Norm Coleman: Neo-Hooverite
The incumbent in Minnesota has some very odd ideas about the economy:
“I would be very cautious if a stimulus plan becomes another excuse to simply spending more dollars,” the Republican senator said in an interview after a campaign rally Tuesday in Bemidji.
A stimulus plan is not an excuse, it’s an effort to prevent the country from sliding into an extremely deep recession. The evidence suggests that the most effective forms of stimulus are spending-side stimulus. But irrespective of that, the very meaning of fiscal stimulus is that you increase the gap between spending and revenue. Coleman prefers a neo-Hooverite approach of austerity budgeting:
Coleman’s recovery plan includes enforcing spending caps, freezing congressional pay, enforcing pay-go where new spending must be accompanied by like spending cuts, require the president to submit spending cuts to Congress, giving the president line-item veto authority, closing the tax gap of unpaid taxes, closing tax loopholes, making sure Social Security and Medicare are solvent in the future.
Some of these are okay idea for the long-run, others are priorities I disagree with, but in terms of short-run recovery all of them — up to and including gimmicky ideas like freezing congressional pay — would be counterproductive. Like Saxby Chambliss, maybe he can get Ben Bernanke to explain the basics of fiscal policy to him.
29 Responses to “Norm Coleman: Neo-Hooverite”
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October 22nd, 2008 at 12:25 pm
Can’t you find other pictures of Hoover? That one is starting to creep me out.
Maybe even a picture of a vacuum cleaner or something
October 22nd, 2008 at 12:28 pm
Norm Coleman is a deeply stupid person. I really want him to lose, if only because he’s so stupid. He’s also kind of a douche-bag. Also, Al Franken wrote some of the funniest live comedy sketches ever. And that has to count for something.
October 22nd, 2008 at 12:30 pm
Closing tax loopholes. Sure, I can see an overhaul of the tax code getting enacted that works to the detriment of thousands of corporate bottom lines. Then again, wouldn’t paying your fair share of taxes be the patriotic thing to do in a time of severe stress to the national economy? Nah, that’s for socialists. Sorry Norm, the loopholes stay.
October 22nd, 2008 at 12:37 pm
What part of “unconstitutional” don’t these people understand? The line-item veto has already been struck down by the Supreme Court. And only 10 years ago, so it’s not like you have to be some deeply obsessive U.S. history nerd to know about it.
Maybe Coleman and McCain should ask Rudy Giuliani about the feasibility/advisability of the line-item veto, since Rudy was the one who brought the case against President Clinton.
October 22nd, 2008 at 12:44 pm
Would someone please explain to me why a stimulus package, such as US Government sending every taxpayer a check for $600, is so good versus say exempting income below level X from FICA taxes (where X is set to that everyone pays $600 less in FICA taxes) seems to get no attention.
I guess the general point I am asking aboput is why is a government payment presented as more of a stimulus than a very broad-based and egalitarian tax cut like the one above, which basically would eliminate the first $600 of FICA taxes for everyone.
October 22nd, 2008 at 1:12 pm
Coleman isn’t the most conservative republican Senator, and probably not quite the most corrupt or the most dishonest, but I swear he’s the creepiest-looking one. He looks like the pimp slinking in the background of a noir crime film, sort of a nastier-looking Peter Lorre. The unobtrusive guy who, in the end, turns out to be the real villain after all.
October 22nd, 2008 at 1:20 pm
Gene,
If I understand correctly, those are in fact basically the same thing–assuming the government tops off the funding to Social Security and Medicare to compensate, of course.
The problem is that isn’t the most efficient way to go about a stimulus, regardless of how you characterize it. Rather, for an effective stimulus you want to make sure the money is consumed, and there is a good chance a lot of the money sent out in that fashion will not be consumed (e.g., it might be used to instead retire debt).
Conversely, that is why something like food stamps provide the best stimulus–that goes straight to consumption. And almost as good are unemployment benefits, because again most of that goes to consumption. Or direct government spending. Again, the key is immediate consumption.
October 22nd, 2008 at 1:30 pm
Keynes’ example of stimulus at the basest level was burying money and paying people to find it and dig it up.
A stimulus that doesn’t involve spending money is like a marriage that doesn’t involve fucking (or living with) your spouse. Oh, we’re talking about Norm Coleman here, aren’t we?
October 22nd, 2008 at 2:44 pm
Matt, I thought you’d like this little bio of Hoover, just to complicate things.
http://www.tnr.com/politics/story.html?id=72e638ce-e806-4bce-a7d9-3b9c6ef06802
October 22nd, 2008 at 3:08 pm
I’d be more than willing to see Norm Coleman help give President Obama line-item veto power.
October 22nd, 2008 at 3:17 pm
Serial “stimulus packages” and bailouts marked Japan’s unsuccessful attempts at pulling itself out of its real estate/stock market collapse. And they had advantages we don’t have like a balance of trade surplus.
GOPers would welcome a bankrupt government, but “progressives” ought to care more about D.C’s slide into a deeper debt hole. There are plenty of ways to help the economy without going deeper into debt. Here’s one: a stiff gas tax which would discourage consumption of oil, most of which is imported at a cost of $$$ and jobs.
October 22nd, 2008 at 3:59 pm
Matt -
Since I’m an adult who’s been forced to move in with my parents for a trip back to university, I can tell you that Neo-Hooverism is quite popular amongst the mindless, Fox News, Republican contingent. The parents who managed to raise an intellectually curious daughter will have nothing of the talk about Neo-Hooverism at the dinner table since gov’t spending during a recession seems [to them] to throw out the idea of fiscal responsibility from the outset. I even printed the Washington Times article you linked to the other day going “SEE! From Right-leaning newspaper, not in op-ed section!!” Yeah, that didn’t work.
