Krugman: Mitt Romney, Liquidationist
Mitt Romney, Liquidationist
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But now, after the Fed has finally moved a bit in the direction of doing something about the Lesser Depression, Mitt Romney supposedly advised by Mankiw among others is outraged:
(T)he American economy doesnt need more artificial and ineffective measures. We should be creating wealth, not printing dollars.
That word artificial caught my eye, because its the same word liquidationists used to denounce any efforts to fight the Great Depression with monetary policy. Schumpeter declared that
Any revival which is merely due to artificial stimulus leaves part of the work of depressions undone
Hayek similarly decried any recovery led by the creation of artificial demand.
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The Romney/liquidationist view only makes sense if you believe that the problem with our economy lies on the supply side that workers lack the incentive to work, or are stuck with the wrong skills, or something. And thats just not what the evidence says; instead, it points overwhelmingly to an insufficient overall level of demand.
- more -
http://krugman.blogs.nytimes.com/2012/09/15/mitt-romney-liquidationist/
Pattern: Republicans object to any attempts to help the economy.
The Jobs Program That Wasnt
Macroeconomic Advisers on the American Jobs Act, proposed a year ago:
We estimate that the American Jobs Act (AJA), if enacted, would give a significant boost to GDP and employment over the near-term.
-The various tax cuts aimed at raising workers after-tax income and encouraging hiring and investing, combined with the spending increases aimed at maintaining state & local employment and funding infrastructure modernization, would:
-Boost the level of GDP by 1.3% by the end of 2012, and by 0.2% by the end of 2013.
-Raise nonfarm establishment employment by 1.3 million by the end of 2012 and 0.8 million by the end of 2013, relative to the baseline
Of course, it that had happened, Obama would be more or less a lock for reelection. Instead, having blocked the presidents economic plans, Republicans can point to weak job growth and claim that the presidents policies have failed.
http://krugman.blogs.nytimes.com/2012/09/08/the-jobs-program-that-wasnt/
In September 2011, Republicans blocked the American Jobs Act and up to 2 million jobs
http://www.democraticunderground.com/10021294027