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Thread: Why Does the GOP OPPOse Stimulus?

  1. #1
    Havakasha is offline
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    Why Does the GOP OPPOse Stimulus?

    http://www.washingtonpost.com/busine...y.html?hpid=z2
    By Ezra Klein, Monday, September 5, 7:33 PM

    Want to know why President Obama is going to have such a hard time persuading Republicans to support his jobs proposals this week? Don’t ask a pundit, or a politician, or a pollster. Ask a psychologist.

    It has become common today for Republicans to deride the very concept of stimulus as absurd, to mock Keynesian economics as an ivory-tower fantasy, and to oppose temporary tax cuts as a recession-fighting measure. But during theBush administration? All that was orthodox conservative policy

    In 2001, Grover Norquist called a national sales-tax holiday “exactly the kind of immediate stimulus our shell-shocked economy needs now.” Norquist went on to quote George W. Bush’s chief economist, Glenn Hubbard, saying we needed stimulus “sooner rather than later.” Sen. Olympia Snowe (R-Maine) introduced a bill to that effect.

    Around the same time, Rep. Paul Ryan (R-Wis.) held a hearing in which he invited Kevin Hassett, a conservative economist based at the American Enterprise Institute, to make the case for a fiscal stimulus. “The economists who studied this were quite surprised to find that fiscal policy in recessions was reasonably effective,” Hassett testified. “It is just that folks tried a first punch that was too light and that generally we didn’t get big measures until well into the recession.”

    Ryan was delighted by his answer. “That is precisely my point,” he replied. “That is why I like my porridge hot. I think we ought to have this income tax cut fast, deeper, retroactive to January 1st, to make sure we get a good punch into the economy, juice the economy to make sure that we can avoid a hard landing.”

    So not only was it non-controversial that deficit-financed stimulus spending was an effective and desirable way to fight economic downturns, but it was taken as obvious by Paul Ryan — Paul Ryan! — that the big danger was that you did too little. Now, of course, Ryan takes the initial stimulus’s inability to fully combat the recession as evidence of the policy’s failure, even though we now know the recession was deep enough that standard calculations — the sort of calculations Hassett was referring to in his testimony — would have argued for a stimulus of more than $2 trillion.

    So what happened?

    Some say the explanation for all this is obvious: Republicans want the economy to fail because that is how they will defeat President Obama. After all, didn’t Sen. Mitch McConnell say, “The single most important thing we want to achieve is for President Obama to be a one-term president”? How much clearer can it be?

    I don’t believe this sort of behavior is quite that cynical. Psychologists and political scientists talk often of a phenomenon known as motivated skepticism. The idea, basically, is that we believe the evidence and arguments we want to believe, and reject ideas and information that undercut our preferences.

    My favorite study in this space was by Yale’s Geoffrey Cohen. He had a control group of liberals and conservatives look at a generous welfare reform proposal and a harsh welfare reform proposal. As expected, liberals preferred the generous plan and conservatives favored the more stringent option. Then he had another group of liberals and conservatives look at the same plans, but this time, the plans were associated with parties.

    Both liberals and conservatives followed their parties, even when their parties disagreed with their preferences. So when Democrats were said to favor the stringent welfare reform, for example, liberals went right along. Three scary sentences from the piece: “When reference group information was available, participants gave no weight to objective policy content, and instead assumed the position of their group as their own. This effect was as strong among people who were knowledgeable about welfare as it was among people who were not. Finally, participants persisted in the belief that they had formed their attitude autonomously even in the two group information conditions where they had not.”

    I tend to think there’s much more motivated skepticism in politics than outright cynicism, much less economic sabotage. But it’s a distinction without a difference, at least so far as policy outcomes go. The bottom line is this: Until quite recently, both parties supported the idea that you combat bad economies with stimulus spending. Now, during an extremely bad economy, the Republican Party has completely abandoned that position. That has left them without plausible solutions — the GOP talks now of things that have very little role in boosting short-term demand, such as deficit reduction and regulatory reform — and has left the Democrats without the votes to pass anything. And that’s left the country deep in the hole.
    Last edited by Havakasha; 09-06-2011 at 12:49 AM.

