Friday, 17 April 2009

Mankiw: a Cowen follower?

Fun from Salon today: a listing of the most strident critics of Obama's economic policy. #2, Greg Mankiw:
GREG MANKIW: Professor of economics at Harvard University; former chairman of President Bush's Council of Economic Advisers; visiting fellow at the American Enterprise Institute

Earliest critique: Pre-inauguration, in the New York Times, Jan. 11, 2009

In the econoblogosphere, Mankiw plays a role for conservatives analogous to what Paul Krugman provides for the left, albeit without the passion.

Stimulus: Mankiw is skeptical of fiscal policy, believing that tax cuts, as opposed to spending, should be the fiscal instruments of choice. He also fears the rise of protectionism that the Buy American stimulus provisions threaten.

Banking plan: Mankiw's bottom line: The banks need to suffer more. Specifically, he follows the influential libertarian economist Tyler Cowen's argument (recently featured in the New York Times) that banking creditors need to accept losses on their bad bets.

Most hurtful quote: "[T]he borrowing and debt imposed on future generations will not be very different [from Bush], at least if the numbers in the Obama administration’s own budget document can be trusted."

Fortunately, there's an expert for everyone here. Whether you think the stimulus is far too small or unlikely to be effective regardless of size, whether it has too many tax cuts or too few, whether you think the banks should be made to suffer their losses, be nationalized, or that they have effectively taken over the Obama administration, there's somebody here you can pick who'll agree with you.

One who didn't make the list: Robert Higgs. How does Higgs model central bankers so well? He thinks of a normal banker, then takes away reason and accountability.

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