DRIVING AROUND A BLIND CURVE
...AND GETTING A MANHANDLE ON LONG-TERM MARKET EXPECTATIONS
If we had done a proper stimulus package back in April, we'd be talking about the jobs it would be creating now and in the next quarter. Several people, including yours truly, suggested a long-term view, one that involved significant infrastructure and targeted industry (alternative energy projects) spending and subsidy.
Of course, some economists argued and got the short-term, tax-rebate, to the tune of 1-1.5% of GDP, as I recall. The political will didn't exist to double it, by levying a windfall profits tax on the oil companies.
Since Meagan McArdle was just making sound points about cognitive errors, I'll ask those economists now, what was their "Plan B"? To wash-rinse-and-repeat?
Note(s): when you don't know the scope of a problem, it's risky to go for the 'quick fixes'. As with driving around a blind curve, leave yourself and out! Put another way, never be afraid to ask, "What if I'm wrong?".
Wednesday, October 8, 2008
Afternoon Pensée
