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September 13, 2012

Latest Posts from Economist's View

Latest Posts from Economist's View

Paul Krugman: Obstruct and Exploit

Posted: 10 Sep 2012 12:33 AM PDT

Republican obstructionism is real, and it's hurting the recovery:

Obstruct and Exploit, by Paul Krugman, Commentary, NY Times: Does anyone remember the American Jobs Act? A year ago President Obama proposed boosting the economy with a combination of tax cuts and spending increases, aimed in particular at sustaining state and local government employment. ... Macroeconomic Advisers estimated that the act would add 1.3 million jobs by the end of 2012. ... The Jobs Act would have been just what the doctor ordered.
But the bill went nowhere, of course, blocked by Republicans in Congress. ... Think of it as a two-part strategy. First, obstruct any and all efforts to strengthen the economy, then exploit the economy's weakness for political gain. If this strategy sounds cynical, that's because it is. Yet it's the G.O.P.'s best chance for victory in November.
But are Republicans really playing that cynical a game? ... As anyone who was paying attention knows, the period during which Democrats controlled both houses of Congress was marked by unprecedented obstructionism in the Senate. The filibuster, formerly a tactic reserved for rare occasions, became standard operating procedure... In ... reality ... most of Mr. Obama's time in office U.S. fiscal policy has been defined not by the president's plans but by Republican stonewalling.
The most important consequence of that stonewalling ... has been the failure to extend much-needed aid to state and local governments. Lacking that aid, these governments have been forced to lay off hundreds of thousands of schoolteachers and other workers, and those layoffs are a major reason the job numbers have been disappointing. Since bottoming out a year after Mr. Obama took office, private-sector employment has risen by 4.6 million; but government employment, which normally rises more or less in line with population growth, has instead fallen by 571,000.
Put it this way: When Republicans took control of the House, they declared that their economic philosophy was "cut and grow" — cut government, and the economy will prosper. And thanks to their scorched-earth tactics, we've actually had the cuts they wanted. But the promised growth has failed to materialize — and they want to make that failure Mr. Obama's fault.
Now, all of this puts the White House in a difficult bind. Making a big deal of Republican obstructionism could all too easily come across as whining. Yet this obstructionism is real, and arguably is the biggest single reason for our ongoing economic weakness.
And what happens if the strategy of obstruct-and-exploit succeeds? Is this the shape of politics to come? If so, America will have gone a long way toward becoming an ungovernable banana republic.

Links for 09-10-2012

Posted: 10 Sep 2012 12:06 AM PDT

Will the Fed Adopt NGDP Targeting?

Posted: 09 Sep 2012 07:01 PM PDT

I asked a question in Tim Kane's latest survey of economics bloggers (and then forgot to respond to the survey before the deadline...):


Is Romney 'Preparing for a Major Fold' on Health Care?

Posted: 09 Sep 2012 10:05 AM PDT

Brad DeLong:

Why Oh Why Did the Republicans Nominate This Clown?, by Brad DeLong: ObamaCare allows parents to keep their young-adult children on their insurance, requires insurers to offer guaranteed issue and community rates, and imposes an individual mandate to purchase insurance on individuals.

Now comes Mitt Romney:

Romney says he won't repeal all of Obamacare: Mitt Romney says his pledge to repeal President Barack Obama's health law doesn't mean that young adults and those with medical conditions would no longer be guaranteed health care.

So there we have it: Romney will keep the parts of ObamaCare that are young-adult coverage, and guaranteed issue and community rates.

It continues:

The Republican presidential nominee says he'll replace the law with his own plan. He tells NBC's "Meet the Press" that the plan he worked to pass while governor of Massachusetts…

So there we have it: Romney will keep the parts of ObamaCare that imposes on individual mandate to purchase insurance.

So what's left?

Romney says he doesn't plan to repeal of all of Obama's signature health care plan. He says there are a number of initiatives he likes in the Affordable Care Act that he would keep in place if elected president…

Like: the whole thing. Duh.

There is something very wrong with anybody working for, contributing to, or arguing for Ryan-Romney right now.

Tyler Cowen pats himself on the back:

I would say he is preparing for a major fold on the issue. I've been predicting a Romney administration would block grant Medicaid, undo some or all of the Medicare savings in ACA, but essentially keep the mandate under a different label and then claim to have "repealed and replaced." The story is here.
I won't complain about "a major fold" on healthcare, but it does bring up a question. Does Romney stand for anything? He seems to know how to set his principles aside and submit to the highest bidder -- something his touted business experience taught him I suppose. But with all of the flip-flops, Etch-a-Sketch moments, his refusal to take a stand on budget cuts, his dishonest campaigning, etc., etc., is there any principle that Romney won't conveniently overlook if it looks like there's a few votes to be gained?

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