the basic rules underlying free markets will be followed. The latter is hurt by government interventions such as ‘stimulus.’"
Glen Weyl, Junior Fellow at the Society of Fellows and Post-Doctoral Fellow in the Department of Economics, Harvard University: "Nothing about a recession justifies larger government. If we are worried about too few jobs, it makes sense to subsidize private employment (for example, by temporarily lowering payroll taxes or creating a new tax subsidy for new hires)."
Henry Thompson, Professor, Auburn University: "The current recession was caused by government fiddling with the mortgage market and the moral hazard created by the illusion of government monitoring of financial markets. Increased government involvement in the economy is not the solution."
Gene Smiley, Emeritus Professor of Economics, Marquette University: "An ‘economic stimulus’ program will do nothing to correct the serious price and resource misallocations that currently exist and are stopping the economy from moving back toward ‘full-employment.’ In fact, they will likely retard the recovery. They will divert resources from the private sector to the government sector moving us further away from a free-enterprise economy.
Stacie Beck, Professor, University of Delaware: "A spending stimulus will only delay the needed restructuring of the U.S. economy to remain internationally competitive. Tax cuts will facilitate that restructuring far better than spending and job creation by the government."
Steve Entin's presence on this list is sad. He was an economist once upon a time...
5 comments:
As one of the economists in the list DeLong attacked, let me just note three things:
1. I am not now, nor have I ever been a registered Republican, nor ever voted Republican in the 26 years I've been of legal voting age.
2. I spent the entire 8 years of the Bush presidency complaining about his fiscal policy, including his extraordinary spending on a ridiculous war. And, btw, so did many "Right-wing" think tanks. To say they didn't complain about his fiscal policy is a flat out lie.
3. I have recently said, in print, that Bush might be the worst president ever. http://austrianeconomists.typepad.com/weblog/2008/12/and-the-verdict-is-in.html
So instead of aping DeLong's lies, why don't you do some actual reading about what people actually wrote instead of deploying the worst sort of simplistic thinking?
Not everyone who thinks Obama is wrong on the stimulus is some sort of ditto-head Bush supporter. Unlike you, some of us can think for ourselves and believe that both parties might have it wrong.
Steven Horwitz complains that he has been misrepresented, but if you go to his website you can read statements that show he blames "regulation" for all the economic ills. In short he is an unrepentant right winger who says he never voted Republican. Hmmm. Here are his own words:
"To call the housing and credit crisis a failure of the free market or the product of unregulated greed is to overlook the myriad government regulations, policies, and political pronouncements that have both reduced the "freedom" of this market and channeled self-interest in ways that have produced disastrous consequences, both intended and unintended. Let me briefly recap goverment's starring role in our little drama. ...
The current mess is thus clearly shot through and through with government meddling with free markets..."
These views are peculiarly ideological. Those not caught up in this jaundiced view of the world would argue that the mess was in fact a problem of free markets familiar from a century and a half of panics, crises, recessions, and depressions. For Horwitz to say that the current problem is "government meddling in free markets" is to fundamentally misunderstand the role of government is regulating markets and reigning in excesses. He obviously ignores Keynes. His approach to the economy has been in power in Washington for nearly 30 years and has led to the greatest collapse since the Great Depression. But rather than accept facts, he continues to right wing complaint voiced by Ronald Reagan:
"Government is not the solution to our problem. Government is the problem."
It is utterly obvious to everyone but the right wing ideologues, such as Steven Horwitz, that this philosophy of government is bankrupt and that the view of radical laissez faire he espouses has bankrupted not just Wall Street but Main Street.
So wait a minute. On the one hand, you say: "Nobody complained when Bush cynically ran up big debts or went to war with a "guns & butter" approach" and then on the other you say that the last however many years have been years of "laissez-faire."
Don't you see the OBVIOUS FACTUAL contradiction there? This is not about ideology. You want to blame everything on laissez-faire, but admit yourself that the Bush administration ran up huge budget deficits by spending on the war. (I'd add the big Medicare benefit as well, not to mention billions to No Child Left Behind etc.)
Those are FACTS. You can't blame Bush (rightly!) for running up big deficits and claim he was adhering to a laissez-faire philosophy. It's a contradiction.
Meanwhile, you simply assert laissez-faire is to blame for the current crisis, offering not one piece of evidence or argument in response to my "open letter." Mere assertion that I ignore Keynes (hardly!) or that I misunderstand the role of gov't won't do.