  2. #2
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    This remains very pertinent now that it seems that the Republicans will likely try to block
    much of President Obama's Job bill.

    Ezra Klein:

    "I tend to think there’s much more motivated skepticism in politics than outright cynicism, much less economic sabotage. But it’s a distinction without a difference, at least so far as policy outcomes go. The bottom line is this: Until quite recently, both parties supported the idea that you combat bad economies with stimulus spending. Now, during an extremely bad economy, the Republican Party has completely abandoned that position. That has left them without plausible solutions — the GOP talks now of things that have very little role in boosting short-term demand, such as deficit reduction and regulatory reform — and has left the Democrats without the votes to pass anything. And that’s left the country deep in the hole."
    Last edited by Havakasha; 09-13-2011 at 07:13 PM.

  3. #3
    Havakasha is offline
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    I thought S&L might have an answer to the question. lol

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    SiriuslyLong is offline
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    Boy howdy do I have answers.

    Let's rebuild the entire navel fleet! The demand for steel, electronics, skilled tradesman would soar. The assets created would the pride of every American. I mean think about it. How many industries would get "touched" - food service, waste disposal, water purification, electronics, health......?

    Here's a recycled idea you probably dismissed in the past. Let's build 1000 state of the art federal health centers that private sector practices can lease from the government with terms. Again, how many industries would get touched? And to keep things cool, Obama can have GE Healthcare supply all the MRI's and CAT scan machines (you know, keep it in the "family"). An oversupply of diagnostic equipment and health care availabiltiy should bring prices down, no? And of course, we need individuals to run these things and staff these centers. With an aging population....................

    I'd support taxing the rich if we would make something of it (as in "assets" and productive assets are better yet - as described).

  5. #5
    Havakasha is offline
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    Here is a quote from The Economist. DID YOU EVER HEAR OF IT? Let me give you a hint S&L. Its not a Socialist publication. Lol.
    Let me suggest you get a subscription.

    "THE IMMEDIATE PRIORITY SHOULD BE SUPPORTING DEMAND--OR AT LEAST NOT DOING HARM TO IT. THE LEFT IS RIGHT ON ONE THING: THE MAIN CAUSE OF OF THE CURRENT HIGH JOBLESSNESS IS THE SEVERITY OF THE LAST RECESSION AND THE WEAKNESS OF THE SUBSEQUENT RECOVERY. YET THE WEST'S ECONOMIES HAVE EMBARKED ON CONTRACTIONARY POLICIES. IN SOME CASES THE FAULT LIES WITH MONETARY POLICY:THE EUROPEAN CENTRAL BANK SHOULD REVERSE ITS RECENT RATE RISES.BUT THE MAIN CULPRIT IS A COLLECTIVE, PREMATURE SHIFT TO FISCAL
    AUSTERITY (sound familiar S&L? lol) BY GOVERNMENTS.
    AS THIS NEWSPAPER HAS REPEATELY ARGUED , POLITICIANS NEED TO STRIKE A BARGAIN WITH THE BOND MARKETS: COMBINE POLICIES THAT CUSHION GROWTH NOW WITH MEASURES THAT WILL BRING DEFICITS UNDER CONTROL IN THE MEDIUM TERM. RAISE THE RETIREMENT AGE, FOR INSTANCE AND THAT LEAVES MORE ROOM TO STIMULATE GROWTH IN THE SHORT TERM. A MINIMALTEST OF MR. OBAMA'S JOBS AGENDA WILL BE WHETHER IT IS BIG ENOUGH TO COUNTER
    THE FISCAL TIGHTENING EQUIVALENT TO 2% OF GDP, THAT IS SLATED FOR NEXT YEAR.

