Notes on the Atrocities
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Friday, April 09, 2004  

Krugman discusses the March job numbers. He's not impressed:

Of course, we can hope that the March numbers are just the beginning of a torrent of good news. But the straws in the wind aren't wildly encouraging. Weekly first claims for unemployment insurance are down -- but they're still above the 2000 average, and job growth in 2000 barely kept up with population. Average weekly hours, sometimes a clue to future hiring, fell in March -- in fact, they fell so much that total hours worked declined even as the work force increased.

But what I found most interesting was this tidbit, about the likely direction of Kerry's policy:

Leaving the details for another day, it's pretty clear what John Kerry's economic philosophy will be. He's surrounding himself with advisers closely tied to Bill Clinton, and even more closely tied to Robert Rubin, the legendary former Treasury secretary. In office, we can surmise, Mr. Kerry would follow a Rubinesque strategy of bringing long-term budget deficits under control through a mixture of tax increases for upper-income families and spending restraint. No doubt he would move slowly on deficit reduction as long as the economy remained weak, but his advisers would tell him, as Mr. Rubin told Mr. Clinton, that responsible long-run budget policies are good in the short run, too, because they help keep interest rates low.

I wonder if this is such a good idea. Clinton's policies worked because beginning in the mid-90s the US enjoyed a tech boom. The success of Clinton's austerity measures were amply aided by increasing revenues. But the Bush policies Clinton inherited were far more responsible than the Bush policies Kerry will inherit (optimism intended), and there's no evidence the US is poised to ride a new boom. Is recycling Clinton's fiscal policy really so wise?

posted by Jeff | 7:16 AM |
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