The notion that gov’t spending can actually stimulate macroeconomic growth seems to them to be some type of made up BS that couldn’t possibly be anything other than partisan hack-type blather. Watch Neil Cavuto sometime if you can stomach it. It’s a f’in epidemic over there. You wonder if any of them ever took Intro to Macroeconomics. Presumably, they did. But jeez… I guess they are Revisionist Economists or something.
October 22nd, 2008 at 5:38 pm
Rather, for an effective stimulus you want to make sure the money is consumed, and there is a good chance a lot of the money sent out in that fashion will not be consumed (e.g., it might be used to instead retire debt).
Considering how many people may be defaulting on their debts of one sort or other, and considering how much trouble banks are apparently having finding capital, why would retiring debt not help the economy?
And why would consuming money help the economy? Is the economic problem that we are producing way too many goods and services and siply have nowhere to put them?
Does anyone here understand how ridiculous this is?
Keynes’ example of stimulus at the basest level was burying money and paying people to find it and dig it up.
How the Hell will that stimulate the economy? You are not producing anything. You are wasting time and effort. Yet, somehow you think that giving people make-work job that produce nothing will somehow make the economy better.
The notion that gov’t spending can actually stimulate macroeconomic growth seems to them to be some type of made up BS that couldn’t possibly be anything other than partisan hack-type blather.
When the idea is that you can stimulate the economy by paying people to do unproductive work, yes, it is blather.
The problem with Keynesians is that they sem to think (a) money is a good that has economic value in and of itself, rather than a medium of exchange, and (b) they seem to feel that working is in itself an economically productive activity, whether or not the work produces anything that anyone wants.
Keynesians think that a factory that runs all day but that produces nothing because it does not have the raw materials it needs is more beneficial than one that sits idle. They think that someone digging a ditch and then filling it up is more economically beneficial than doing nothing.
Matt and his colleagus accuse so-called “neo-Hooverites” of not understanding economics. I think that most economists do not understand reality.
October 22nd, 2008 at 5:39 pm
And please, please, why do we continue with the lie that Hoover didn’t try deficit spending, interest rate cuts, and the like to stimulate the economy. He tried it all, and it all failed.
October 23rd, 2008 at 8:34 am
Because being dragged kicking and screaming into enacting the tepid Emergency Relief and Construction Act in 1932, after spending years seeking voluntary measures from big businesses, doesn’t really count as “trying it all.” Nor does imposing a tax on bank checks particularly qualify as Keynsian, given that it contracts the money supply. See, outside of schmibertarian fuckwit land, what matters is how things are enacted, not just that they’re “statist” or involve “deficit spending.”
October 23rd, 2008 at 8:41 am
As early as 1929 and 1930, the Federal Reserve cut interest rates from 6% to 2%. This is clearly not “liquidationism.” Granted, it was a Friedmanite move rather than a Keynesian one, but it was not an attempt to let the economy liquidate bad investments.
There was deficit spending a year earlier – 1931.
See, outside of schmibertarian fuckwit land, what matters is how things are enacted, not just that they’re “statist” or involve “deficit spending.”
Let me ask you something – do you believe that employing people in unproductive projects like digging a ditch and then filling it back in stimulates the economy? That’s the most ridiculous economic idea I have ever heard, and it is why Keynesianism to me ranks way up there with perpetual motion machines in the realm of ideas.
October 23rd, 2008 at 11:25 am
Oh, zing! Why, it’s almost as if the comment you’re responding to didn’t include the line:
Yglesias and Company have had posts up analyzing the relative stimulative effects of various types of federal spending. There are a few polysyllabic words, but if you try really hard, you might be able to digest them. Here’s a slightly restated hint: It matters what the deficit spending is spent on.
Let me ask you something – when has this ever been official US government policy for implementing Keynsianism? Oddly enough, I’m not finding that mandate in either the paltry last-minute RFC or the WPA. Now, looking at modern Republican governance, I’m prepared to acknowledge hostility to keeping up public infrastructure, but that’s not quite the same thing.
And if you can’t figure out why the existence of vast numbers of unemployed people might have an effect on how stimulated the economy is, I’m sorry. Though perhaps I’m misreading you, and you advocate more direct government assistance to the unemployed without a mandated work component. (Must… keep… straight… face…) But without a work component they’re parasites and welfare queens. Gosh, schmibertarian fuckwits are so hard to please.
October 23rd, 2008 at 7:57 pm
mds – If you want to argue for government stimulating the economy by investing in improvements on the basis that those investments will produce something worthwhile, I think that that is a reasonable argument. But my point is that the stimulating effects come from what is produced, not from the jobs created producing it.
And if you can’t figure out why the existence of vast numbers of unemployed people might have an effect on how stimulated the economy is, I’m sorry.
Unemployed or employed doing work for the sake of doing work, it’s the same thing. To the extent that a government wants stimulus, the stimulus is based on what is produced, not on the jobs created.
Though perhaps I’m misreading you, and you advocate more direct government assistance to the unemployed without a mandated work component.
If the mandated work component is something productive, then fine. If it isn’t, then employing people in make-work programs is simply charity, but with a work component to prevent them from being idle. If the goal is to give charity, then fine, that’s a reasonable way to try and achieve the goal. (I’m not saying I would necessarily support it, but it is not an unreasonable idea). But it won’t stimulate the economy.
Here’s a slightly restated hint: It matters what the deficit spending is spent on.
I agree with that. But my point is, that you should focus on what it is being spent on as the economic stimulus, not on the jobs created. Because ultimately it is what you create that has a stimulating effect.
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