Is Republican Economic Policy Devious, or Just Wrong?
Are the Republicans deliberately hurting the economy to hamper President Obama's chances of reelection, or are they just doing it because of misbegotten ideas?
Daniel Altman is Big Think's Chief Economist and an adjunct faculty member at New York University's Stern School of Business. Daniel wrote economic commentary for The Economist, The New York Times, and The International Herald Tribune before founding North Yard Economics, a non-profit consulting firm serving developing countries, in 2008. In between, he served as an economic advisor in the British government and wrote four books, most recently Outrageous Fortunes: The Twelve Surprising Trends That Will Reshape the Global Economy.
What do you do when there are two perfectly consistent explanations for an economic phenomenon? Economists call this situation "observational equivalence", and it runs as an undercurrent through my new eBook, available free of charge this week. For me, the question is about the actions of the Republicans in Congress: are they deliberately trying to sabotage the economy, or are they doing it by mistake?
Sabotage is certainly occurring, whether inadvertent or otherwise. The Republicans' anti-stimulus posture, their willingness to manufacture a crisis, and their bullying of the Federal Reserve have combined to hamstring economic policy at Americans' greatest moment of need. Without the uncertainty and headwinds created by the Republicans in Congress, the economy would surely be growing more quickly today.
But are they doing it on purpose? They certainly have a strong motive. If the economy continues to struggle, then President Barack Obama's chances of reelection will undoubtedly suffer. And as Mitch McConnell, the Republicans' leader in the Senate, famously said, the party's top goal after the 2010 elections has been to defeat the president - not to help the economy recover. Indeed, every time the economy gets a bloody nose, the president gets a black eye.
That's not the only explanation, though. The Republicans might simply be acting on the tenets of a mistaken economic policy. As I've written, Republican economic philosophy today seems to be based on five myths. As a result, letting them control economic policy is a bit like letting a flat-earther drive an airplane to China.
So which is it - are the Republicans deliberately hurting the economy, or are they just doing it because of misbegotten ideas? If it's the former, then they are the worst kind of cynical politicians, putting their own ambitions above the wellbeing of the American people. If it's the latter, then their incompetence presents a clear danger to our future. Either way, they shouldn't be given any responsibility for the economy, as this little furry creature can tell you.
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