1. Kate was at Russian class last night so I went over to my parents' for dinner cause I'm a good son like that. My dad asked me "have you ever heard of an economist name Boudreaux from one of the schools around here?". Of course I told him yes - I'm quite familiar with Don Boudreaux! He had apparently heard him on the radio that day talking about Obama's jobs speech and what he thinks is the real problem. Don blogged on that yesterday too, and went more on the attack than he apparently did on the radio. The problem with Don's argument is that it's riddled with this fallacy that Keynesianism is consumptionism. He points to steady PCE expenditures as evidence against Keynesianism, says that low investment is the problem, and then whips out regime uncertainty to explain that. In the comments, I clarify that Keynesianism is primarily an explanation of low investment, that drops in consumption do occur as a result of the multiplier, but that he's not refuting Keynesianism by pointing to investment that is considerably worse than PCE: that's what Keynesians suggest too.
2. I've heard a lot of people call the proposals Obama's putting forward "more of the same". That seems odd to me. It's $447 billion rather than $787 billion, and he talked about debt reduction and "paying for" this new stimulus (which in Washington-speak means not financing it with deficits), so it seems to me by any reasonable measure this is doing "less of the same" rather than "more of the same". I also don't understand why doing "more of the same" is always treated like such an insult. I recently got a crown, and during the first couple days while I had the temporary crown my tooth hurt like hell. So I took an extra strength Tylenol. It didn't entirely work for the pain. Did I say "well I'm not taking any more Tylenol - that would just be doing more of the same"? No! I did double the same - I took two extra strength Tylenol, and lo and behold - my tooth felt a lot better! I just think it's so strange how people talk about the stimulus sometimes. And people who should know better - people who should understand counter-factuals - point to the Romer-Bernstein forecast and then just declare that it didn't work. If you have that poor a grasp of what claims you can and can't make from the evidence, you shouldn't be an economist. The other option, of course, is that they do understand counterfactuals but they are making these bad arguments anyway to sway people who don't understand counterfactuals. That would be unethical and even worse.
2 hours ago