You need to show me how laissez-faire is at fault while you simultaneously continue to blame the Bush administration for running up deficits by spending more than they taxed. If you can do that, you'll deserve a tenured professorship in philosophy for having re-written the laws of logic.
When all you have in your arsenal is calling people ideologues, it's a sure bet you don't have your facts or arguments straight.
And I HAVE been misrepresented: you still haven't given us any evidence that I have anything to do with the Republican party. That was the charge against me, no?
You are right to say that Bush went "off the reservation" with his spending. He was not purely laissez faire in his economics. I will grant you that point.
Bush may not be a laissez faire purist, but he is part of the right wing ideological wave of "kill the beast" anti-government thinking which has been in power since Reagan in 1980. This movement's strategy is to run up deficits in order to tie the hands of Democrats when they regain power.
As for your rhetorical maneuver demanding that I prove to you that laissez faire is at fault for the current financial ills... I refuse to rise to your baiting. Just as I would refuse to rise to the baiting of a Flat Earth ideologue who would make the demand: "you have to prove to me that the earth isn't flat". Sorry. Sir, yours is the minority view. You have the burden of proof, not me.
Just as I would not belabour myself with the hopeless task of convincing a Flat Earth ideologue that the world is not flat, I won't take the time to play your game and prove to you that the current crisis has been caused by a failure of regulation which led to a banking crisis which, in turn, has created a liquidity crisis, and that has stopped credit with the result that Main Street now teeters on the edge of a general depression.
You complaint that I painted you as a Republican is false. I identified two groups. The fact that they generally overlap was not my point. You complaint that I called you "Republican" is your own mis-reading. You were named by Brad DeLong as an economist and you teach at a university. So you meet the criteria of the group I named: "Republicans and right wing economists". Would you demand that somebody who said that elephants and gorillas are big animals retract the statement because a gorilla is clearly not an elephant?
I was not "aping DeLong's lies". First, I was quoting DeLong. I presume when you quote scholars you are not "aping" them. Second, I find it outrageous that you claim that DeLong is spreading lies. While I have not read every word you and he have printed, I would suspect that his position and reputation are evidence that he is not in the business of pandering lies. The brief review I took of your website shows me that you are much more likely to hold extreme views, views less buttressed by sound argument, than Brad DeLong. I won't "prove" to you that DeLong is not a liar. Again, it is incumbent upon you to prove that your claims have merit and provide the proof that DeLong has defamed you or misrepresented you.
As for having identified Bush as the worst president. I commend you for that. But you and I are at different ends of the sprectrum. You are outraged at Bush for not sticking to you extremist right-wing laissez faire ideals. I'm over at the other end of the political spectrum outraged at how Bush has destroyed the middle class with the same indifference he showed to the poor of New Orleans in the Katrina disaster.
Thanks for moving the goalposts, I can declare victory now.
Two final points:
1. The middle class has not been destroyed. I can show you plenty of data to demonstrate that the US middle class is smaller because more households have moved up, but you'll just dismiss that as Flat Earth thinking. I'll just note that calling it Flat Earth thinking is NOT an argument. It's an ad hominem. Your reluctance to engage in substantive debate speaks volumes about how confident you are in your position and how much you really have to back it up.
2. I share your outrage at the Bush administration's incompetence during Katrina. In fact, I've written about it. You won't like what I have to say, but I agree with you that it screwed up big time. I'd give you a link, but you aren't willing to engage in serious conversation with people who disagree with you (hence "aping DeLong"), so I won't bother.
Seriously, though, try getting out of your simplistic categories. Try to imagine someone who thinks freer/freed markets are the best means toward many of the goals of the left. Try to imagine someone who strongly supports markets but also opposes the war(s), is in favor of same-sex marriage, is pro-choice on abortion, is a First Amendment absolutist, is pro-immigration, and who has nothing but contempt for Bush, his cronies, and the whole religious right.
See if your imagination can get you that far. If it can, maybe you'll realize that you can't just name-call people as a substitute for argument. And maybe you'll realize that the world doesn't divide up into three categories:
1. People who agree with your views.
2. The evil
3. The stupid
Not everyone who disagrees with you is the equivalent of a Flat Earther. Til then, good luck living in a bubble.
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