PoliBlog: A Rough Draft of my Thoughts

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  1. political commentators would learn to keep their powder dry

    It was kind of interesting, though, to see the Republican arguments against the bill.

    Their main talking point was that “spending doesn’t create jobs”–which basically reflects a rejection of economic logic.

    In today’s NY Times, for instance, Rep. Cantor (R) of Virginia critiqued the bill as “a spending bill beyond anyone’s imagination.” Well, yes. That’s right. That is exactly how you stimulate the economy. Dan Burton of Indiana made the nonsensical statement that the bill would lead to “socialism.”

    By rejecting the whole concept of spending, they either are happy with the current economic situation or are not being guided by an understanding of Keyensian economics.

    Maybe it is political posturing as you suggest, but I think the Bush-era penchant for rejecting fact and pragmatism might have permeated the GOP.

    Comment by Ratoe — Thursday, January 29, 2009 @ 10:54 am

  2. There is a very real chance that at the end of the day, this is where the GOP will remain.

    Comment by Dr. Steven Taylor — Thursday, January 29, 2009 @ 11:03 am

  3. I agree that we haven’t seen the end of this. And I think the Republicans took their stand a little too early. The current bill includes a lot of tax cuts to get Republican (and Blue Dog) votes; and if they aren’t getting those votes then they may not survive until the final bill.

    The main opposition to the bill is that it turned into a free-for-all. When they start acting like there’s a crisis instead of an opportunity to add spending that has nothing to do with the economy then I’ll start believing they’re serious.

    Honestly, though, anybody who watched Clinton deal with Congress during his first two years and Bush deal with Congress all but his last year or so can’t be surprised that any disagreement between members of the same party can be overcome with increased spending.

    Comment by Max Lybbert — Thursday, January 29, 2009 @ 11:48 am

  4. Their main talking point was that “spending doesn’t create jobs”–which basically reflects a rejection of economic logic. … (Spending) is exactly how you stimulate the economy. … By rejecting the whole concept of spending, they either are happy with the current economic situation or are not being guided by an understanding of Keyensian economics.

    There’s a professor of economics at Harvard who (1) is a very big fan of Keynesian economics, and (2) says recent data suggests Keynes’ classic multipliers are probably wrong in today’s economy ( http://gregmankiw.blogspot.com/2008/12/spending-and-tax-multipliers.html ):

    Bob Hall and Susan Woodward look at spending increases from World War II and the Korean War and conclude that the government spending multiplier is about one: A dollar of government spending raises GDP by about a dollar. Similarly, the results in Valerie Ramey’s research suggest a government spending multiplier of about 1.4. …

    By contrast, recent research by Christina Romer and David Romer looks at tax changes and concludes that the tax multiplier is about three: A dollar of tax cuts raises GDP by about three dollars. The puzzle is that, taken together, these findings are inconsistent with the conventional Keynesian model. According to that model, taught even in my favorite textbook, spending multipliers necessarily exceed tax multipliers.

    His advice is to have actual data — instead of outdated numbers — guide the stimulus.

    And there are a few economists who disagree with the stimulus bill altogether ( http://www.cato.org/special/stimulus09/cato_stimulus.pdf , three of those names are Nobel laureates).

    Comment by Max Lybbert — Thursday, January 29, 2009 @ 11:57 am

  5. [...] Republican Party That Can Say No I am inclined to agree with Steven Taylor (and, by extension, disagree with Nate Silver and Kevin Drum) that it’s a bit early to assume [...]

    Pingback by A Republican Party That Can Say No (Signifying Nothing: Will start a RIOT! in you) — Thursday, January 29, 2009 @ 12:53 pm

  6. Dr. Taylor: “There is a very real chance that at the end of the day, this is where the GOP will remain.”

    Some have said that this is actually good tactics on the part of the GOP: that if things go badly, the GOP will almost certainly profit, and therefore has no need to support; if things go well, the GOP will almost certainly suffer, and therefore has no gain from supporting.

    Max Lybbert Says:

    “There’s a professor of economics at Harvard who (1) is a very big fan of Keynesian economics, and (2) says recent data suggests Keynes’ classic multipliers are probably wrong in today’s economy ( http://gregmankiw.blogspot.com/2008/12/spending-and-tax-multipliers.html ):”

    Actually, there’s a former Bush hack at Harvard; that’s a far more accurate description of Manwh*re. As to his study, it’s amazing that increased gov’t spending during WWII didn’t have a massive stimulus effect – it couldn’t have been the rationing or something, could it?

    “And there are a few economists who disagree with the stimulus bill altogether ( http://www.cato.org/special/stimulus09/cato_stimulus.pdf , three of those names are Nobel laureates).”

    Considering that I just saw a Nobel laureate (Becker of the U Chic br*thel) ask in a column why monetary policy wouldn’t be sufficient, when it was in 1982 (answer is pretty Econ 101), I’ll take any right-wing Nobel laureates’ advice with a big grain of salt.

    Comment by Barry — Thursday, January 29, 2009 @ 1:26 pm

  7. Exactly, Steven. All we have had so far is the vote by the one institution that is, by design of its majority (of whichever party) the most partisan of the institutions. So hardly a surprise that they each use this as a chance to stake out positions. It’s more an initial bargaining posture than an indication of the ultimate result.

    Comment by MSS — Thursday, January 29, 2009 @ 3:25 pm

  8. See, I don’t think that Keynesian economics hasn’t been proven . . . but neither has the other school of thought. We can’t even agree on whether or not Keynesian spending helped us in the Great Depression or not! To claim that “stimulus will create jobs” is an unproven claim, as is the claim that “stimulus will not create jobs”. The reality is, we just don’t know.

    I just wish this so called stimulus did a bit more in the way of stimulating. If we’re going to go with Keynes’ plan, lets follow it rather than creating the Liberal Priorities Omnibus Act of 2009.

    Comment by B. Minich — Thursday, January 29, 2009 @ 4:25 pm

  9. i’m (more or less) in favor of the stimulus package, but i do think that insofar the repubs shame the dems into taking away some of the pork–as obama suggested he would do–then they’re truly serving the nation well.

    i want a bipartisan package for partisan reasons–i think it will serve obama well, and i support obama. but the reps are doing their proper job as the loyal opposition. i think their tone for the most part has been controlled and respectful.

    at least the elected officials. the radio personalities on the other hand…

    Comment by mbailey — Friday, January 30, 2009 @ 4:52 am

  10. [...] Steven Taylor notes, they’re not done voting yet.  They’ll get at least one more bite at the apple [...]

    Pingback by Republican Death Spiral? — Friday, January 30, 2009 @ 7:03 am

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