Considering the Stimulus and the Response
Economists are by no means exclusively Keynesian (or more properly append a “neo” to be hip to that term), however our beltway denizens are almost to a man Keynesian. Climate scientists are not “settled” by any means on anthropomorphic causes for global warming but, again, politicians are. Why is this? It think the answer boils down to a logical fallacy hinging on simple psychology.
When your child has the flu the desire is to actively do something to combat the illness. After all, your kid is (gasp) sick and hurting. Some, but certainly not all, pediatricians will cater to this desire of the parent and prescribe antibiotics. Antibiotics have no effect on viral infections. But it gives the appearance of action. After all antibiotics fight diseases and your child has a disease. So, therefore there is some notion that the pill or potion is helpful. The real active palliative measures that should be taken in the case of flu is to provide rest and fluids, i.e., basically do nothing. That is a moral equivalent to “do nothing” for rest and fluids are the response taken in the case of any illness, be it bacterial (in which case antibiotics will help), or cancer, or other.
Similarly Keynesian economics offers to the government the notion that specific actions in the times of economic change are helpful. Do “X” in inflationary times, during recession provide “stimulus”. During economic expansion, act to curb growth (that one I really really don’t get). The point is these actions have two effects. They cater to two strong impulses that governments are vulnerable. The first is the above, it gives justification for action in the face of crises. It provides an explanation for why antibiotics might help the virus infected patient. The second is more pernicious. All governments for a variety of reasons find growth necessary and good. All of these actions provide reasons for larger and a more active central government. Keynesian economics thereby provides an excuse for central/federal expansion in the face of economic crises of any flavor.
The key problem in this particular crises is that the apologists for the stimulus have been unable or unwilling (or find it unnecessary) to justify the need for the stimulus itself on any grounds past, “there is a crises” or “we need to act.” An explanation for why the stimulus itself is better than any other choices of action is seen as not necessary. Within government itself, being all Keynesian for the reasons above, there is no internal debate. Commenter Boonton (at my personal blog) likes to jab the perceived (by him) intellectual deficiencies of the conservative movement. But, in a pot meet kettle way, the intellectual vacuity of the left in their defense of the stimulus is alas also evident.The problem of a loss of intellectual content in our public debates is not one isolated to the right, it is a global problem of our age.
So, if you think the stimulus is the “thing to do” right now. That the government must, today if not sooner, borrow more than it ever has in the face of any disaster or war to avert a looming crises worse than any prior one. Make your case. Link to or argue why this is necessary right now and to justify its response against the opposing ecnonomic schools and their particular solutions. The phrase “extraordinary claims require extraordinary evidence” has been used (and perhaps misused). But the borrowing requested by the state is extraordinary. Shouldn’t the case that this is necessary be extraordinarily obvious and good. So why is it that one cannot find anywhere those arguments laid out? My suggestion is that the real argument lies in the two reasons for the popularity of Keynes for politicians laid out above, which is unfortunate if true.
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