From the comments, on the stimulus

The people were grumpy yesterday!

I’m pretty sure that the “stimulus” package isn’t really about stimulus. I think it’s more to do with trying to compensate or mollify a citizenry that is rightly angry about the incompetent pandemic response. The government can’t come out and openly say “hey we screwed up so here’s $2,000”, so they call it stimulus instead.

I also think the Democrats are keen to refight the global financial crisis of 2008. It’s embarrassing to them that Trump was able to inject such massive stimulus into the economy.

Economists are quite right to object to all this as being way too much, way too late. But, well, here we are. Maybe we’ll see inflation after all.

That is from Brad F., and from B.B.:

Let’s bring James Buchanan into this.

Politicians have figured how to get away with handing out checks to get votes. It has nothing to do with stimulus. Biden would have done it without a pandemic if he could get away with it. But he couldn’t, so he used the pandemic. Never let a crisis go to waste.

He added the largest percent rise in the minimum wage in history to the “stimulus.” Is that going to boost employment? Of course not. Economists express frustration that politicians don’t under economics. They do, they don’t care.

Unions don’t want competition from lower-wage workers. So they want both minimum wage hikes and protectionism along with legislation to promote unionization. The unions understand their self-interest. Biden understands his self-interest; he gets union support.

Economists are supposed to understand self-interest. Why won’t we apply it to politicians?

And from Moral Panic:

I think he’s partly complaining that one can argue Biden’s proposal is way, way off, and yet we can barely discuss it. And the autopilot is not because there are minor differences, so come on, let’s get on with it. No, the alleged bill of goods has major issues.

I appreciate what Summers and a few others are saying. This seems similar to Obamacare’s passage. No debate allowed, and we’ll figure out what it means eventually. I find the straight-up endorsement by elite media especially disappointing, with the only notable dissent in true progressive form being about not giving stimulus $ to affluent people.

To be clear, no one is arguing for doing nothing, or questioning the value of automatic stabilizers.  Most of all, it is to the credit of Summers that we are debating this at all.



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