Writing about the current economic crisis is rather like writing on water, but as the poet Keats liked to say, “What the fuck?” Since I’ve been linking to Greg Mankiw’s site in the past, mostly with praise, I’d like to bitch a little about what I haven’t liked from Greg.
Last week Greg labeled as a “good read” this article in the Wall Street Journal by Andrew G. Biggs and Kent Smetters, a couple of jive-ass turkeys from the American Enterprise Institute, “explaining” why John McCain’s tax proposals, while drastically cutting taxes on the talented tenth and the talented oneth of American taxpayers, who suck up an ungodly share of the nation’s total wealth and cough up an almost-godly share of U.S. taxes in return, would actually cause these folks to pay an even greater share of taxes.
Whence such alchemy? Well, Andy and Kent make a variety of tricky assumptions, like claiming that rich people pay corporate taxes, which of course they don’t, but mostly (I guess) they assume, without actually saying so, that McCain’s tax cuts would cause a HUGE increase in the nation’s economy and that (this is particularly the part they don’t want to talk about), a totally, and I mean totally, ungodly chunk of the new cash would go to the talented tenth, so that their share of the nation’s wealth would be massively larger than it is today, if you can imagine such a thing, so that, even though their tax rates would be much lower, they would be paying an even larger share of the nation’s taxes.
This is, basically, mendacious crap. But wait. There’s more! Greg also links to this piece by UCLA economics dude Lee E. Ohanian, also in the Wall Street Journal (why am I not surprised?), feeding us the now-standard right-wing line that it was the bad policies of both Herbert Hoover and FDR that caused the Great Depression and that the great secret to prosperity is to do nothing.
Why does Greg link to this shit? If he really believed that governments should not intervene, he would have 1) loudly opposed the Bear-Stearns bailout, 2) loudly opposed the AIG bailout, and 3) very loudly opposed the Sec. Paulson’s $700 billion mother of all bailouts. Instead, we get his “Hank Paulson is a very smart man and he knows a lot more about this than I do” rap.
In part, it’s surely a simple matter of AAK—Automatic Ass-Kissing. If you’re going to be a somebody in the Big World, when somebody important asks you to do a trivial favor—“Greg, here’s something I think your readers might enjoy”—you do it. It’s bread cast upon the waters, right?
A bigger issue is that so many economists (all of them?) feel that civilians simply can’t understand the truth. I’m guessing that what Greg really thinks is that governments shouldn’t try to run markets, but that, unfortunately, markets have fucked themselves up so thoroughly that only the government has the cash to bail things out. So it’s right that private concerns should get government cash, but there should be no government control.
Well, that’s sort of my position too. But I don’t link to liars like Biggs, Smetters, and Ohanian.*
*I’d say that that’s why I don’t teach at Harvard, but, unfortunately, that would be a lie.
