Tyler Cowen's Column, Again
In a comment on my post, Cowen wrote,
I definitely agree we are spending and borrowing too much and I have argued that repeatedly in a variety of forums, though that is not my intent in this particular column.
To me, it appears that he was trying to engage with the left by pretending to believe otherwise. I read the column as strongly implying that macroeconomic outcomes would be better if government were spending and borrowing more.
In my opinion, pretending you agree with people on an issue on which you disagree with them is as demeaning as dismissing them out of hand. Either way, you are treating them as if they are unable to deal in reasoned argument.
I think that social trust matters. I agree with Tyler that the high trust levels in Scandinavian countries give them more degrees of freedom to enact policies that work as intended. That is a very important point, and Tyler could write an excellent column (or even an ebook) spelling it out.
However, I do not blame the poor results of President Obama’s economic policies on lack of trust. The policies that were enacted when Democrats were in control of the House failed because they were wrong-headed, not because of a lack of trust. I understand that there is an alternative narrative in which the situation was worse than President Obama thought, and then the public stupidly voted in a Republican majority in the House in 2010, so nothing else could be done. But I do not see that narrative as having any merit beyond serving as a comforting bedtime story for those on the left.
My narrative would be closer to that of Walter Russell Mead. I view the left as tapped out, both intellectually and financially. They do not have the money to sustain their big projects (government health care, European integration). They do not have the intellectual fortitude to confront the problems inherent in, say, public sector unions, unfunded public sector liabilities, attempting to manage health care resources using government boards, or attempting to address inequality of economic outcomes by increasing the concentration of political power.
Given that I view the left as tapped out, I might as well say so. Not because I think it will change someone’s mind, but because I think it is more respectful to be above-board about what I think.
[UPDATE: Given Tyler’s comment on the previous post and on this one, I should concede that he did not intend to imply support for expansionary fiscal policy.
On a substantive point, I agree that public opposition to inflationary monetary policy is a factor. But is that anything new? It seems to me that since the 1960s elite economists have been periodically saying that it would be better to live with higher inflation and the public has been saying, “No!” The public opposition predates recent developments, either in terms of the recession or in terms of declining trust.]