Michael Boskin and Edward Lazear take on the economy, discussing the explosion of deficit spending and the unprecedented increase in the money supply.
Following the worst recession since WWII, why does the economic recovery seem so weak? Where, in particular, are the jobs? As a matter of pure economics, what do we need to do? As a matter of practical politics, how can we do it?
Dr. Michael Boskin
Michael Boskin, a fellow at the Hoover Institution and a professor of economics at Stanford, served as chairman of the Council of Economic Advisors under President George H. W. Bush.
Edward Lazear, a fellow at the Hoover Institution and a professor at the Stanford business school, served as chairman of the Council of Economic Advisors under President George W. Bush.
Peter M. Robinson is a research fellow at the Hoover Institution, where he writes about business and politics, edits the Hoover Institution's quarterly journal, the Hoover Digest, and hosts Hoover's television program, "Uncommon Knowledge."
Robinson is also the author of three books: How Ronald Reagan Changed My Life; It's My Party: A Republican's Messy Love Affair with the GOP; and the best-selling business book Snapshots from Hell: The Making of an MBA.
Former Chairs of the Council of Economic Advisers Michael Boskin and Edward Lazear discuss the rationale behind President Obama's economic policies. They argue that the stimulus plan was based on flawed economic theories, motivated more by hope than evidence.
Downward trend in the business cycle characterized by a decline in production and employment, which in turn lowers household income and spending. Even though not all households and businesses experience actual declines in income, they become less certain about the future and consequently delay making large purchases or investments. Consumers buy fewer durable household goods, and businesses are less likely to purchase machinery and equipment and more likely to use up existing inventory instead of adding goods to their stock. This drop in demand leads to a corresponding fall in output and thus worsens the economic situation. Whether a recession develops into a severe and prolonged depression depends on a number of circumstances. Among them are the extent and quality of credit extended during the previous period of prosperity, the amount of speculation permitted, the ability of government monetary and fiscal policies to reverse (or minimize) the downward trend, and the amount of excess productive capacity. Comparedepression.
"More hope than based on evidence" says the Hoover Institution, an institution founded by Herbert Hoover, the president who watched while 1/4 of all Americans became unemployed while touting the wonders of the 'free market'. It was then that FDR employed the Keynesian model, which started to work (until FDR scaled back and decided to cut spending, thinking the country was out of the depression for good) and it was in 2008 that the government passed a shy stimulus plan that the most respected economists warned was too small.
And since then we've seen the president save millions of jobs based on stimulus spending, however, we've lost many millions more. In perspective, if the stimulus package were larger and didn't contain 40% tax cuts for corporations, it might have invested in programs that saved jobs and produced a healthy economy. Then we could afford to cut spending and save money.
Don't mistake Obama for a Keynesian. Or a liberal. Keynes never said that a tablespoon a Keynesian economic policy would cure all ills.
What a joke. Chapter 8 "if we do not keep taxes low and high growth open economy our standard of living will fall" What planet to they live on? By almost any measure the last 30 years have been the some of the worst for average middle class Americans. The only way the middle class maintained there standard of living was to borrow against an inflated housing market and now we see how well that worked. Why do we give people who have be proven so wrong any airtime?