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Sunday, November 11, 2012

What is Practical Is Not Always the Same as What is Best

I can't figure out what the point of this column from Robert Shiller is. Is it nothing more than an attempt to promote Gene Sperling and his (seven year old) book? I guess the point is that Sperling is a practical guy (unlike the academics he names earlier in the column ), and we practical people that in Washington and the administration:

Sperling is fundamentally different from the typical academic economist, who tends to concentrate on advancing economic theory and statistics.
I believe he's a lawyer, not an economist, so one hopes he'd be different. Anyway:
He concentrates on legislation – that is, practical things that might be accomplished to lift the economy. ...
At one point in his book, Sperling jokes that maybe the US needs a third political party, called the “Humility Party.” Its members would admit that there are no miraculous solutions to America’s economic problems, and they would focus on the “practical options” that are actually available to make things a little better.
Americans do not need a new political party: with Obama’s reelection, voters have endorsed precisely that credo of pragmatic idealism.

There are plenty of people who support Sperling, and he has been a defender of programs like Social Security so I suppose I should be more "practical" and support him as well. But I've always been wary. Somehow this embrace of practical choices sounds like it's heading toward typical centrist, Very Serious People type change. Compromise to get things done, and don't pay too much attention to the core principles that ought to be defended.

After all, the reason he was brought in, or one of them anyway, was to support one of Obama's biggest mistakes during his first term, the shift to deficit reduction when job creation should have been the first priority:

With Republicans holding more power in Congress, Mr. Obama wanted someone to help him engage them on issues like deficit reduction

Yes, that seemed practical. But the academic economists that Shiller is so down on, you know, the types who "concentrate on advancing economic theory and statistics" -- the people who use the theory and numbers stuff that failed so badly in the election (not)  -- were warning against debt reduction. But the practical types from the Clinton administration were having none of this "the economy needs more help, not budget cuts" kind of talk. Flying by the seat of their practicality and their political instincts, they knew better. What a big mistake that turned out to be. Practical is fine, and it's good to get things done, but it needs to be the right things, not just what is possible.

    Posted by on Sunday, November 11, 2012 at 09:53 AM in Economics, Politics | Permalink  Comments (20)


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