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Greg Mankiw last week posted Larry Summers' memo to President Obama about the stimulus package. The entire document is worth reading closely.
Posted by Peter Boettke on January 29, 2012 at 06:07 PM | Permalink
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I'm guessing the blank they were looking to fill in was the size of the stimulus - not whether a stimulus was advisable, right?
As we've seen, there was quite a wide range within the administration in how big people thought it should be.
Of course if we treated every policymaking decision as a question of polling everyone that ever had an opinion on it the divergence would be wider still. But I'm not sure how much sense that makes.
If it was me, in January 2009, I would consider getting feedback from people who thought the number should be zero a waste of time. It would be like a Ron Paul administration soliciting Krugman for monetary policy advice. There's a difference between knowing what information you're curious about and polling everyone under the sun.
Daniel Kuehn |
January 29, 2012 at 06:21 PM
Jeff Friedman would probably call the point I'm trying to make above "browsing", which is often much more advisable than "searching".
Daniel Kuehn |
January 29, 2012 at 06:22 PM
President Obama likes to say his policies are based on a consensus of all leading economists. As Mankiw points out that is a function of the limited span of perspectives polled.
I understand the politics of it, but I think the claim of mainstream consesus can be questioned, and should be questioned, repeatedly.
Peter Boettke |
January 29, 2012 at 06:42 PM
Larry knew better.
Jerry O'Driscoll |
January 29, 2012 at 09:42 PM
We've never in my life-time have we seen bullshitting on the order of what we see today from Obama. Obama likes to say alot of things, but as Harry Frankfurt explains in his _On Bullshit_ Obama couldn't care one way or the other what relation what he says might have to the truth, as along as it serves his ends.
"President Obama likes to say"
Obama is our first Post-Modernist trained, Alinsky-teaching, Critical Legal Studies studying, former hard left non-Western Marxist (as reported by then-far left Western Marxist's who tried to convince Obama in discussions at Occidental that his old-school 1920s Marxism was hopelessly out of date).
It's a whole different level and acceptance of bullshitting that we have never experienced before in the Presidency of the United States, and it's something most simply would prefer to pretend isn't the new reality.
Greg Ransom |
January 29, 2012 at 10:17 PM
From the linked document:
"Your campaign proposals add about $100 billion per year to the deficit largely because rescoring indicates that some of your revenue raisers do not raise as much as the campaign assumed and some of your proposals cost more than the campaign assumed."
Will Luther |
January 29, 2012 at 10:29 PM
does anyone at the top of government have the time to read 57 page memos?
Jim Rose |
January 30, 2012 at 01:09 AM
Peter - I'm not sure politics has anything to do with it. This is an internal memo.
Greg Mankiw reports that 90% of economist agree that "Fiscal policy (e.g., tax cut and/or government expenditure increase) has a significant stimulative impact on a less than fully employed economy." http://gregmankiw.blogspot.com/2009/02/news-flash-economists-agree.html)
It seems entirely appropriate to characterize 90% as a "consensus".
When you know the consensus is to do fiscal stimulus, and you've decided that's what you're going to do, the unknown variable is "how big". So you go asking people who have non-zero answers to that question. It doesn't make sense to ask someone who's just going to tell you not to do something you've already decided is the best course.
Daniel Kuehn |
January 30, 2012 at 07:56 AM
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January 31, 2012 at 04:05 AM
"It would be like a Ron Paul administration soliciting Krugman for monetary policy advice." This is more or less right. The point, for me, is that I don't expect that politicians will embark on learning experiences in the midst of political-economic crises and therefore I don't care about this kind of stuff. But it *is* disingenuous for the Administration to claim that they couldn't find anyone who didn't think stimulus was a good idea and THEN use that to imply something good about the policy. I have no doubt that Ron Paul would do something similar, but that's what you do when you play the game.
Mario Rizzo |
January 31, 2012 at 10:48 AM
I don't think Ron Paul would say "every economist," because he's pretty frank about thinking Keynesianism is all a load of bull..
Remember the good old days of the Bush era, when a $100b increase in the deficit wasn't a rounding error?
Josh S |
January 31, 2012 at 01:30 PM
Daniel, you are completely misrepresenting Mankiw and the debate itself. "90% of economists agree that fiscal stimulus has a significant impact on a less than fully employed economy" is not the same as saying "90% of economists agreed that the 2009 stimulus bill would have a significant impact on the 2009 economy." After all, Mankiw, a neo-Keynesian, is in that first 90%, but not the second. If you read his criticism of the 2009 stimulus bill, it was not on anti-Keynesian grounds (his own textbook affirms the concept of fiscal stimulus, as he points out in his article), or even anti-government grounds, but on the grounds that the impact on the economy depends on what in particular the stimulus funds are spent on.
Josh S |
February 01, 2012 at 09:37 AM
Josh, Daniel does this kind of thing routinely ... a pattern emerges.
Greg Ransom |
February 01, 2012 at 12:56 PM
Once upon a time 90% of all evolutionary biologists were Lamarckians.
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