Why the left supported stimulus

Bryan Caplan makes the point.

I suspect that top-tier liberal economists favored fiscal stimulus because they saw a golden opportunity to push big government, not because they saw a technical problem with monetary policy. Uncharitable I know, but I see no other way to explain their sudden change of heart.

Not uncharitable at all – that’s the nature of the beast.

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9 Responses to Why the left supported stimulus

  1. TerjeP says:

    Monetary policy should be focused on price stability. It should not be used for “stimulus”.

    Fiscal policy should be used to pay for essential government services. There is a valid debate about which bits are valid. The only worth fiscal stimulus is a tax cut.

    If you want a stronger economy the correct response is microeconomic reform.

    When recessions happen the best that governments can do is to protect the truely vulnerable and use the opportunity to free up the economy ready for recovery. There isn’t a simple macro lever marked “more economic growth”.

  2. TerjeP says:

    “There is a valid debate about which bits are valid”

    Should read:-

    “There is a valid debate about which bits are essential”.

  3. Peter Patton says:

    Sinc

    Yet another moment in the class warfare being waged by the non-mercantile upper middle class against the current hegemony of the mercantile bourgeoise.

  4. daddy dave says:

    If you want a stronger economy the correct response is microeconomic reform.

    Why is this point so hard for people to understand? The Keynesian stimulus solution for a stronger economy is to print lots of money, throw it in the air, and cry, “We’re all rich!”

  5. THR says:

    Yet another moment in the class warfare being waged by the non-mercantile upper middle class against the current hegemony of the mercantile bourgeoise.

    Yes, those ‘non-mercantile’ retailers who were applauding the stimulus have a lot to answer for.

  6. Keith says:

    It’s not a left/right thing. Nor is it a ideology thing, or an economic theory thing. It was all about an appeal to vanity (Henry’s and Rudd’s in particular) and the all too apparent scare put into Rudd and Swan during one of their G20 jaunts in 2008. There was a memorable joint interview with them where the complexions looked a little paler than usual and the whites of the eyes a little more prominent. Once they started to stimulate, pride and vanity ensured that no contrary evidence, or speculation as to the size or duration of the stimulus, would be entertained.
    The main-chancers in the economics profession will always take an opportunity however.
    Rudd’s truly wondrous fictional history of the economy published in The Monthly ensured that the main-chancers knew in advance which buttons to push.

  7. Peter Patton says:

    I’d still like to know who wrote Rudd’s Monthly articles.

  8. Rafe says:

    Especially the ones about Hayek and the dreaded neoliberalism. What a goose!

  9. Peter Patton says:

    Well whoever wrote them played a little joke on Kevvie, by not reminding exactly the source of his being – briefly – the richest Prime Minister in Australia’s history. 😉

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