The issue rarely is what specific expertise the actual president has. No one person can know everything. In a way, Cheney and Bush were correct in saying that a president can learn what he needs to know and get the advice he needs.
The issue is really how does this person go about learning and asking for advice? On the one hand, you have someone like Clinton, who, if he didn’t know something, went out and really learned about it. The problem with Bush was not that he didn’t know everything from the start, but his assumptions and his attitude towards acquiring knowledge and advice. He started from the position that his ideology was correct and allowed himself to be steered towards advice that confirmed his biases.
He wasn’t criticizing the science of economics. He was criticizing the people who purport to apply it without understanding its assumptions, in particular, that “all other things being equal” is rarely a condition that exists in the real world.
I’m a conservative and I agree that Reagan’s view was the right one, but I don’t believe it’s objectively verifiable or that other views are objectively wrong, especially since any discussion of this type must include an agreement on what the proper role of government is. And that question is also one on which reasonable persons may disagree.
Herbert Hoover had something more than a clue about economics. Unfortunately, every assumption he had turned out to be either inadequate or flat out wrong for the situation he found himself in.
It has been a long time since I had any formal coursework but isn’t “All things being equal” essentially the same as a first partial derivative without people going into a panic over calculus?
My favorite line is “All the economists in the world placed end-to-end still wouldn’t reach a conclusion.”
Solve our problems? If only he had the power. I don’t know why people think that the role of policy makers is to solve economic problems when they simply don’t have this ability. What policy makers can do is manage the economy. This means determining the appropriate monetary and fiscal policies based on the economic situation, and then implementing the policies. Sometimes tax cuts are needed and sometimes they’re not. Sometimes increased gov’t spending is good for the economy while other times it’s not. We allow our monetery policy maker (the Fed) to adjust interest rates to keep the economy moving along at a reasonable pace while battling inflation. But yet we expect our fiscal policy makers to stick with simplistic platforms like “lower taxes” and “small government” when sometimes the opposite is needed. Maintaining a consistent, but wrong, policy does no one any good.
Obama, so far, seems like he understands this better than any president in recent history. He doesn’t seem to have any fear of being labeled a flip-flopper. I thought Michael Bloomberg would have made the best president, at least as far as the economy goes. Obama seems to be setting up his economic strategy very much like Bloomberg probably would have. In order to minimize the impact of the recession, it’s the government’s job to fill the roles that the private sector is abandoning. When the rest of the economy is de-risking and de-leveraging, it is the government’s job to risk itself up and lever itself up. And that’s exactly what is happening. Now is when deficit spending is appropriate, not when the economy is humming along. In fact, when the economy is doing well, taxes should be high enough to support government spending. Historically, we’ve done the opposite. It’s the deficit spending during good times, driven by greed, that has greatly contributed to the mess we’re in. And during bubbles, the most recent recession always seems to be forgetten. In fact, when taxes are too low, government spending actually increases, because taxpayers perceive that the government services that their taxes are supporting are cheap. So they elect politicians that promise more services, not realizing that the services are far more expensive than they think.
Although, to be fair, it was GHWB who swallowed his “no new taxes” pledge and agreed to a tax hike which helped lay the foundation for the big surpluses of the late Clinton years. (I know, I know: which GHWB’s son then squandered. Oh, the irony!).
None of those things are neccesarily always wrong…that is to say, there are times you can increase government revenue by lowering taxes, there are times that increasing the wealth of the rich will lead to better conditions for the poor, that deregulation can make markets behave better, and that running a deficit can improve the economy.
One of the problems comes when people then generalize and assume those four things are true in all cases.
Economics isn’t a science with universally agreed upon ideas of what is a good idea and what isn’t. Just because you disagree with politicians on their economic policies and their schools of thought doesn’t mean that they don’t understand it. Obama has some of the most highly-regarded minds in the field behind him and just because they don’t agree with “Uncle Milty” doesn’t mean they’re wrong. Paul Krugman tends to agree with Obama’s approach and someone thought he was smart enough to give him a Nobel Prize.
Dude. When times are tough, you get belt-tightening. The federal government, due to size, continuity, ability to print money and adjust interest rates, and monopolization of force is literally the one entity in the country that can ignore that in the short and medium term. If you have an idiotic federal spending freeze like some have suggested, that just means no money for roads, construction, etc. Which means no jobs for laborers, which means an ever increasing spiral downward into Depression. What the government needs to do is spend spend spend. Intelligently is better than profligatgely, but profligately is better than miserly. Because that money goes into the hands of workers and investors, who then use it to buy nail polish and cars, and then the guys who make nail polish and cars have money again, etc., etc. The only way to get yourself out of a Depression is to spend your way out of it. It worked in the '30’s, and it’ll work now.
True, that. Unfortunately, GHWB’s lesson to the Republican party seems to be that you should never, never, depart from ideology in the face of reality. Anyhow, GHWB proved that he understood economics by calling supply sideism voodoo.
Will we have a treasury secretary that understands economics? Presidents are party heads that appoint people to control the agencies. They do not have to have a complete understanding of any field.
Reagan was nothing more than a figure head, by most accounts. He was also said a total moron-nice guy, but a moron. (By all accounts, according to his own staff),
AND he was in the throes of Alzheimers.
Not someone I’d trust as someone who “understands the rudiments of economics…”
While economics is not an all-encompassing field, in the context of the social arena it is pretty damn close. People’s implicit association of economics with money is the perplexing problem. If economics is about choice, alternatives, and scarcity, then it seems like an absolutely excellent thing to be a master of if you are to make political decisions, of which the hotly debated ones are about choice, alternatives, and scarcity. IMHO.
Let’s hope that we never again have a President with Reagan’s understanding of economics. His own budget director, David Stockman, said that supply side tax cuts were a trojan horse to get tax cuts to the wealthy. Bush II’s tax programs were similar. They have not done wonders for the economy (conceding that there are other factors.)
I would be satisfied to see an economic team in place that resembled Clinton’s team. During that time the economy prospered. Obama seems to be putting the same kind of people in place. With the exception of Paul Volcker. Volcker caused the 79 recession with the Feds extremely high interest rates, and should get the blame for the lousy economy at the time. I hope that Volcker, who is now a very old man, has very little to do with the economy.
But the reasons I liked the Clinton team were that they kept middle class taxes reasonable, got unemployment way down (to the 2-3 percent levels), balanced the budget and kept the size of the federal government employee head count under control. The economy prospered. The “more recent administration” did all the opposite things, which are considered more reckless, and our economy sucks right now.