LongLiveYorke, on Monday, August 30th, 2010, 3:05 AM, said:
It's funny that the thing he has very little control over, the economy, is the thing that most drives his chances for reelection.
the fact that we so blindly vote with the economy bodes terribly for us. the incumbent is motivated to use the short-term tools (like stimulus or tax cuts without spending reduction) to juice economic performance going into an election year. this can be catastrophically damaging if overused.my views on this are close to tyler cowen's from this podcast. he also uses the word "politicking" so he won even more points there.the great stimulus experiment
I swear I'm not getting a referral bonus or anything from these guys, I just love how fair, honest, and accurate it is.EDIT: partial transcript! he goes deeper into what types of stimulus he finds acceptable in the podcast.Dr. TYLER COWEN (Economics, George Mason University): If we spend $700 billion and the economy recovers within a year, a year and a half, I would take that as serious evidence that my view is wrong. I don't think it will happen, but I would take it seriously.KESTENBAUM: That is rare for someone to say: Maybe I'm wrong. Call me back in a year and a half.BLUMBERG: It's been a year and a half, so we called him back, and...KESTENBAUM: Tyler Cowen does not think he was wrong.Dr. COWEN: If you just look at the actual outcome, I would say what we did didn't work.KESTENBAUM: The economy has been growing for about a year, but unemployment is still high and Cowen thinks the economy might be turning down again, a double dip recession.Dr. COWEN: Stimulus, for sure, it works in the short run. The thing is, what happens when you pull the stimulus away? If you simply slide back to where you were, all you've done is postpone that process of adjustment. And I think that's what we're seeing. So I view it as a kind of short-term fix that gave us some stabilizing properties but didn't really turn the economy around.