Thursday, February 05, 2009

Consistency Is A Vice?

Menzie Chinn attacks Rush Limbaugh and others for always pushing for tax cuts, whether it is a boom or a bust.

The attack resembles one from Paul Krugman a little more than 2 months ago wrote:

"The answer is, eliminate the capital gains tax. Now, what was the question?"

First of all, Chinn and Krugman, exaggerates. I don't think Limbaugh or anyone else really think it is the answer to literally every question. It is however what they always think will boost economic growth. And Krugman's example to suggest an even wider faith, how some Republicans wanted to push through tax cuts after the 9/11 attacks weren't about thinking the tax cuts would stop al-Qaeda, it was about boosting the economy after the negative shock that the attacks constituted (His misleading description of this made the title of his post "Caricature economics" quite appropriate).

And secondly, Krugman and other Democrats have been quite consistent in pushing for increased government spending on for example health care during both the housing bubble and during the current slump. So if consistency is really a vice, then they are guilty too.

And thirdly, at other points, Krugman have attacked "right-wingers" for supposedly being inconsistent. Krugman once quipped "Just as there are no atheists in foxholes, there are no libertarians in a financial crisis." , referring to how some (but certainly not all, including me and even Limbaugh) of those that generally claim to support free markets supported bailouts of financial institutions, something which supposedly refuted the validity of free market principles.

And fourthly, and most importantly, it shouldn't be considered a vice to be consistent. Chinn and Krugman may disagree with that all they want, but if you really believe that tax cuts will boost structural growth why not consistently favor it both during booms and slumps? If anything, that should make your belief in it more credible.


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