Voodoo economics, the KGB on Fleet Street, the case for charter schools, and other observations
With a salute (for borrowing his catch-phrase) to the late, great New York newspaper columnist Jimmy Cannon: nobody asked me, but…
WHICH WOULD BE MORE EFFECTIVE IN STIMULATING THE U.S. ECONOMY: PUBLIC SPENDING OR TAX CUTS? The sad truth is that America’s leading economists can’t agree on an answer. This confusion raises the question: does economic theory fall in the category of science (albeit social science), or should it more properly be categorized along with softer disciplines like music, art, and literature?
Take something basic: the multiplier effect. There’s not even agreement among economists about the relative impact on the nation’s GDP by the two approaches. Harvard’s N. Gregory Mankiw has suggested that tax cuts might stimulate the economy through the multiplier effect more significantly than government expenditures in a recent New York Times piece (“Is Government Spending Too Easy an Answer?”)
Mankiw explained that economist Valerie A. Ramey has estimated that “each dollar of government spending increases the G.D.P. by only 1.4 dollars.” Mankiw added:
A recent study by Christina D. Romer and David H. Romer, then economists at the University of California, Berkeley, finds that a dollar of tax cuts raises the G.D.P. by about $3. According to the Romers, the multiplier for tax cuts is more than twice what Professor Ramey finds for spending increases.
Princeton’s Paul Krugman, perhaps the leading exponent of massive federal spending among economists, disagrees with Mankiw, and made this claim in his New York Times column:
Meanwhile, it’s clear that when it comes to economic stimulus, public spending provides much more bang for the buck than tax cuts — and therefore costs less per job created (see the previous fraudulent argument) — because a large fraction of any tax cut will simply be saved.
This suggests that public spending rather than tax cuts should be the core of any stimulus plan. But rather than accept that implication, conservatives take refuge in a nonsensical argument against public spending in general.
So what are we to believe about the multiplier effect? Do tax cuts generate three times the benefit of public spending? Is the dismal science a science? If Ivy League economists can’t agree on the facts, it’s no wonder that policy makers look to split the difference (which explains why the stimulus package has both tax cuts and spending). Voodoo economics, anyone?
AND WHILE WE’RE SPLURGING, WHY NOT A REVIVED SPACE PROGRAM? A very strong argument can be made that the space race of the 1960s—and the corresponding perfection of the microchip and other innovative technologies—sparked the American economy in the decades that followed.
So why not a revival of NASA? I’d wager that innovations in battery storage and power, a key to moving towards green electric cars, will come faster from aerospace engineers than from the automakers.
DID ADVOCATES OF GLOBALISM EVER IMAGINE A FORMER KGB AGENT OWNING A LONDON NEWSPAPER? Born-again capitalist and Russian oligarch Aleksandr Y. Lebedev is buying a majority stake in The Evening Standard. Lebedev served as a KGB agent in London during the Cold War and, a self-professed Anglophile, claims to love James Bond, Winston Churchill, Oliver Cromwell, and Margaret Thatcher. File under: stranger than fiction.
WILL THE UNITED STATES BECOME THE 21ST CENTURY MODEL FOR A MULTI-RACIAL SOCIETY? It’s not just the election of Barack Obama, a biracial man of African and European background, to the presidency, that suggests we are moving closer to that reality. The fact that an African-American rock singer, Darius Rucker (best known as the leader singer for Hootie and the Blowfish), has been so quickly and warmly embraced by country music fans, who are predominately white, reflects the tectonic shifts in race relations underway. Rucker is the first African-American artist in 25 years (since the trailblazer Charley Pride) with a No. 1 hit on the country charts.
THE CASE FOR CHARTER SCHOOLS BECOMES MORE COMPELLING AS STUDIES OF their performance in troubled urban school districts become available. As columnist Scot Lehigh of the Boston Globe notes about results from the public schools in Boston: “Compared with students in traditional schools, charter school students are doing significantly better in math and English, according to the analysis by researchers from Harvard and MIT.”
Will President Obama and new Education Secretary Arne Duncan heed the calls for support of charter schools from educators and community activists like Joel I. Klein and Al Sharpton and education reformers like Knowledge Is Power Program’s Mike Feinberg and David Levin. Will Obama follow through on his campaign pledge to double federal funding for charters? Or will they fold under pressure from teachers unions, which oppose the expansion of charters, because these schools often dispense with union rules?
FOR THOSE WHO APPRECIATE THE ARTISTIC ASPECTS OF BASKETBALL, RAY ALLEN OF THE BOSTON CELTICS NEVER DISAPPOINTS. Allen’s graceful team play and long-range shooting touch make him an obvious choice for the NBA All Star team. His approach to the game isn’t flashy, just incredibly effective.
THIS MONTH’S WORDS OF WISDOM FROM AUTHOR AND POET RUDYARD KIPLING (1865-1936): “If history were taught in the form of stories, it would never be forgotten.”