Budget-Arsonists-Wearing-Firechief-Hats Watch: Greg Mankiw vs. Greg Mankiw
Why oh why can't we have a better press corps?
Let the record show that when Greg Mankiw was chair of the President's Council of Economic Advisers he worked for a president, George W. Bush, who took less than zero regard for the long-term fiscal stability of the United States. And let the record show that Mankiw did not put his or his staff's credibility on the line in an attempt to reverse either of the five big budget-busting decisions--the 2001 abandonment of congressional PAYGO, the 2003 shift of taxes from the present into the future, the 2003 decision not to raise taxes to pay for any portion of the war in Iraq, and the 2003 decision not to find a revenue source to cover any part of the expense of Medicare Part D--of the George W. Bush administration.
Greg Mankiw, 2004, as observed by Noam Scheiber--working for
Out of Depth: [Y]ou can practically see the dissonance spelled out on Mankiw's face. He appears to wince when he gets a question from the generally anodyne NABE crowd about the administration's dubious promise to cut the deficit in half in five years.... [He explains] that the administration plans to achieve its goal through a mixture of spending restraint and entitlement reform. He cites the recent Medicare reform bill as an example:
The easy thing to do would have been to take the existing system and add a prescription-drug benefit on top of it.
But, instead, he continues--utterly unconvincingly--the president demanded changes that will save real money over the long term. (This, describing a bill recently estimated to cost $534 billion over ten years.) "So there's--there's a fundamental rethinking" going on, he concludes...
And let the record show that there have been four big moves on the long-term budget in the past year: (1) the inclusion in the Affordable Care Act of the IPAB to slow the growth rate of Medicare spending (good for long-run fiscal stability, and which the Republicans have sworn to repeal), (2) the inclusion in the Affordable Care Act of the tax on high-cost health plans (good for fiscal stability, and which the Republicans have sworn to repeal), (3) the late 2010 Obama-McConnell deal on extending the shift of taxes from the present to the future (bad for fiscal stability, which the Republicans supported), and (4) the abandonment of PAYGO by the Republican House majority (bad for fiscal stability). Let the record show that Greg Mankiw has not endorsed (1) or (2), and has not lamented (3) or (4).
But he does put on his firechief hat and lecture Obama about how concerned conservative economists like him are with long term fiscal stability. Greg Mankiw, 2011:
How Obama Can Work With Republicans: In a matter of days, Republicans will control the House of Representatives and have a larger voting bloc in the Senate. If economic policy is to make any progress over the next two years, you really will have to be bipartisan. To do so, you’ll need to get inside the heads of the opposition. I am here to help. As a sometime adviser to Republicans, I’d like to offer a few guidelines to understanding their approach to economic policy. Follow these rules of thumb and your job will be a lot easier.
FOCUS ON THE LONG RUN Charles L. Schultze, chief economist for former President Jimmy Carter, once proposed a simple test for telling a conservative economist from a liberal one. Ask each to fill in the blanks in this sentence with the words “long” and “short”: “Take care of the _ run and the _ run will take care of itself.” Liberals, Mr. Schultze suggested, tend to worry most about short-run policy. And, indeed, starting with the stimulus package in early 2009, your economic policy has focused on the short-run problem of promoting recovery from the financial crisis and economic downturn.
But now it is time to pivot and address the long-term fiscal problem. In last year’s proposed budget, you projected a rising debt-to-G.D.P. ratio for as far as the eye can see. That is not sustainable. Conservatives believe that if the nation credibly addresses this long-term problem, such a change will bolster confidence and have positive short-run effects as well...
