A serious-minded characterization of Jeffrey Sachs
Reihan Salam is a friend of mine and a very smart guy, but he has an odd habit of substituting positions he likes for positions that are operative in the American political debate. There's something to that: It's important to respond to strong positions even if they're not being advocated by either political party. But it's also important to respond to the positions being advocated by actual politicians when you're talking about votes they may or may not make.
So today, in response to David Leonhardt's column responding to "the unyielding criticism from those who opposed stimulus from the get-go," Reihan complains that Leonhardt's article isn't "a fair or even serious-minded characterization of, say, Jeffrey Sachs’s argument." Well, probably not. But it is a fair characterization of Scott Brown, who said “the last stimulus bill didn’t create one new job,” and John Boehner, who said “when it comes to slow-moving government spending programs, it’s clear that it doesn’t create the jobs.” And it's their arguments that are relevant when it comes to future stimulus spending.
As for Sachs, I doubt that the austerity-advocates would find much truck with his views. He's for debt reduction, yes, but he wants to see it in the context of a transformation into Switzerland. His specific recommendations are "income support for the poor, universal access to basic healthcare and education, a scaling up of job training programmes and promotion of higher education"; massive public investment in "good education, cutting-edge technology, reliable infrastructure"; and tax reform such that "the rich pay more in income and wealth taxes – indeed, a lot more." He also says that "fighting for market credibility via draconian cuts in spending ... is the wrong approach." At another point in the column, Sachs says he would've been fine with a massive stimulus that had been focused on green jobs, "in which the fall in consumer spending would be offset by investments in sustainable energy."
In other words, Jeffrey Sachs is looking for the straightest line toward a more liberal economy. If a stimulus-approach would get him a green economy, then that's fine. If a sort of social-democratic austerity will do it, that works, too. If the Republican Party was actually arguing for a Sachs-like approach in which we just figure out the quickest way to become more like a Nordic country, we'd have a very different argument on our hands.
Meanwhile, nothing in Sachs's column specifically disputes the argument for stimulus. Sachs says that he disagrees with those who think that "a short-run fiscal boost would jump-start the economy" and "that the rapid rise of public debt occasioned by stimulus need not be a concern." But he doesn't present any evidence that the consensus estimates on the stimulus's short-run fiscal boost were wrong, and the Leonhardt position -- and mine, and Paul Krugman's, and so on -- is that the run-up in public debt should be handled by a combination of short-run stimulus and medium-to-long term debt reduction.
July 2, 2010; 3:33 PM ET
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