« The Not So Common Factors Behind Inequality | Main | Paul Collier on Why Nations Fail »

Saturday, March 10, 2012

Will the Real Kevin Hassett, If There Is One, Please Stand Up?

Kevin Hassett today:

Job Creation Only the Tip of the Iceberg, by Kevin Hassett, NRO Online: After digging through the details of the jobs report, it is clear that the message we delivered last time, that the lift-off has finally happened, has been confirmed by this report. ...
It is no coincidence that the private sector is taking off while the government stimulus is winding down..., the years of pent-up activity that were suppressed by uncertainty over Obama’s policies is finally being released. Thank God for gridlock.

So the stimulus was holding back the economy? And not so long ago he wrote:

Initial claims for unemployment benefits surged to 500,000 in mid-August, a level more typical of a recession than a recovery. ... Incredibly, some Keynesians who supported Barack Obama’s $862 billion stimulus now claim it fell short of their goals not because the idea was flawed, but because the spending package was too small. ... In all likelihood, the data will soon be so convincingly bad that we’ll again debate the need for an economic stimulus. Let’s hope that when that begins, all will finally concede that the ideas of John Maynard Keynes are as dead as the man himself, and that Keynesianism is the real voodoo economics.

But here's Hassett in 2001 playing for Team Republican. He is using Keynesian arguments to make the case for the Bush tax cuts. And compare this statement about the stimulus being to small to the one above:

Dr. Hassett: I would just like to add, Mr. Ryan, that the economists who studied this were quite surprised to find that fiscal policy in recessions was reasonably effective. It is just that folks tried  a first punch that was too light and that generally we didn't get big measures until well into the recession. So the reason that in the past fiscal policy hasn't pushed us out of recession is that we delayed. ...

And in a rare moment of candor:

Conservative Economist: 'Find the Unemployed and Hire Them', by Derek Thompson: ...Kevin Hassett,... the director of economic-policy studies at the American Enterprise Institute and an economic adviser to Sen. John McCain, recent attacked President Obama's economic plan as "voodoo economics"...
But when I got him on the phone to talk about the unemployment crisis, he struck a different tone. ... The problem, he said, was that Obama's stimulus was not direct enough.
With the Recovery Act, the White House eschewed direct hiring and aimed instead to raise overall economic output in the hope that more activity would lead to more demand...
"My idea is simpler. Find the unemployed and hire them."
If the government had spent the stimulus hiring people directly, we could have supported 23 million jobs, Hassett claimed. Hiring millions of unemployed workers directly into government organizations that already exist -- such as the military and the Army Corps of Engineers -- would be a much more efficient use of government funds.
Hassett defended direct government hiring, which the federal government used en masse during the Great Depression... "Since the economy has created this class of long-term jobless, the arguments for government hiring becomes stronger," he said. "If you give the person a job for a while, it helps them get a job later. You remove the stigma."

Remember the show "To Tell the Truth?" I feel like it's time to ask for the real Kevin Hassett to please stand up. Problem is, since he seems willing to use whatever argument makes the case he wants to make whether it's consistent with his other statements or not, and whether he really believes it or not, I'm not sure there is a real one.

    Posted by on Saturday, March 10, 2012 at 12:07 PM in Economics, Fiscal Policy, Politics | Permalink  Comments (25)



    Feed You can follow this conversation by subscribing to the comment feed for this post.