DeLong: The State of the Economy, Early April 2009
Council on Foreign Relations Crashed-and-Burned Watch CXIII (Great Depression Revisionism Department)

Council on Foreign Relations Crashed-and-Burned Watch CXII (Great Depression Revisionism Department)

The Council on Foreign Relations last Monday held a New Deal Conference--an event that, as one senior Bush I economic policy advisor and rock-ribbed Republican snarked, was the Council on Foreign Relations' attempt to outbid Heritage as the most biased thinktank.

Here is Ellen McGrattan, grossly misrepresenting the beliefs of CEA Chair Christina Romer:

ELLEN R. MCGRATTAN: [Obama's] current advisers are using estimates of spending multipliers of about 1.5.  So by that I mean you spend $1 on government spending and you get $1.50 in output.  So how do you do that math?  Well, you've got idle capital and idle labor, and the government being extremely efficient comes up with $1.50. Now, of course, if this were right, we'd have the government basically do everything...

Christie Romer certainly doesn't believe that if the fiscal policy multiplier is 1.5 now then "the government [should] basically do everything" in the economy. She believes that the fiscal policy multiplier is 1.5 (or larger) now when unemployment is high--and thus that the government should do more right now--but that the multiplier drops to a very small value when unemployment is low.

For McGrattan to claim that Romer believes that we should "have the government basically do everything"--well, the best you can say about McGrattan is that that demonstrates extraordinary incompetence on her part.