Notes on the Atrocities
Like a 100-watt radio station, broadcasting to the dozens...

Friday, November 07, 2003  

While I'm passing off other people's analyses, I just got this from a friend. Unlike me, he is an economist, so he does know what he's talking about. And no, don't expect that level of quality and responsibility in the future.

Because the White House is in charge, the media and the public are quick to draw cause and effect conclusions to fiscal policy and economic performance of the nation. But while fiscal policy has a lot to do with the subtle machinations of the economy, the big boom and bust cycles have a lot of
other factors as well.

So, for instance, the Democrats are far too eager to claim that Clinton "brought us" the dot com boom and that Bush is responsible for the bust. And Republicans are too eager to say the bust was a Clinton leftover and Bush is responsible for the recovery. The truth is that the dot com bubble had little to do with the nation's fiscal policy and the bursting of the bubble didn't either. Sure, you give the nation $400 checks and there is going to be a short term boost in spending that will give you a little short term growth, but the macro economy is as much about monetary policy, international economic conditions, and timing as fiscal policy.

Second, it is a losing battle to claim that what Democrats stand for will be better for the short- and medium-term economy--it won't. Making corporations pay no taxes, stripping all environmental regulations, and providing no social services will boost the economy--of course. But just because the GNP does not reflect them does not mean there are not real costs to such a policy.

Worsening environmental conditions will impose a real cost on public health and poor education and welfare will cost the country in the long run. I think the Dems are too often drawn into these losing positions about their economic policy and then pointing to short term results. Instead, they should be up front and say, yes, we are for a more just, more clean, more educated, more caring and more equitable society and we are willing to sacrifice some short term gains to achieve this in society. But in the long run the country will be more prosperous because of it.

posted by Jeff | 11:36 AM |
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