Tuesday, January 27, 2009

Barack blogs! [update 3: The stimulus edition]

President Franklin Roosevelt used his “fireside chats” to sell his perfidy to the American public.  President Obama is using a new blog – and according to reports “the blogosphere is abuzz” about it.  Do the powers of the Obamessiah never end?  He heals the sick; he heals the planet; he stops the waters rising; he meets the media … and now in his spare time, he blogs! Phew.  Even his namesake rested on the seventh day.

But if you think that’s Barack on the blog and not just a panoply of press releases, then you probably also think he’s going to “lead” the US out of recession – in which case, I have a stimulus package right here that I see you’re already buying.

UPDATE 1:  Speaking of stimulus packages, it seems Obama's economic advisers have been reading The Onion, which has several "ideas" for stimulus packages to reignite the US's bubble economy...

"What America needs right now is not more talk and long-term strategy, but a concrete way to create more imaginary wealth in the very immediate future," said Thomas Jenkins, CFO of the Boston-area Jenkins Financial Group, a bubble-based investment firm. "We are in a crisis, and that crisis demands an unviable short-term solution."
    ...According to investment experts, now that the option of making millions of dollars in a short time with imaginary profits from bad real-estate deals has disappeared, the need for another spontaneous make-believe source of wealth has never been more urgent.
    "Perhaps the new bubble could have something to do with watching movies on cell phones," said investment banker Greg Carlisle of the New York firm Carlisle, Shaloe & Graves. "Or, say, medicine, or shipping. Or clouds. The manner of bubble isn't important—just as long as it creates a hugely overvalued market based on nothing more than whimsical fantasy and saddled with the potential for a long-term accrual of debts that will never be paid back, thereby unleashing a ripple effect that will take nearly a decade to correct."
    ... "The U.S. economy cannot survive on sound investments alone," Carlisle added.

Have the advisers been reading The Onion, or has The Onion just been reading Keynes?

UPDATE 2: Robert Barro and Robert Lucas might come from the same school of economics, but it looks at present like they're firing at different targets, and getting shot for it -- one deservedly, one not so.

Robert Murphy gives Lucas a well-earned going over for his strange faith in Ben Bernanke -- specifically Bernanke's flawed notion that too much paper isn't enough.

Meanwhile, Tyler Cowen takes on those who are dumping on Robert Barro for pointing out that any expectation of a positive multiple from government stimulus packages is wholly mistaken, and points out in passing that uber-Keynesian Paul Krugman appears to have finally admitted that WWII is not a good example of the success of Keynesian deficit spending.

UPDATE 3: In recent weeks Greg Mankiw [hat tip Anti Dismal] has documented many  skeptics about the efficacy of a spending stimulus,
a list that includes quite a few well-known economists, such as (in alphabetical order)Alberto AlesinaRobert BarroGary BeckerJohn Cochrane,Eugene FamaRobert LucasGreg MankiwKevin MurphyThomas SargentHarald Uhlig, and Luigi Zingales--and I am sure there many others as well. [Follow the links to see Mankiw's evidence.]
    Regardless of whether one agrees with them on the merits of the case, it is hard to dispute that this list is pretty impressive, as judged by the 
standard objective criteria by which economists evaluate one another. If any university managed to hire all of them, it would immediately have a top ranked economics department.

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1 Comments:

Blogger Mark Hubbard said...

Great post, Peter, but best of all you've alerted me to the fact that Anti-Dismal is back ;)

Excellent.

1/27/2009 10:13:00 pm  

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