Friday, July 01, 2016

Gimme that old time Bipartisanship

A Bipartisanship flashback from Paul Krugman: Stimulus arithmetic (wonkish but important) New York Times 01/06/2009.

Krugman has always been critical of President Obama's adventures in bipartisanship. Which is why I've been surprised by his enthusiastic support for Hillary Clinton in the Democratic primaries this year, which he pressed with the all-too-common scorn of Hillary supporters for Bernie Sanders.

This column is from January 9, 2009, before Obama's inauguration. Obama was already telegraphing something like the initial stimulus plan which was pretty much along the same lines of this one. Krugman has always criticized that stimulus as being about half the size that was need to quickly return the economy to something like a pre-crisis condition. Since Europe was even more caught up in austerity madness, it makes a good comparison with Merkel-nomics in retrospect. But it was not as big as it should have been.

And the Bipartisanship of the deal worked out about like Krugman expected:

This really does look like a plan that falls well short of what advocates of strong stimulus were hoping for — and it seems as if that was done in order to win Republican votes. Yet even if the plan gets the hoped-for 80 votes in the Senate, which seems doubtful, responsibility for the plan’s perceived failure, if it’s spun that way, will be placed on Democrats.

I see the following scenario: a weak stimulus plan, perhaps even weaker than what we’re talking about now, is crafted to win those extra GOP votes. The plan limits the rise in unemployment, but things are still pretty bad, with the rate peaking at something like 9 percent and coming down only slowly. And then [Republican Senator] Mitch McConnell says "See, government spending doesn’t work.”
Krugman explained his economic reasoning at the time in that column.

I certainly hope we're not looking at four years of Donald Trump. But I also worry that with Hillary in the White House, we'll be facing four more years of similar "bipartisan" dancing. With similar results.

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