And even in early 2009 it was probably just a "lean against the wind" mentality.
Read this passage shared by Brad DeLong. It's not clear exactly, but from context it seems like this happened in the spring of 2009 (because the stimulus seems to have passed). Obama is arguing to his staff that there is not a demand problem, that the problem is high productivity. In other words, in this April 2010 post by Arnold Kling where Kling also responds to Romer's concerns about demand President Obama would have sided with Arnold Kling against Christina Romer. For a lot of reasons, I think Obama is still the best of a lot of bad options, but he's increasingly looking no worse than - say - Mitt Romney. I don't know if Hillary Clinton would have fallen into this trap or not.
This is really depressing. And yet in the blogosphere we're dealing with this notion that Obama is some kind of uber-Keynesian.
If I were Romer I would have resigned and had a big press conference laying all this out and spelling out precisely what the country needed. The president shouldn't have advisors if he doesn't want to be advised.
Tuesday, September 20, 2011
Subscribe to:
Post Comments (Atom)
Posts
Hi Daniel, ist it somehow possible to send a personal message to you without using the comments on this blog? I cannot find an email address or something.
ReplyDeleteIf one were more cynical, one could make the argument that Obama is if anything, a corporatist in economics and politics. One could also make the argument he's under the influence of unrepetant (sp?) University of Chicago professors of economics (and other economists agreeing with such unapologetic market fundamentalists) who still cling onto rational expectations and the efficient markets hypothesis.
ReplyDeletehttp://www.amazon.com/Bought-Paid-Unholy-Alliance-Between/dp/1595230718.
I personally don't buy into those views, but believe instead that Obama's simply too stuck on his notion of being a "uniter" and figure of reconciliation to realise when he needs to push back forcefully enough.
In my counter-factual, he would have hired a mix of the Clinton-era figures (like Larry Summers), BUT force them to team up with Robert Shiller, Nouriel Roubini, Joseph Stiglitz, Nassim Nicholas Taleb, and Paul Krugman. A team of rivals, essentially.
Not a Keynesian, perhaps, but a *Kenyan*!
ReplyDeleteAnonymous - dan.p.kuehn@gmail.com
ReplyDeleteBlue Aurora - I've never quite understood that argument. He doesn't want businesses to fail, and he's intervened to a certain extent to prevent that. But it seems well below the mark of what we usually think of when we think of a "corporatist". I think RE and EMH is giving him too much credit too. EMH doesn't have too much to do with his macro assertions here and even guys like Summers and Romer who disagree with him think RE can be reasonable (I do too). I think the answer is a lot less complicated and a lot less salacious: he's a run of the mill left of center politician that is willing to entertain "lean against the wind" arguments, but has no theoretical structure behind that inclniation, and very quickly falls back on cliches about belt tightening, budget balancing, taxing the rich, etc.
Gene - :) at least half!
Daniel,
ReplyDeletePoliticians are mostly the purveyors of the ideas of others at third hand, which generally means that they do not have the sort of commitments to them the way academics do. Obama also knows which way the political winds are blowing, and they are not blowing towards spending more federal money (particularly since there never has been any convincing narrative about how that is supposed to work in the first place - if the American populace was ever persuaded by such, that ended some time ago).
"For a lot of reasons, I think Obama is still the best of a lot of bad options..."
From a "reign in the power of the Presidency" and "a reign in the power of the national security state" perspective Obama has merely echoed and extended what we've seen out of Presidents since Truman. I'd take lots of Keynesian stimulus if the Obama administration had actually cranked some of that back from eleven - instead it has stayed at eleven or even gone to twelve.
"If I were Romer I would have resigned and had a big press conference laying all this out and spelling out precisely what the country needed."
Unless you have a "Pentagon Papers" type revelation or you're willing to spend months over even years banging the drum as far as your opinion is concerned (and you're a good, charismatic speaker too) those sort of press conferences just get swallowed by the noise, the news cycle and the general churn of information out their in society.
But hey, at least the Obama administration got rid of "Don't Ask, Don't Tell" - killing that stupid policy took what, eighteen to nineteen years? My only wish is that Randy Shilts was around to see it.
Blue Aurora,
ReplyDeleteObama is a weak President (he isn't the first mind you). There are multi-layered reasons for that, many of which have to do with events out of his control. Still, while you cannot control "fate," you can do things to insulate yourself against it and use it to your advantage.
Daniel,
ReplyDeleteOT: I'm becoming interested in the English Historical School - got any reading suggestions?
James Pethokoukis is tweeting sections from the book:
ReplyDeletehttp://twitter.com/#!/JimPethokoukis
The last president who implemented Keynesian policies on a large scale that resulted in significant falls in umemployment was Reagan (after 1982).
ReplyDeletehttp://socialdemocracy21stcentury.blogspot.com/2011/09/reaganomics-as-keynesianism.html
What a depressing thought.
Sumner's latest two post absolutely depressed me, especially this one.
ReplyDeletehttp://www.themoneyillusion.com/?p=10910#comments
I'm also thinking of voting Mitt Romney now because at least he has Greg Mankiw with him. Although Mitt Romney's recent anti-fed rhetoric has put me off a bit, I think it's just an act. He'll appoint some doves to the FOMC anyway (using Mankiw's advice) and lower taxes. Then he'll be sure to have the tax cuts take all the credit for the recovery.
"Blue Aurora - I think the answer is...a lot less salacious: he's a run of the mill left of center politician that is willing to entertain "lean against the wind" arguments, but has no theoretical structure behind that inclniation, and very quickly falls back on cliches about belt tightening, budget balancing, taxing the rich, etc."
ReplyDeleteIn other words, we agree somewhat. As for the rational expectations part, while I haven't studied economics at the level of a Master's degree just yet, I believe that it works, but only as a limited case. The non-linear dynamics of decision-making (see the Ellsberg paradox) prove otherwise.