Hoisted from Paul Krugman's Archives: Insufficient Obama Economic Stimulus Department
Economic Stimulus--Through Fixing the Housing Market and Other Initiatives

Clive Crook vs. Clive Crook: Why Oh Why Can't We Have a Better Press Corps?

Clive Crook, April, 2011:

Congress could let recovery crumble: Fiscal policy, properly measured, is moving abruptly from neutral to contractionary. To make matters worse, Republicans in Congress are playing an outrageous game of brinkmanship over the budget…. [W]hatever Congress can do to undermine confidence and add to uncertainty, it is doing. Just as the private sector shows signs of reviving, Capitol Hill is threatening to drag it back down….

The housing market continues to pose the biggest danger. Most sectors of the economy expanded their payrolls in March but residential construction is still crippled. House prices have not found a floor and the foreclosure crisis goes on….

The fiscal outlook clinches the point…. The federal stimulus was mostly absorbed in offsetting the automatic tightening of fiscal policy by individual states, whose borrowing is strictly constrained. The federal stimulus was big but, in the aggregate, fiscal support for the recovery has been modest. Now the federal stimulus is running down and many states are embarking on severe and immediate spending cuts and tax increases….

In a democracy people are supposed to get the politicians they deserve. What on earth did Americans do to deserve these?

Clive Crook, February 2009:

Fiscal stimulus: repent at leisure: [I]f ever a rushed extravagant purchase was likely to induce a touch of buyer's remorse, it is this one. Republicans have a point when they complain about the inordinate length of the bill…. Republicans are right to say that not a single senator or congressman voting for it can have read it…. Not every unread piece of legislation costs taxpayers $800 billion. It isn't too much to ask that the politicians voting for this law, even if they had to make an exception, had read it first.

It will be interesting to see what is hiding in those 1,400 pages. Some disturbing early discoveries have already been reported. For instance, the bill appears to reverse or at any rate undermine the Clinton welfare reforms. It appears to ban the hiring of skilled immigrants in much of the finance industry. It appears to cap finance-industry pay much more aggressively than the Obama administration has proposed. Even if you don't think these ideas are harmful or unworkable or both, as I do, you have to admit that they deserved more of an airing than they received--which is virtually none--before they became law.

Needless to say, the Recovery Act did not ban the hiring of skilled immigrants in finance, or put aggressive caps on finance industry pay, or undermine the Clinton-era welfare reforms.