You’ve all heard the story of the Manhattan socialite who expressed shock at Nixon’s landslide 1972 victory because “nobody I know voted for him.” (Attributed variously to Pauline Kael, Katharine Graham, Susan Sontag, and others, and probably apocryphal, but who cares; it’s a great quote.) I was reminded of this by a line in Larry Summers’s confidential 2008 economic policy memo now making the rounds, courtesy of the New Yorker: “Greg Mankiw is the only economist we have consulted with [about the optimal stimulus package] who refused to name a number and was generally skeptical about stimulus.” How can a huge stimulus package be wrong — everybody I know favors it!
(For the record, the economists consulted — supposedly representing the full spectrum of legitimate opinion — were Robert Reich (recommended stimulus: $1.2 trillion over 2 years), Joe Siglitz ($1 trillion over two years), Paul Krugman ($600 billion in one year), Jamie Galbraith ($900 billion in one year), Dean Baker and colleagues ($900 billion), Marty Feldstein ($400 billion in one year), Larry Lindsey ($800 billion to $1 trillion), Ken Rogoff ($1 trillion over two years), Mark Zandi ($600 billion in one year), an unnamed group of Fed officials (over $600 billion), Adam Posen ($500-700 billion in one year), and an unnamed group at Goldman Sachs(!) ($600 billion). So, we’ve got left-wing Keynesians, right-wing Keynesians, moderate Keynesians, Robert Reich who wouldn’t know a Keynesian from a Kenyan, and Goldman Sachs. How’s that for diversity of opinion?)
[Cross-posted at Organizations and Markets]
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Good one prof.klien. I liked how you showed the wide variety of keyensians including the infamous wouldn’t know the difference between kenyan and keynesian branch of economics. XD
Paul Krugman- wrong again – no news here? What is really frightening is that he was by no means the worst – other were even more wrong. Robert Reich was twice as wrong as Paul Krugman!
I’ll bet that not one of the people on that list predicted the housing bubble. In fact, I’d bet they were all cheering on the conditions that fostered it.
Stimulus is an excellent thing. If Keynesians advocated cutting the government by 600 or so billion and giving the money back to the consumers, then I’m pretty sure their stimulus package would be wildly effective. And we’d all be happy Keynesians.
I like your thinking!
Robert Reich is often labeled an “economist” when he pontificates in the media. But I have never found any evidence that he has a degree in Economics. Does a year or two studying “Philosophy, Politics and Economics” at Oxford on a Rhodes Scholarship count as an Economics degree?
I’m not an economist, but I don’t go around claiming I am, either.
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