After the fact assessments of the 2009 responses

A long long time ago I wondered whether anyone besides Paul Krugman regretted past economic positions for insufficient radical ambition, and I was thinking about both macroeconomic orthodoxy (globalization good, inflation bad, fiscal deficits risky because inflation bad) as well as policy. Paul Krugman remains a good egg on this front; so, too, does Dani Rodrik. Brad deLong and Christina Romer both regretted the limited scope of what they did; Larry Summers, despite feints at expansive thinking, remains … less than repentant.

I felt great relief when the American Recovery Plan was passed, not least for what the bill contains, as for the potential it promises for future policy. JW Mason goes into far more detail about the broad strokes and particulars of what makes it revelatory, so I won’t belabor those details. But something else that delighted me is this piece in the New York Times by Astead Herndon, with the provocative title “Democrats, Pushing Stimulus, Admit to Regrets on Obama’s 2009 Response“. After lots of evidence of the Fed moving in ever more radical directions, unhampered as it is by Congress, and after Democrats’ movements in Congress toward a relatively expansive early response to the crisis that was subsequently quashed by Republican opposition (that may, ironically, have improved Trump’s chances in the presidential election last November), it’s good to see Congress resisting the quibbles of people like Larry Summers, Olivier Blanchard and the whims of would-be bond market vigilantes. I hope they stick to it, since there is still so much to be done.

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