une 05

What Exactly Are We Crowding Out? – Yves Smith at Naked Capitalism asks, "Why is Washington Dithering With Unemployment High?" Brad Delong speculates that those in power or those who chatter about those in power have become disconnected from "mainstream America." Edward Glaeser provides another possible answer for DC dithering and indifference here: If nothing else, Glaeser provides the finest example of dithering I have ever personally witnessed: And so we are left wading in ignorance. It is a great tragedy that the most important area of economic decision-making is also the area where we will always know the least. A tragedy indeed. Don’t just do something! Stand there.  How are teaching, public health, road-building, grid updating, new energy, and law enforcement "make-work" jobs? Some of any well-targeted fiscal stimulus would presumably go to preserving such jobs and services. In an ideal world, some "make-work" jobs would improve roads, bridges, mass transit, and other infrastructure. This is a reasonable role for government to play, especially if private entities are unwilling or unable to coordinate and produce these things. It’s  "investment" in public infrastructure and in the productivity of future generations.


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