- Links for 10-21-2012
- Romer: The Fiscal Stimulus, Flawed but Valuable
- Robber Barons
- 'The Moral Benefits of Economic Growth'
Posted: 21 Oct 2012 12:06 AM PDT
Posted: 20 Oct 2012 02:58 PM PDT
After going through the considerable historical and empirical evidence that the fiscal stimulus worked, she concludes:
That seems to come dangerously close to saying that a "Mr. Awesome" as president might have made the recovery much better. But not quite, at least not if one has Romney's claims about himself in mind. As Paul Krugman noted in his last column, Mr. Romney "doesn't have a plan. ... Mr. Romney himself asserted that he would give a big boost to the economy simply by being elected, 'without actually doing anything'..., the true Romney plan is to create an economic boom through the sheer power of Mr. Romney's personal awesomeness."
To put it another way, Romney would cure the economy by relying upon a placebo effect, an effect that somehow works through the powers of his personality. The Obama cure provided too little medicine, and there was not enough communication with the patient -- both could have been improved -- but the medicine it did provide was real, not a placebo, and it did have positive effects.
Posted: 20 Oct 2012 11:00 AM PDT
The entry below this one reminded me of this old post featuring Brad DeLong on the Robber Barons (he wrote this in 1998, the actual essay is much, much longer):
Here's an interesting note:
This is the important question:
He's a bit reluctant to take a strong position against the robber barons, they are, perhaps, "tolerable side-effects of successful and broad economic development." I see more costs and fewer benefits than Brad, so I wouldn't give as much ground here as he does. But this was written before the Great Recession, and I'd be curious to hear if his view of "the entrepreneurial benefits from the finance-industrial development," and the necessity of tolerating these "side-effects" has changed in light of recent events.
Posted: 20 Oct 2012 09:59 AM PDT
Just a quick reminder of what can happen "if the majority of the people do not see an improving future":
Is the Financial Sector Worth What We Pay It?, Somewhat Logically: ...Benjamin Friedman holds, in The Moral Consequences of Economic Growth, that "greater opportunity, tolerance of diversity, social mobility, commitment to fairness and dedication to democracy" derive directly from economic growth. He shows that even during stagnation–let alone recession and depression–those values can vanish easily. Brad Delong observes, in reviewing Friedman, that if the majority of the people do not see an improving future, these values are at risk even in countries where absolute material prosperity remains high. Given rising political intransigence and loss of common social purpose in the U.S., and the rise of nationalistic political sentiments in Europe, the effects of increasing stagnation and inequality are becoming more evident... All the data seem to affirm Friedman's assertion that all societal strata should participate to maximize the moral benefits of economic growth. ...The idea that the key to future stability and prosperity is to tilt the advantages even more toward the wealthy -- more tax cuts at the top and so on -- is crazy. We've had a boatload of tax cuts at the top already and the benefits have not trickled down as promised -- the benefits were anything but widely shared -- and it would be hard to describe the last few years as prosperous. As a consequence, I think we are already seeing a decline in faith that democracy as an institution that works for all of us rather than an institution that gets captured by powerful, wealthy interests. My eyes have certainly been opened the last few years.