“Now I’m looking at the political system turning itself into a paralyzed beast. A lost decade now looms as a much bigger risk. The Fed’s running out of powder; Its really powerful ammunition has been expended.”
-Alan Blinder, former vice chairman Federal Reserve, on whether the US could sink into a Japan-style quagmire
Peter Goodman has a longish article in the NYT Week in Review, What Can Be Done to Cure the Ailing Economy?.
It is notable for a few reasons: Great chart porn (see right), a few good quotes (see above), and a bombshell from Bruce Barlett, the Treasury economist in the first Bush administration.
Bartlett has become a pariah to the Republican party, saying out loud what few people dare to even think. He notes that we are already in gridlock, with the GOP deploying a blocking strategy. He thinks nothing substantive is going to change for a simple reason:
“Clearly, a weak economy in 2012 will be very good for whoever the Republican presidential candidate is. It’s hard to see how the Republicans lose by blocking stimulus.”
That is a pretty damning accusation. Bartlett is essentially arguing that the anti-stimulus crowd is doing so not for ideological beliefs, but for political advantage. He is implying their goal is to keep the economy weak in order to prevail politically.
That is quite an accusation . . . Do any of you buy it?
UPDATE: August 29, 2010 6:00PM
Bruce Bartlett writes in to clarify my interpretation:
I don’t actually believe that there are any Republicans intentionally blocking policies that they know would help the economy just so that their party would benefit.
But on the other hand, there is no denying that a bad economy is good for the out-party, especially in presidential elections. So what we have is a situation in which Republicans can’t lose. Insofar as they actually believe that their policies would be better for the economy than Obama’s, and insofar as Obama’s policies are in fact bad for the economy, Republicans benefit politically from gridlock either way.
The only way Republicans can lose is if Obama suddenly gives them carte blanche to enact whatever policies they want and we get a 1937-type double-dip from inappropriate fiscal tightening. But then it would still be Obama’s fault for listening to them. As Otter explained to Flounder in Animal House, “You f&%ed up. You trusted us.”
What Can Be Done to Cure the Ailing Economy?
Peter S. Goodman
NYT, August 28, 2010