Hoisted from Comments: Economics as "Science"
A Note to the New Republic...

Hoisted from the Archives: February 22, 2009: The Stimulus Victory: Let's Keep in Contact with Reality Here...

Hoisted from the Archives: I call a reality check here:

  1. Paul Krugman is not a liberal economist Paul Krugman is a centrist economist. Paul Krugman drafted chapters for Reagan-era Economic Reports of the President. Throughout the 1990s, Krugman regularly directed his fire equally at both sides: blasting Democrats for believing that they could design clever policies taking account of network externalities that could do better for America than free trade; blasting Republicans for believing that tax cuts raised revenue. If there were still a bipartisan center, Paul Krugman would be its king.

  2. The stimulus program is too small. Claims that it is too small are not just attempts to set up the table so that Rahm Emmanuel can sink the eight ball in the corner pocket. Claims that are too small are descriptions of reality.

This is an important distinction to make. BHO and RE have done a wonderful job in getting this through. But unless we have a sudden run of very good luck, we are going to want to do more in six months when the reconciliation bill moves through--in fact, we want to do more right now if we can.

Matthew Yglesias says:

Matthew Yglesias: Rahm Emanuel Suggests He Agrees Stimulus Package Wasn’t Big Enough: Here’s an intriguing swathe of Ryan Lizza’s profile of Rahm Emanuel:

“They have never worked the legislative process,” Emanuel said of critics like the Times columnist Paul Krugman, who argued that Obama’s concessions to Senate Republicans—in particular, the tax cuts, which will do little to stimulate the economy—produced a package that wasn’t large enough to respond to the magnitude of the recession. “How many bills has he passed?” […] “Now, my view is that Krugman as an economist is not wrong. But in the art of the possible, of the deal, he is wrong. He couldn’t get his legislation.”

Whether or not you think Emanuel is right about the legislative politics, it seems to significant for the White House Chief of Staff to concede that Krugman is correct about the economics and the legislation President Obama signed into law may, in virtue of its concessions to conservatives, be too small to rescue the economy.

I also always find this particular form of ping-pong to be a bit odd:

  1. Practical Politician A offers Proposal X.
  2. Outside Commenter B says that X is too moderate on the merits.
  3. Practical Politician A angrily retorts that better legislation on the merits would have been impossible to secure.

I think the right way to understand the (1)/(2) dynamic here is that the criticism in step (2) makes it easier to secure the passage of legislation. If you propose something, and every single progressive in all the land immediately lauds it as the greatest bill ever written, then your legislation is now an extreme left proposal and it’s doomed. If you’re going to make concessions to political reality then you need to weather a bit of criticism from your left—that’s what establishes the proposal as moderate and sensible. Things like “some liberal economists such as Paul Krugman say the proposal is too small” is a helpful piece of context-setting that prevents the proposal from appearing too radical.