Washington Post headline this morning (print edition) is Planning a One-Two Punch with side-by-side stories on The Stimulus and The Bailout. The story on the stimulus package has the following title "Economists Agree: Speed Matters More Than Size or Shape." Really?! What about evidence on the New Deal and Japan were government spending was ineffective? How about the even more difficult problems economists have identified with crowding out of private investment by government, the risk of long term inflation due to expansionary monetary policy, and the long term public debt problems we will face from all this spending.
So my message to journalist and politicians --- Wishing it so doesn't make it so! Economists don't agree on this stimulus package, and in fact, there is plenty of scientific evidence that suggests that the very policy path we are following has not been effective in the past and across countries.
On a morning talk show today, one of the commentators made the wisest remark when he said ultimately the stimulus bill will not be determined on the basis of economics, but instead on ordinary politics. And that ladies and gentlemen is the problem.
Peter,
I'm not a credentialed economist (or any other kind for that matter), but besides the Cato ad, have Austrian and like-minded economists made a concerted effort to get a hearing with Congress or even with the President? Maybe it sounds far-fetched, but wouldn't a couple hundred economists picketing the White House attract some attention?
I never write my Congressmen, but I did this weekend regarding the "Stimulus". A drop in the bucket, perhaps. Am I naive to think that people like yourself could actually have some influence?
Posted by: James | February 08, 2009 at 02:15 PM
Is it considered impolite to ask what is evidence of the claim that "economists agree" that timing is more important than content? Did the Wash Post writers take a randomized sample of economists and ask them? Or do they mean that the majority of those they asked agreed? How did they choose those to ask? Note also that when they say that many economists want stimulus that word could mean either tax cuts or increased spending.
Posted by: Mario Rizzo | February 08, 2009 at 03:29 PM
Professor Boettke,
What do you think about the Newsweek cover from this week? "We are All Socialists Now" seen here: http://finance.yahoo.com/news/NEWSWEEK-Cover-We-Are-All-prnews-14288492.html
Posted by: Mark T. | February 08, 2009 at 04:25 PM
Mario - the WP meant it in the technical sense, "there exist two people such that they are economists and they agree with each other".
Mark - I think Newsweek was referring to their staff and/or subscriber base. Prior to this week there was still one non-socalist subscriber who had recieved the magazine in exchange for frequent flyer miles.
Posted by: lpcowboy | February 08, 2009 at 04:43 PM
Five reasons against fiscal stimulus in Australia.
http://www.theaustralian.news.com.au/story/0,25197,25025517-7583,00.html
Posted by: Rafe Champion | February 08, 2009 at 07:48 PM
Cynical commentary on the Australian rescue package.
http://blogs.news.com.au/heraldsun/andrewbolt/index.php/heraldsun/comments/package_helps_rudd_if_not_the_nation/
For these guys, the politics never stops. http://blogs.news.com.au/heraldsun/andrewbolt/index.php/heraldsun/comments/preaching_over_the_dead/
Not a happy place. http://blogs.news.com.au/heraldsun/andrewbolt/index.php/heraldsun/comments/catastrophe/
Posted by: Rafe Champion | February 08, 2009 at 08:19 PM
In the piece "we are all socialists now":
"Meacham and Thomas observe that this shift towards more government intervention in the economy began not under a Democrat but a Republican."
So history repeats itself.
"History has a sense of humor."
What was that about fools learning from their own mistakes, while wise men learn from the mistakes of others. What do you call people who don't learn from their own mistakes?
Politicians.
Posted by: Rafe Champion | February 08, 2009 at 11:01 PM
A remarkable admission by the head of the Australian Treasury - we may not be able to judge whether the package does any good.
http://thenewcurrencylad.blogspot.com/2009/02/treasury-boss-stimulus-is-essentially.html
Posted by: Rafe Champion | February 09, 2009 at 03:53 PM
Outstanding. You have succinctly and articulately made each and every point I have been trying to get across to anyone who will listen.
Posted by: Sean McCloskey | February 10, 2009 at 01:55 AM
Pete, maybe you are Austrian, but you can't be an economist, because this morning I saw Sen. Claire McCaskill (D-MO) say on tv here in Europe that "every single economist" agrees that there must be a large government stimulus. Sorry to ruin your day.
Last night Robert Reich said on CNN that the proposed package was simply not big enough.
Posted by: Mark Hatherly | February 10, 2009 at 10:02 AM