Economics

Obama, Political Economist

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Peter Boettke wonders about Obama's ability to "to get beyond the stale ideological debates of the past" when he is following a well worn path in reflexive government "action":

Why not…Consider once again the arguments that "lost" due not to intellectual defeat, but political expediency.  What were those pre-Keynesian ideas regarding the economy and the proper role of monetary and fiscal policy?  President Obama said he cannot take seriously criticisms of fiscal irresponsibility from politicians that when they were in power doubled the national debt.  Good point. But does that mean that fiscal irresponsibility is off the table as a concern? How pragmatic is that, as opposed to how politically convenient is that excuse?….

NOTHING he is doing is radically different from what President Bush did before him….. No answer has yet been given as to why President Bush's bailout package didn't work while his stimulus package will. In fact, when pushed on that question President Obama really just said, we might even need to spend more down the road when this doesn't give us the result we want….

And what if the pragmatic answer requires less bold, decisive action on the part of the federal government? Not on Obama's table, alas:

What is really causing the problems…is that government action has produced an uncertain investment environment. The rules of ownership and control are unclear, or clear but counter-productive for individual initiative; monetary policy guided by the rhetoric of fighting inflation, but fearing deflation has been so loose that long term inflation that threatens the viability of the dollar should be a real concern to investors; and fiscal policy which is so out of control that US public debt will bankrupt the future generations with an astronomical tax burden and/or a monetization that will destroy the currency through hyper-inflation.  Whatever way you slice it, our current policy path is the PROBLEM not the SOLUTION.

But if your intellectual range is from M-N (lets say Larry Summers to Paul Krugman), then don't be surprised when in being "rational", examining the "evidence",  weighing the "arguments" and assessing the "theories", you fail to consider the fiscal arguments of a James Buchanan, the monetary and capital theories of F. A. Hayek, the comparative institutional analysis of law and politics in Ronald Coase, and the monetary and fiscal policy arguments of Milton Friedman.