The Last Man Standing

Bruce Krasting has a good pickup from the weekend talking heads show. The “last man standing” of President Obama’s economic team, Treasury Secretary Timothy Geithner, expressed what sounds to me like skepticism of the effectiveness of Keynesian policy in dealing with our present economic circumstances:

We don’t have the ability (because of the overhang in housing and the problems in the financial sector) to artificially engineer a stronger recovery.

That’s certainly in direct conflict with economist and columnist Paul Krugman who has repeatedly said that it’s not the ability to engineer a stronger recovery that’s lacking but the will.

Can anyone think of a theoretical basis for Sec. Geithner’s remark? I can’t.

5 comments… add one
  • john personna Link

    I think you are right that he is not speaking theoretically.

    He’s saying that none of the politically possible paths are acceptable to him.

    I say this recognizing that the politically possible paths are narrower for him than some others.

  • PD Shaw Link

    Even Krugman is now skeptical of the Keynsian value of the stimulus package.

    http://dailycaller.com/2011/07/12/krugman-i-didnt-mean-that-stimulus/

  • Funny you should mention that, PD. Just as you were commenting I published my own post on Kaus’s pickup.

    I sense a disturbance in the force. Pretty soon we’ll see a gaggle of bloggers arguing vehemently for stimulus furiously backpedaling, deleting their old posts where they can. Perhaps it will take the form of clarifying their previous remarks.

  • john personna Link

    I’m not sure I get the meme. Or that daily caller is being fair to Krugman.

    If the spending was net-additional (which I think we all agree), how is it an indictment of Krugman, who clearly wanted net-additional stimulus spending?

  • john personna Link

    “if the spending was [not] net-additional …”

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