Alan Blinder Again

 

Alan Blinder (Princeton economics)* never gives up. He used to be a moderate -- that is, while he might have tended to the liberal side of macroeconomics, he was a good economist. One with a more conservative macro bent might disagree with Blinder, but finding the holes in his arguments was never easy. It was always very challenging to disagree with him.

But now, Blinder has crossed over to the far left side of the river and he makes it too easy to dismiss his articles. Since he is a famous Princeton economist, his words are published by the best periodicals. This time it was his nemesis the Wall Street Journal that published him. Why would they publish him? The New York Times yes. But the Wall Street Journal. Why? 

He is supposed to be an intelligent economist, yet he continues to spread the big lie that it will cost nothing to pass the latest liberal spending and taxation bonanza. You would think that he is on the Democratic Party payroll. Or maybe he is running for office with Biden. I have no idea why he writes this stuff. 

Since when do economists say that things cost nothing? One of the biggest increases in spending ever yes, but he says it will cost nothing. How can you say that? Trillions of dollars of spending will appear out of a hat? Of course it will cost something. 

Since when are higher taxes neutral to the economy? He admits that corporations and the rich will pay for all those trillions in extra spending. Okay, he doesn't like those folks and loves to add to their tax bills. But are those people so dumb that they will send the extra trillions to the government and not change any of their behaviors? Will firms continue to hire? Will they continue to expand their spending on equipment and other capital? Will they give the workforce a big pay increase? Or will they maybe find clever ways to not pay this huge tax bill? 

What macro course does Blinder teach at Princeton where he tells the students that you can raise taxes by trillions of dollars to afford that much more spending and it will have no impacts? In what economics course does he teach students that extra spending is free? I never taught those ideas but then I am not a rich and famous economist from the Ivy League. 

Okay put aside the free idea. What about his total acceptance that the extra government spending will be done wisely and will result in society's ills being addressed and solved? Sure it's a lot of money he admits, but in a few years from now we will have solved poverty, invested in a huge defense buildup to scare Russia and China, solved the puzzle of productivity, increased employment while reducing inflation, and basically solved all of our problems. 

If you believe all that, I have a very nice 2014 Hyundai Santa Fe I am willing to sell you. Those and other problems have been persistently stubborn over the decades. Have we really figured out how to solve problems associated with income inequality? Trust Alan Blinder -- this time, if you give Washington DC enough money, they will finally put all these negative trends to rest. Hurrah Alan. 

I hate to sound so mean and small. But this guy is whistling his way to the bank. I hate to spend our precious time even bringing up these points. But you gotta do what you gotta do. Folks, it has always made sense to watch your spending and debt. Nothing has changed. 

Read his article if you think I am exaggerating.  

* https://www.wsj.com/articles/look-at-build-back-betters-benefits-not-price-tag-federal-budget-bbb-reconciliation-debt-cbo-11638718325?mod=opinion_major_pos4