Liveblogging World War II: August 5, 1942
And Ezra Klein Takes Mitt Romney--and His Validating Economic Advisors Hassett, Hubbard, Mankiw, and Taylor--to School...

Matthew O'Brien Schools Republican Economist Glenn Hubbard...

My view is that Glenn Hubbard is quite a bit too eager to be Treasury Secretary someday. But I really don't think this is the way to do it…

Matthew O'Brien:

Mitt Romney's Economic Adviser Isn't Giving Very Good Advice: Romney economic adviser Glenn Hubbard apparently has a very short memory…. "We are currently in the most anemic economic recovery in the memory of most Americans." Does the memory of most Americans go back a decade? If it does, then they can remember a more anemic recovery…. The post-2001 recovery had the slowest job growth of any postwar recovery. It also had the slowest private sector growth of any postwar recovery. It's puzzling that Hubbard doesn't remember this, considering that he was the chair of President George W. Bush's Council of Economic Advisors from 2001 to 2003….

[W]e're in a deeper hole this time around. All else equal, we would expect a better recovery from a worse recession, but all else is not equal. As Harvard professor Kenneth Rogoff has shown with over 800 years of data, recoveries from financial crises are long, slow slogs. It's doubtful that recycling Bush-era policies will get us out of this ditch faster. It didn't ten years ago.

[U]ncertainty over policy--particularly over tax and regulatory policy--slowed the recovery and limited job creation. One recent study by Scott Baker and Nicholas Bloom of Stanford University and Steven Davis of the University of Chicago found that this uncertainty reduced GDP by 1.4% in 2011 alone.

Well, that certainly sounds bad. When did all of this uncertainty peak? Let's look at the paper. August of 2011. Hmmm. What happened in August of 2011? Oh, that's right. The debt ceiling debacle. Why don't we let the authors speak for themselves. Here's why they said uncertainty was so elevated in 2011:

A series of later developments and policy fights - including the debt- ceiling dispute between Republicans and Democrats in the summer of 2011, and ongoing banking and sovereign debt crises in the Eurozone area - kept economic policy uncertainty at very high levels throughout 2011.

In other words, a debt crisis the Republicans manufactured and a debt crisis the Europeans manufactured drove uncertainty in 2011. Granted, tax uncertainty has been bad -- but so has monetary policy uncertainty. And have you noticed what we haven't talked about yet? The authors conclude that healthcare and financial regulation uncertainty were "much less pronounced" than all of the above questions….

Hubbard says that 1) Medium-run deficits are bad for medium-run growth, 2) Romney will cut public spending, which will increase private spending, and 3) Romney will lower tax rates and eliminate tax loopholes while keeping tax revenues the same. Individually, these might make sense. Together, they're the economic equivalent of saying two plus two equals five…. Expansionary austerity is a myth, at least in the short-term. That was the conclusion the IMF reached….

And then Matt says:

I don't mean to pick on Glenn Hubbard. He has plenty of good ideas about how to get the economy moving again -- like mass refinancing for mortgages owned by Fannie and Freddie. But repackaging the Bush agenda, just updated with austerity, is not the path to prosperity.

Well, Matt may not mean to pick on Glenn Hubbard. But I do. For my entire adult life Democratic politicians have proposed much sounder technocratic economic policies than Republican politician have. One reason for this is that Democratic policy advisors with academic street cred have used that cred to corral politicians, and Democratic politicians wanting to be validated by well-credentialed economists have listened. By contrast, Republican well-credentialed economists have been--well, they have been willing to validate pretty much anything.

I don't like it. I don't have to say that I like it.