Again, it’s funny how US Administrations can’t simply admit error and then act accordingly. No, they have to try to persuade us that their error wasn’t really an error because of x, y, or z. President Obama has now tried to ”correct” Joe Biden’s statement about “misreading” the economy by saying that there was no “misreading,” only “incomplete information” on which to base the stimulus package.
So, does that mean that Paul Krugman, Joe Stieglitz, Nouriel Roubini, Nassim Nicholas Taleb, Dean Baker, Jamie Galbraith, Brad DeLong, Robert Kuttner, Robert Reich, and a host of other economists including some on the conservative side, who all advocated larger stimulus packages all had more complete information that the White House? Forgive me, but I think this is just so much baloney, and improves the situation not at all. “Incomplete information” wasn’t the problem. Instead, the economists the Administration didn’t listen to just had better theories than the Administration, whose forecast about what would happen to the economy if the stimulus bill passed was just plain wrong.
Again, it’s time for the Administration to admit its error, to hold people accountable, and to replace the economic team that failed with a new economic team whose thinking is likely to be better, as Scarecrow also says here. Again, there are lots of people going broke out there. This Administration needs a plan that will work. Today, Mike Lux suggested that what we really need is a jobs bill, and not a new stimulus package. I think he has a point. The stimulus package we have won’t produce nearly enough jobs to overcome the effects of the depression. Let’s get a bill that will. Mike has some good proposals about the provisions in such a bill. But let’s also consider direct Government employment of the kind we saw in the Roosevelt Administration. What about the budget deficit. Screw it! If we get people working again the tax revenues will be there to bring down the national debt as a percentage of the GDP in a very few years. The greatest danger from the National Debt point of view is remaining in this economic contraction for a protracted period of time. We can’t afford a lost decade, in addition to the eight years whose illusory gains have already been wiped out by the bursting Bush bubble and depression.