Friday, January 09, 2009

Krugman Already Offers Spin For Obama Failure

It seems that Democrats are already doing everything they can to spin the coming failure of the soon to be inaugurated Obama administration to create a sustainable recovery from the current deep slump. Obama himself tries to do this by claiming that if his plans aren't implemented we will face years of crisis.

Paul Krugman for his part tries to again disassociate himself from Obama. Krugman opposed Obama in the Democratic primaries, which is likely why he didn't get any job in Obama's administration even though he supported Obama during the general election. Now Krugman again starts to criticize Obama, claiming that his proposed stimulus package won't be big enough (Krugman didn't think Roosevelt's New Deal was big enough, so we shouldn't be surprised by that) and is too focused on tax cuts relative to spending increases ("only" 60%).

As Krugman correctly sense that the Obama package won't solve the problems, he is already starting to get disassociated from it, so that once the failure becomes apparent, he can say "see I told you so" and "explain" this by saying that Obama's "New Deal", like Roosevelt's, was too small.


Blogger goo8734 said...

And if, for some reason, the economy does recover fast or unemployment doesn't increase as much as expected, then Krugman will say, "See the Keynesian multiplier is really big!".

He accuses free marketers of always blaming the government for bad stuff and giving credit to the market for good stuff, but he really does the same thing on the other side. If the market somehow gets out of this mess quicker than expected, he'll still give credit to the government.


7:48 PM  
Blogger goo8734 said...

The other odd thing about most Keynesians on this (including, I think, Krugman -- although I don't know about Keynes himself) is that they rarely point to defense spending as a good way to stimulate the economy. But from a Keynesian standpoint, this is probably one of the BEST forms of government stimulus since so much of it is direct government purchases of goods/services, rather than transfer payments.

Martin Feldstein recently proposed more defense spending, but I haven't heard anyone pick up on this.

This further suggests that the argument is not entirely economic -- but also ideologically driven.


7:52 PM  

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