Economics and Our National Memory
As the mainstream press has cheered Obamanomics these last couple of years, I’ve kept feeling puzzled—no, intensely exasperated—over the apparent willingness to engage in national amnesia. We’ve been through this before, I keep thinking. We already know Keynesian economics doesn’t work. The Nixon and Carter years proved it. We already know that cutting taxes, rolling back spending, and a steady, predictable monetary policy do work. The Reagan years proved it.
Lately I’ve come to the conclusion that the problem hasn’t been amnesia. Not exactly. Most reporters are too young to recall the Reagan years—as are, come to think of it, most members of the White House staff. What it is, really, is straightforward ignorance. The folks in question just don’t know the country’s own recent history.
Which brings me to the long, important article in today’s Wall Street Journal, “Principles for Economic Revival.” The economists who co-authored the article: George Shultz, who served in both the Nixon and Reagan administrations; John Cogan, who served in the Reagan administration; Allan Meltzer, who served on the Council of Economic Advisors for both presidents Kennedy and Reagan, and who is the author of A History of the Federal Reserve; Michael Boskin, who served as Chairman of the Council of Economic Advisors under President George H. W. Bush; and John Taylor, a scholar of monetary theory and practice who served as undersecretary of the Treasury under President George W. Bush (and who posts from time to time here on Ricochet).
America’s finanical crisis, deep recession and anemic recovery have largely been driven by economic policies that have deviated from proven fact-based principles. To return to prosperity we must get back to these principles…
[T]ake tax increases off the table...[B]alance the federal budget by reducing spending…[M]odify Social Security and health-care entitlements to reduce their explosive future growth.
In presenting an economic agenda for Republicans to pursue after the election, “Principles for Economic Revival” also reasserts our national memory. It’s an article by grownups.
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Comments :
Sep '10
Re: Economics and Our National Memory
Peter why would you expect a left of center press to value empricism in regards to economics when they don't on most other major issues? Whether its spending on defense, criminal sentencing, or a host of other issues they promote the same bad ideas in perpituity.
Jul '10
Re: Economics and Our National Memory
Peter, I, too put it down to utter economic ignorance.
That is why, when people ask me which books to read in order to understand conservatism, first on my list is always "Free to Choose".
Jun '10
Re: Economics and Our National Memory
Keynesian economics is incredibly effective, if your goal is to make government bigger and more powerful. That's everyone's goal...isn't it? :)
Jul '10
Re: Economics and Our National Memory
It may be an article by grownups, but can the elite (especially the Republican elite) understand it?
Jul '10
Re: Economics and Our National Memory
It's surprising how economically illiterate the media and most politicians are. When I got my degree in Economics 15 years ago, they were using the failed Keynesian policies of the 70s as case studies of what not to do. Unless it's no longer being taught, they're just ignorant (maybe willfully so).
Sep '10
Re: Economics and Our National Memory
Peter Robinson: We already know Keynesian economics doesn’t work.
Work for who? Certainly chalk up the media response to "stimulus" as born of ignorance. But for those in power it "works" as a convenient ruse for grabbing ever more power. I doubt Pelosi has given a second thought as to whether that disgrace of a bill was sound economic policy. She got her slush fund, they all did.
Then there's Krugman. Anyone care to explain that one?
May '10
Re: Economics and Our National Memory
Check out All Things Considered. They are beginning a series with their Planet Money team explaining various economic philosophies.
They started today with socialism. As they explained, today's socialism is not your grandfather's socialism. It's misunderstood by the young people who think it's bad but don't really understand how it works.
Today socialists believe you can own lots of stuff! Your house, your car, even a small business for example! But the means of production should be controlled by the workers. Not by the state though -- it's job is to supply the healthcare.
The capstone was the condescending explanation of how this was a perfectly respectable 'economic and political philosophy in Europe:
Right now, the governments of Spain, Portugal, Greece, are headed by socialists. In the recent past, the UK, France, Canada have all been led by socialists. Most countries have an active socialist party; socialism is just one more mainstream way of thinking — on talk shows, on political debates, in the papers.
I wanted to weep.
http://www.npr.org/blogs/money/2010/09/16/129914195/is-the-u-s-moving-toward-socialism-a-socialist-weighs-in
Jul '10
Re: Economics and Our National Memory
Careful, Trace. Ricochet is in the process of purging members.
Admitting to listening to NPR, well....
Aug '10
Re: Economics and Our National Memory
Kenneth:
That is why, when people ask me which books to read in order to understand conservatism, first on my list is always "Free to Choose".
What's topped my recommendation list so far are "Capitalism and Freedom" and "Knowledge and Decisions". My left-leaning friends tend to be suspicious of "Free to Choose" because it's so accessible. Weird, eh? But if something's too accessible, they worry they're having a fast one pulled on them.
This reminds my of my left-leaning floppy hat friend. She's confessed to my husband and me, "I get afraid to engage you in discussions because you always manage to convince me that something that just shouldn't be true is perfectly logical. I hate it!"
It seems many left-leaners are suspicious of things making too much sense. I almost sympathize with this (sometimes explanations are too pat, too glib). Almost.
May '10
Re: Economics and Our National Memory
Put a Post-it note on the mirror, Peter: "Human beings are not only logical, and logic isn't always in charge." There's not a single aspect of life where that truth doesn't come into play. Never consider people as mere calculators... especially not in politics.
But I agree with etoiledunord. The reasons regular citizens believe in failed economic strategies are not why Democrats are employing those strategies.