Wednesday, September 28, 2011

Whose recession?

Picturing the world if Hilary had been elected President instead of Barack Obama, or if John McCain had been elected running against Hilary, is always a fun and interesting game. But here we are, with the President we have. We've had a stimulus that was too small, a conservative, barely adequate health care/insurance reform package passed, and in the past twelve months a series of confrontations where Republicans got most of what they wanted in exchange for not making millions of Americans suffer more than they are.

You may disagree, but I think that among educated people paying attention, many if not most are turning to Paul Krugman for guidance, unless they are locked into a conservative view that only allows truth to come from the Wall Street Journal. But although there are many conservative pundits, as far as I know there is no particular conservative economic authority, no individual to rival the status of Krugman. It has been pointed out that almost (if not) all the high level economists who work for the President and the government sit on boards of banks and other financial institutions, and so have perhaps not pursued financial reform with the sort of zeal required by the current recession (see the movie "Inside Job").

So this is the stage we find ourselves on, with Krugman on one side advocating a stronger Keynesian approach, and Republican politicians and conservative pundits arguing for lower taxes (on the rich) and less regulation as a panacea on the other side. David Brooks fancies himself a smart pundit, trying to find truth by politely listening to liberals before dismissing their views. His column yesterday, titled "The Lost Decade", by it's very title evoked the notion of the Japanese economic crisis of the 1990's, which Paul Krugman has written about. Was Brooks going to suddenly start advocating further stimulus?

Well, no. Actually, Brooks raises the "false equivalency" specter, that neither conservatives with their cuts or deregulation nor liberals with their stimulus have the complete answer. He seems to argue that both approaches should be attempted, although in complaining about how the current jobs bill is too small, Brooks doesn't actually call for a larger one. Instead he pivots and calls for the full menu of Republican proposals.

All of which is no surprise. I don't believe Brooks has any advanced training in economics, I suspect he would call his approach "common sense" (i.e., unpolluted by academic tools of analysis using history and models). I What did surprise me, after I had read the whole thing, was that I realized David Brooks did not mention the unemployed or unemployment once, and used the phrase "job growth" only once, in his lead paragraph. In the paragraph where he describes the "currents" of this recession. Unemployment is conspicuous by its absence.

I remember that before the midterm elections, Republicans hammered the Democrats over unemployment. Since the midterms, Republicans have forgotten about the unemployed. Except last December, when they wanted to cut off unemployment benefits to millions of Americans with out a job since Bush was President.

Krugman here responds to Brooks (at least partially). Personally, my thoughts turn to Joseph Welch when he famously said to Joe McCarthy "Have you no sense of decency" (which I tend to remember as "have you no shame", but I suppose accuracy is better).

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