In it, he promotes 4 ways the administration could have (could still) improved employment:
- Expansionary fiscal policy: convince congress to appropriate more money and borrow-and-spend.
- Expansionary monetary policy: staff up the Federal Reserve with governors who believed that large-scale quantitative easing and inflation, price level, and nominal GDP targeting were worth attempting.
- Use the TARP and the Treasury's powers to offer bank guarantees to engage in large-scale quantitative easing by the executive branch.
- Focus on putting into place long-run policies to balance the federal budget, and hope that their passage induces the confidence fairy to show up.
Maybe I'm daft, but didn't the Bush and Obama (combined) administrations do all 4 already? They did the fiscal policy (ARRA), the Fed has been aggressively using non-traditional monetary tools, they already have been supporting banks and given bank profits recently I don't think bank lending is the crux of the problem anymore anyway, and hasn't Obama already touted his long-run sense of balance?
Delong offers up no exciting alternatives - he's no different than Obama.
I may disagree with them, but you can't deny some post-Keynesian's alternative of direct government hiring of unemployed persons - it's an exciting idea. What about mandating a temporary national wage re-structuring to try and get the invisible hand working again? What about taking the money out of China that they stole from the US through their deceptive currency policies? What about taking the unused ARRA / TARP monies and using it to fund appropriate (re)education programs to help with some of the potential structural unemployment potentially underlying our present problem.
I don't necessarily support all the above ideas - in fact, some of them may be bad ideas - but they are different - they are exciting. Obama, Delong, Krugman - they all just want the same old kindergarten Keynesian spending. And while I may have even been somewhat sympathetic to that in the past, I've learned since this recession, that the government not only shouldn't but literally CAN'T simply rely on the Keynesian multiplier to lead us out of the depths - our government simply isn't set up to do that correctly. It is too beholden to interests and lobbyists, it is too inefficient, it is too slow....