    WHERE SHOULD THE SHORT TERM MONEY GO? SOME FORMS OF STIMULUS ARE BETTER THAN OTHERS AT SUPPORTING UNEMPLOYMENT. GERMANY'S SUBSIDIES FOR SHORTENED WORKING HOURS HELPED DISSUADE FIRMS FROM FIRING WORKERS;MR. OBAMA'S SUBSIDIES FOR GREEN TECHNOLGIES FATTENED THE BOTTOM LINE OF A FEW CHOSEN FIRMS BUT DID VERY LITTLETO SPUR JOBS. GOVERNMENTS SHOULD PRIORITIZE POLICIES THAT DO. SOME INFRASTRUCTURE SPENDING, SUCH AS BUILDING ROADS AND REPAIRING ROADS AND REPAIRING SCHOOLS, FALLS INTO THAT CATEGORY. SOME TAX INCENTIVES THAT CUT THE COST OF HIRING, PARTICULARLY FOR EXTRA NEW WORKERS-WHICH IS WHY IT MAKES SENSE FOR AMERICA TO EXTEND AND EVEN EXPAND, ITS PAYROLL-TAX CUT. AND SO IN AMERICA'S CASE DOES FEDERAL AID TO THE STATES, SINCE THE MAIN WAY STATES CUT THEIR BUDGETS IS FIRING WORKERS"
    Last edited by Havakasha; 09-15-2011 at 10:14 PM.

  6. #6
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    S&L. The Economist?

  7. #7
    Havakasha is offline
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    Doesnt fit with your ideological fever? lol

  8. #8
    SiriuslyLong is offline
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    Quote Originally Posted by SiriuslyLong View Post
    Boy howdy do I have answers.

    Let's rebuild the entire navel fleet! The demand for steel, electronics, skilled tradesman would soar. The assets created would the pride of every American. I mean think about it. How many industries would get "touched" - food service, waste disposal, water purification, electronics, health......?

    Here's a recycled idea you probably dismissed in the past. Let's build 1000 state of the art federal health centers that private sector practices can lease from the government with terms. Again, how many industries would get touched? And to keep things cool, Obama can have GE Healthcare supply all the MRI's and CAT scan machines (you know, keep it in the "family"). An oversupply of diagnostic equipment and health care availabiltiy should bring prices down, no? And of course, we need individuals to run these things and staff these centers. With an aging population....................

    I'd support taxing the rich if we would make something of it (as in "assets" and productive assets are better yet - as described).
    Did you read any of this? Are you avoiding reading it? WTF?

  9. #9
    Havakasha is offline
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    Yes I read it. Did you read this. WTF? lol.
    Come on S&L you cant hide from acknowledging his mistaken predictions

    From Wikipedia:

    In a 2002 interview with Southland Today, Schiff predicted that the economic downturn triggered by the bursting of the stock market bubble would lead to a bear market likely to last "another 5 to 10 years."[35][36] In November 2002, US stocks began a bull market uptrend which held steady for at least five years,[37] until reversing course in 2008, when the Dow, NASDAQ, and S&P 500 began a decline to less than half of their peak 2008 values,[38] followed in 2009 by the Dow climbing 61% from its low point over the following year.[39] After interviewing Schiff in 2009, journalist and finance author Eric Tyson, referenced various Schiff predictions during the 2000s and stated that "On all of these counts, Schiff wasn't just wrong but ended up being hugely wrong.

  10. #10
    SiriuslyLong is offline
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    Quote Originally Posted by Havakasha View Post
    Yes I read it. Did you read this. WTF? lol.
    Come on S&L you cant hide from acknowledging his mistaken predictions

    From Wikipedia:

    In a 2002 interview with Southland Today, Schiff predicted that the economic downturn triggered by the bursting of the stock market bubble would lead to a bear market likely to last "another 5 to 10 years."[35][36] In November 2002, US stocks began a bull market uptrend which held steady for at least five years,[37] until reversing course in 2008, when the Dow, NASDAQ, and S&P 500 began a decline to less than half of their peak 2008 values,[38] followed in 2009 by the Dow climbing 61% from its low point over the following year.[39] After interviewing Schiff in 2009, journalist and finance author Eric Tyson, referenced various Schiff predictions during the 2000s and stated that "On all of these counts, Schiff wasn't just wrong but ended up being hugely wrong.
    Hmmm, seems to be off topic. You didn't like those ideas to stimulate the economy? I would like to hear what is wrong with them in your (narrow) mind. Did you even see that I noted that I would support taxing the rich for such endeavors?

    No comment? Really? None at all?

    I agree to an idea from the left and keynesians and NOTHING. Hmmmmm? It really makes one wonder about your character.
    Last edited by SiriuslyLong; 09-21-2011 at 05:08 PM.

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