I hadn’t realized that Amity Shlaes is a “senior fellow in economic history at the Council on Foreign Relations.” I kind of wonder what it takes to get made a senior fellow in economic history at the Council on Foreign Relations. She’s got a bachelor’s degree in English and her columns once won a prize from a libertarian organization for some articles that “compared the failing economy of high-taxed and over-regulated US state of Maine to the success of the increasingly economically liberal Ireland; and showed that US workers benefit from taking responsibility for their own pensions.” That’s it.

I have a really, really, really hard time imagining the CFR doing something comparable for a liberal with so little in the way of relevant qualifications or track-record outside an ideological cocoon. Just saying. Where’s my fellowship?

http://yglesias.thinkprogress.org/archives/2008/12/qualifications_i_can_believe_in.php

The banks still are not lending – to one another or industry. They are in a country-wide prisoners’ dilemma. They all want to cheat – wait and watch until other banks take the risky step of being the first to lend again. Then when the field is given the all clear, they too will re-enter the market.

The way out of this dilemma is to make the government look like the mafia – make cheating too expensive to contemplate. In the mafia, if you are caught jeopardising the family by avoiding personal risk, then you are very likely to get a punishment much worse than the one you were trying to avoid.

Example programme: list the top 20 US banks in the interbank market. Look at their new lending vs their capacity to lend. Rank them. Drop the bottom 2 from the any bank support processes. When they fail, let them. Repeat every 2 weeks until lending reaches escape velocity. Advertise this plan 2 weeks in advance of the first cull.

Some other plan might work better. But the point is: it has to be an offer they cannot refuse.

gz and colion — not only are you unable to muster any coherent criticism beyond name calling, you are also too lazy to bother with any sort of analysis or criticism.

Intellectually vapidness and limp critiques wont win you any popularity contests around here . . .

This is incredibly wishful thinking if not downright naiveté. Obama and the Democrats have spent well over a year proposing the use of “public money” for their own brand of reckless spending; to spur income equality and to fund their favorite social/economic/environmental. This was long before the current financial collapse got a head of steam. There hasn’t been a single statement from Dems supporting… let alone a plan to “pay off” anything. The only thing that’s changed in the past couple months is their rationale for more Federal spending: “Jolt” the economy.

“She did so by using a definition of recession — 2 consec Qs negative GDP — that was outdated centuries ago.”

Many people and outfits still use this seat-of-the-pants definition, and not unreasonably, because there actually is no definition of “recession.” (Check the NBER site; you’ll see.) It’s just a moniker that’s applied retrospectively by a group of sages standing at the taffrail and holding up their collective thumbs while squinting at the wake.

Those sages, their thumbs, and their squints inevitably change over the years and decades, making their designations over those same decades basically incomparable and hence, meaningless.

maybe you see something I don’t, but what is the value of referencing M. McArdle?

were you tring to fill some sort of quota?

Ironically, one of the few places Canada is more conservative than the US is in regards to government policy towards debt, deficit financing and their banking system. Through a sheer quirk of timing, that is the ‘bet’ that paid off for Canada. Had this crisis happened only 12 years ago Canada would be looking like Iceland is today

I agree that Krugman is a real economist, in the same sense that I agree that Ptolemy was a real astronomer.

http://www.mlahanas.de/Greeks/PtolemyAstronomy.htm

Looks like we agree. The fiscal stimulus is a last resort measure. We would be in a better position to pay for it had we not already spent trillions on the unnecessary tax cut and the two wars. In other words, we were all spent out before this crisis started.

Few people would call Canada conservative. But I agree with you whole-heartedly. The simple-minded right–as opposed to the thoughtful right–is out of ideas. That’s a shame. By fixating on anything the state does, as Shlaes and several commentors do–they miss the real terrain of the current debate. The fiscal stimulus has a very strong consensus.

Now the politics is in making sure it gets spent on economically meaningful projects, not just pork and job preservation. Shlaes says this. But so does Krugman. And the point of this post was to illustrate that Shlaes’s petty arguments do nothing to acknowledge that commonality, nor do they offer a constructive debate about the stimulus itself.

Indeed, the whole conversation about the New Deal and the Depression is a distraction from our current situation. The lasting value of the New Deal was not the anti-competitive practices but the social safety net. Long before this crisis began, our politics has been frozen over how to revamp that safety net in a economically sound manner. Reforming Social Security and Medicare (not a New Deal program) will have to wait for some time. But we won’t be able to move forward without addressing the flaws in those programs.

Arguing about whether the government’s spending will crowd out private jobs–when the economy is shedding jobs rapidly–should get you laughed out of the room. Shlaes isn’t a conservative thinker; and several of the posters are correct: her arguments do give conservatives a bad name.