Sunday, July 8, 2012
Sunday Question for Conservatives
Liberals have been bashing Mitt Romney and Republicans for some time for having no specific economic program tailored to current conditions -- Romney does have an economic program (free trade agreements, low taxes, etc.), but none of it, liberals say, is anything different than what Romney would be advocating if unemployment was a 5%. What about that? Do you think government policy should react to current conditions (as liberals certainly do, at least in part), or is the current conservative position that there's a set of objectively good policies regardless of current context, and the best thing to do is to attempt to implement those policies whenever you can?
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I think with 8.2% unemployment you cut government spending more slowly than with 5% unemployment, or simply freeze it and wait to make cuts until unemployment is lower. I think immigration should be more restrictive with high unemployment, limited to those fields of endeavor where unemployment is quite low. But overall, conservative economic policy does not change drastically with the unemployment rate; it is the FOMC whose monetary policy needs to be adjusted for higher unemployment, and they have been doing that for the past four years.
ReplyDeleteHe has called for tougher actions against China including labeling them a currency manipulator. I think legal immigration should reduced when unemployment is high. As long as unemployment is high and interest rates are low spending on infrastructure makes sense.
ReplyDeleteI agree with those calling for more monetary easing, even at the risk of higher inflation, to reduce the value of debt that is depressing consumers and to make exports more competitive. This is a minority opinion on the right. Most conservatives thinking was set in 1980.
The recession isn’t a problem to be solved, it’s a problem being solved (at least if we let it) -- ie, the malinvestments of the bubble are resetting themselves to new priorities based on what we truly value and can actually afford. Stimulus will only prevent this corrective action by trying to continue and replace the gonzo consumerism that got us into trouble to begin with.
ReplyDeleteAlong the lines of this thinking, Republicans are likely to support a more stable Fed policy. John Taylor is viewed as a likely Romney pick to succeed Bernanke. Here’s an article in which he outlines the less simulative Fed policies he’d like to see implemented: http://www.stanford.edu/~johntayl/2012_pdfs/The_Dangers_of_an_Interventionist_Fed_WSJ-3-29-12.pdf
Managing the economy to respond to each crisis makes for bad policy. As Taylor suggests, it was Greenspan’s foolish response to 9/11 and the burst of the tech bubble that led us right into the housing bubble.
I'll have to disagree with Anon and Mercer on immigration. Legal immigration is always a good thing -- even in bad times, it introduces dynamism into our economy.
ReplyDeleteMy favorite quote on immigration comes from 1819. At a time of high unemployment and anti-immigrant sentiment, John Quincy Adams (as secretary of state), stated what was essentially an open-borders immigration policy:
"The American Republic invites nobody to come. We will keep out nobody. Arrivals will suffer no disadvantages as aliens. But they can expect no advantages either. Native-born and foreign-born face equal opportunities. What happens to them depends entirely on their individual ability and exertions, and on good fortune."
I think this statement still reflects what most immigrants truly want, yet it’s striking how far both parties have strayed from our founding ideal.
Couves,
ReplyDeleteYour J Q Adams quote is out of date. A Latino immigrant is favored by the "diversity" policies of colleges and many employers over native born whites and Asian Americans.
Mercer, I agree. That's why I said we've strayed far from the Founding ideal.
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