We are all Keynesians now
Editorial, Boston Globe, November 25, 2008
Bush’s economic stimulus didn’t work, quite simply, because people banked the tiny checks or spent the money on foreign-produced goods. It was a political move that failed because it was bad policy. And every thinking person knew it at the time.
Obama’s stimulus promises to be far more effective. I’m glad it will be big, because it needs to be. I just hope it’s big enough.
My advice to the Obama people is to figure out how much help they think the economy needs, then add 50 percent. It’s much better, in a depressed economy, to err on the side of too much stimulus than on the side of too little.
~Paul Krugman, NY Times, November 10, 2008
It matters, though, how the money is spent and I think the Obama economic team is smart enough to understand that. They are, as Obama assured us, “the best minds in America.”
Still, it is important that the money be spent strategically. Sending rebate checks directly to citizens didn’t work for the Bush administration, as anxious Americans mostly banked the cash. And just distributing infrastructure funds through block grants to the states could end up undermining environmental sustainability, another priority, by contributing to sprawl in the politically powerful suburbs.
But Obama, like his appointees, is more a problem-solver than an ideologue.
Whew! Haven’t we had enough of idealogues, especially the Friedman type? I’ll take a pragmatic Keynesian any day.
He understands that healthcare, education, and energy reform will drive the nation’s long-term recovery.
Hear, hear. Our health care “system” is bankrupting families and our economy. It is a huge burden on large and small businesses alike, not to mention medical providers and taxpayers. It also stifles, in a very real way, innovation and entrepreneurship, which are too often left out of the health care discussion.
Our current economic model is clearly not working. Neither is our head-in-the-sand, anti-intellectual, god-will-bail-us-out apocalyptic mentality. Investing in a green revolution will create jobs, stimulate the economy, and eventually pay for itself much the way the handouts of the G.I. Bill have returned dividends to taxpayers many times over. In fact, it seems like every time Obama opens his mouth recently the markets react positively.
I’m excited and hopeful for the future of the country that is finally run by intellectuals. Good riddance, W. January 20, 2009 can not come soon enough.