Friday, August 14, 2009

Rematch Tuesday 8/18: Mulligan vs Reich

On the Kudlow Report, 7pm Eastern time (our part is not until 740p). Topic: should there be a second stimulus?

Due to last Monday's appearance, my element of surprise is largely gone.

Commenters: What do you think former Secretary Reich will say, now that he saw me on Monday?



nick said...

You come across great on TV. I thought your opening a bit weak because your metaphor was too long--if you're going to use irony on TV, it's got to be kept to a few words and hit us between the eyes. You need to hit Reich harder. For example, tell him FDR's policies not only failed to get us out of the depression but kept us in a depression that should have ended in a couple of years at most like every other economic downturn in our history. We didn't get out of the depression until after WWII, i.e., FDR had to die first, since the high employment and industrial production during the war was due to conscription and industrial coercion (even if in a good cause), not a natural return to full employment of resources. Also, there's a lot about Reich in the public record since he served under Clinton and he subscribes to every liberal nostrum there is. Whack him on some of those as the topics come up (min wage, industrial policy, etc.)

nick said...

As to what Reich will say: he'll give all the credit for the recent good news to the Obama admin and the stimulus. Then he'll say unemployment's still too high so we need more stimulus. He might say the cash for clunkers program is an example of how great a gov't spending program can be. Also at some point he'll want to tell the audience that the crisis was caused by the heartless Republican type of approach you're espousing, so you'll need to be ready for that (e.g., it was the CRA under Clinton that pressured banks to junk traditional lending standards--home ownership soared from '94 to 2003 or so; Freddie and Fannie are creatures of FDR and Lyndon Johnson; the hardest-hit sector, banking, is one of the most regulated in the country, so no, it wasn't "deregulation" that did it). Also, Congress was Democratic, and its leaders refused to rein in the GSE's when Bush asked them to.
Good luck!

Darth Vader said...

Yeah, I mean I have trouble with coming up with any arguments for another stimulus. I think he will try to claim that the government spending has kept us out of another Depression, and since we are not out of recession yet, and since the spending has worked so well we need another injection into the economy to return us to a healthy growth. He might claim that it is what got us out of Depression, which you should counter with Romer's research that showed that FED's fight against deflation was what got us out of it. If I were you I would approach the debate in a systematic way.

1) Deficits are very, very high by historical standards and the last thing we need is another deepening of them by several hundred billion dollars.

a) Debt is gonna be 100% of the GDP under current spending, and adding more will only make it worse.

b) We cannot do the same thing we did in WWII, because on top of this we have SS and Medicare deficits coming up, which will prevent us from servicing high debt. The aging of the babyboomers will make next several decades much more difficult than the decades after the WWII were making the fiscal control much more important. (If he pulls healthcare proposals for cost cutting on you, just cite CBO's projections which show it to be complete nonsense). By pushing for ever more debt, the democrats are endengering the stability of the dollar and running the risk of government bancruptcy.

2) Spending is slow and wasteful.

a)We only spent like 70 billion of the first one up until now and designing the new one will take few months, so the spending of the new one wouldn't happen until like the summer of the next year, and that would be again only like 10% of it, just as it was now. By all projections we seem to be getting out of recession, so it is unclear what will the new stimulus do, other than add more to our exploding debt.

b) Spending is wasteful and always ends up being filled with useless crap under the pressure of special interest. Cite some true gems from the last stimulus package. here are some suggestions: 246 million tax break for Hollywood movie executives, turtle tunnel in Florida.

c) Tax breaks won't do anything...Just the standard permanent income hypothesis argument. Oh and don't spend too much time on metaphors...Don't become another Austan Goolsbee. Just stick to Friedman's mode of debating...go for the arguments in a clear way that destroys them and that is understandable to everyone.

And one last suggestion. You should try to make your blog a bit more friendly for people not quite interested in all the little inticancies of the macroeconomic indicators. I think that adding some more stuff on general topics like healthcare, taxes and linking to any interesting texts that you yourself read during the day would increase the popularity of your blog. Trading some of the quality of your blog for much more popularity would be helpful. Also, pick a fight with people like DeLong and Krugman and nail them whenever they say something stupid. DeLong called you an idiot...Don't let stuff like that just go unoposed. It is a great thing that you got on Kudlow...try some other shows as well. Go talk on GlennBeck show or some other conservative talk show and try to get more traction. You are an excellent economist and it is great that you try to go out there and counter this populist mania. What is quite disheartening is the fact that many of your colleagues choose to stay out of the general discussion, at the time when we need their voices the most. Good luck, and sorry for a lenghty comment.

Unknown said...

Let's not give Prof. Mulligan our thoughts in this public forum... Keynesians are wrong when it comes to spending, but they're smart enough to read up and prepare some sort of witty comeback if they read Prof. Mulligan's ideas beforehand.