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Friday, August 28, 2015

Paul Krugman: Crash-Test Dummies as Republican Candidates for President

It's a good thing Republicans, at least in theory, take a hands off approach when it comes to the economy (they actually don't, but let's pretend) because they "haven't a clue":

Crash-Test Dummies as Republican Candidates for President, by Paul Krugman, Commentary, NY Times: Will China’s stock crash trigger another global financial crisis? Probably not. Still,... this is a test:  How would the men and women who would be president respond if crisis struck on their watch?
And the answer, on the Republican side at least, seems to be: with bluster and China-bashing. Nowhere is there a hint that any of the G.O.P. candidates understand the problem, or the steps that might be needed if the world economy hits another pothole.
Take, for example, Scott Walker... So what was his suggestion to President Obama? Why, cancel the planned visit to America by Xi Jinping, China’s leader. That would fix things!
Then there’s Donald Trump,... he simply declared that U.S. markets seem troubled because Mr. Obama has let China “dictate the agenda.” What does that mean? I haven’t a clue — but neither does he.
 ...According to Mr. Christie, the reason U.S. markets were roiled ... was U.S. budget deficits, which he claims have put us in debt to the Chinese and hence made us vulnerable to their troubles. ... Did the U.S. market plunge because Chinese investors were cutting off credit? Well, no. ...
In fact, talking nonsense about economic crises is essentially a job requirement for anyone hoping to get the Republican presidential nomination.
To understand why, you need to go back to the politics of 2009, when the new Obama administration was trying to cope with the most terrifying crisis since the 1930s. ...Republicans, across the board, predicted disaster. ...
None of it happened. ... Instead, the party’s leading figures kept talking, year after year, as if the disasters they had predicted were actually happening.
Now we’ve had a reminder that something like that last crisis could happen again — which means that we might need a repeat of the policies that helped limit the damage last time. But no Republican dares suggest such a thing.
Instead, even the supposedly sensible candidates call for destructive policies. Thus John Kasich is being portrayed as a different kind of Republican because as governor he approved Medicaid expansion in Ohio, but his signature initiative is a call for a balanced-budget amendment, which would cripple policy in a crisis.
The point is that one side of the political aisle has been utterly determined to learn nothing from the economic experiences of recent years. If one of these candidates ends up in the hot seat the next time crisis strikes, we should be very, very afraid.

    Posted by on Friday, August 28, 2015 at 09:02 AM in Economics, Financial System, Politics | Permalink  Comments (13)


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