Juliet Lapidos: "It seems like every week brings new evidence of what Keynesians have long known: Austerity is counterproductive in times of recession"
Liveblogging World War II: October 31, 1942

Glenn Hubbard Fails to Sell Mitt Romney's Economic Policies

Instead, he makes the intelligent and skeptical John Cassidy fearful:

Romney's "Recovery Plan" Could Bring On Another Recession: Columbia economist Glenn Hubbard, who is one of Mitt Romney’s top economic advisers, has an op-ed piece entitled “The Romney Plan for Economic Recovery.” When I saw the headline, I felt a rush of anticipation: at last, I thought, here is the big new jobs initiative that the G.O.P. campaign is relying on to turn things in its favor.

I was mistaken. The first two thirds of Hubbard’s piece is... an attack on... Obama.... When Hubbard eventually gets to laying out Romney’s alternative, there is nothing new either... a vague promise to cut federal spending and reduce the budget deficit, an even vaguer plan to cut taxes but in a “revenue-neutral fashion,” and a commitment to repeal Obamacare and Dodd-Frank.... [T]he G.O.P. campaign still doesn’t have a recovery program....

If this really is all there is to Romney’s economic platform, it amounts to a modest fiscal contraction accompanied by tax and regulatory changes designed to improve the economy’s long-term growth potential [ed: should be enrich Republican campaign contributors].... I would suggest that the tax changes... won’t make much difference to how the economy performs, and that softening regulation would be positively harmful.... But the issue here isn’t the economy’s long-term growth potential. It is how to gee it up now and prevent a lost five years from turning into a lost decade. None of the policies that Hubbard mentions involve direct measures to boost demand....

One possibility is that Romney isn’t really serious.... Another possibility is that Romney is hoping that his fellow Republican Ben Bernanke will bail him out.... But with short-term interest rates already approaching zero, the Federal Reserve is almost out of ammo.... A final possibility is that Romney isn’t serious about making his tax cuts revenue-neutral....

Far from putting forward a “recovery plan,” Romney remains tied to a grab bag of proposals that won’t do anything to promote spending and job creation if they are fully enacted, and which could well tip the economy into another outright slump.