James Fallows puts economic news in order:
“…this morning’s jobs report makes me wonder whether, as a political system, we ever learn anything. Even this basic thing: That when tens of millions of people cannot find work because of an overall “failure of demand” — not enough paychecks going to not enough people who can not make enough payments to create jobs for enough other people — the main problem facing the nation is not “runaway government spending.” Any more than it was when Herbert Hoover tightened up on spending as markets crashed, in the wave of folly that Keynes and Ahamed in their different ways chronicled. A lot has changed since the 1930s, and the 1970s. But not this basic principle
Some of his readers’ responses:
From FVH, a businessman on the East Coast:
>>As an owner/manager of a small manufacturing business I suffer a combination of despair and anger each time a political animal, of whatever color, promises to “focus like a laser on job creation.” I neither need nor want Government to focus on “job creation” (as though it were in their power to do anything in that realm). I need it to focus on “customer creation”! IT’S DEMAND, STUPID!
If governments can induce demand, I will happily handle the part about “job creation.” Get me to the point where my 1.5 production workers have to be put on overtime to fill the orders and I will quickly make my part-time employee full-time. A few more customers and I’ll hire another worker. Look, guys, that’s what we do out here! Don’t worry about cutting my taxes, don’t concern yourself with over-regulating me, don’t fuss about the “death tax” depriving my progeny of the joy of running my business. That is all trivia! This is all about Demand Side Economics.
Oh, and don’t look now, but if we can get a little “demand creation” goin’ on, so I (and my ilk) can hire some folks, then maybe those folks can think about dumping their overpriced rentals and buying foreclosed homes, thus addressing the housing inventory glut and moving us toward housing recovery. And thus beginneth a Virtuous Circle.<<From JK, whereabouts unknown:
>>My greatest disappointment with Obama so far has been his inability to explain economics.
just saying ‘stimulus’ is not an explanation. And saying that the government, like a family, must balance its budget is crazy — as Krugman repeatedly points out.
Why has Obama NOT EVER tried to explain counter-cyclic government spending?
Why has he not explained the need for deficit spending?
Why has he NOT used the Great Depression as an example?
Why has he NOT taken on the inconsistent and self-serving arguments of the Republicans?
The level of discussion has been appallingly low. The points are not difficult to present. But, at some stage, a bit of economics must be presented and defended. It’s not an argument of the morality of economics — share the burden — its how a government fights a weak economy.<<
What more can you say? In addition to his many other talents, Mr. Fallows was trained as an economist.