Brad DeLong gets it. He’s looking at a quote from the upcoming Michael Grunwald book about the early years of the Obama presidency, with the president saying “Look, I get the Keynesian thing. But it’s not where the electorate is.” DeLong:
If Obama does not understand that his job is not to please the electorate by indulging its prejudices but rather to manage the path to a strong economy, he needs to be told what his job is every hour of every day until he does understand that.
That’s exactly right, and it’s especially true within the first couple years of the administration, when politically the goal has to be to build the best possible economy for re-election.
Right now, Obama can say any economically illiterate thing he wants, and as long as it doesn’t cause the Euro Zone to implode somehow, it probably doesn’t matter at all.
I will say one thing in potential defense of Obama…Politico has this quote in the context of the staff wanting Obama to make stimulus speeches. It’s not crazy for Obama, in that context, to take into account what he talks about in public, as long as it doesn’t prevent him from continuing to do the right thing on policy. I think it’s highly unlikely that Obama could generated massive support for Keynesian policies by giving the correct speeches.
On the other hand, I do think that there are two groups who probably could have used additional education in 2009 who might have been receptive to a White House message that was never as clear as it could have been: Democratic opinion leaders, and elite journalists and pundits. Obama might have fully understood “the Keynesian thing,” but I think there’s pretty good evidence that quite a few “neutral” pundits who were inclined to at least give the new president a chance really didn’t understand basic Keynesian concepts. In particular, I suspect that a lot of people really didn’t know that there were sound, boring, reasons fully supported by mainstream economics for running very large short-term budget deficits. And I suspect that that group includes quite a few Democratic Members of Congress.
I’ve also increasingly come around to the idea that the original stimulus probably should have included built-in triggers that would have automatically increased spending (and perhaps tax cuts) based on economic indicators, perhaps along with other triggers to shut things down if the economy was recovering. Perhaps Olympia Snowe and the Benator wouldn’t have gone for that, either, but I’d like to know whether anyone thought about trying it.
[Cross-posted at A plain blog about politics]