I just want to draw quick attention to this post over on naked capitalism. Not so much for her end point (which is nonsense*) but for the comment one of her friends makes on stimulus.
He made short order of niceties and got to the point: “We need more fiscal stimulus. Obama did too little and too much of what he spent on was liberal pork. We could and need to spend a lot on infrastructure. This is looking a lot like 1936. I’m afraid it could get really ugly. And I’m particularly worried that the Republicans will win big this fall. They’ll cut even deeper, that’s the last thing we need right now.”
I agree thoroughly. And I have made this point before. The unifying factor in almost all global growth stories is an improvement in infrastructure, and America is no exception: America's past success has been on the back of road, rails and communications infrastructure. You are supposed to spend on these things counter-cyclically in order to provide short term employment and stimulate businesses related to infrastructure construction. He is equally right that the Democrats spent far too much on entitlement programs whose affects won't be seen for years, and won't have as much long term benefit to economic growth.
*The other things have little to do with economics, but people talking about desensitization to violence always annoys me. People are more adverse to violence then they ever have been in the past, and there's statistics to back that up. Lack of food is also much less of a problem then it has ever been. She somewhat distances herself from these comments at the end just noting that there is pessimism in the air, but the tone makes it clear just how distant people are from on the street realities....
of course I live in a completely different country... so I shouldn't talk about distance.
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