Monday, January 26, 2009

Two good stuff

First, foreign aid critic and development economist Bill Easterly starts a new blog: Aid Watch. Let us hope that Jeff Sachs starts a blog in response to this one!

Today, I foist a new blog called Aid Watch on the blogosphere. The objective is to be brutally honest when aid is not helping the poor, but also praising it when it is.

Second, as always, Krugman has a nice pro-stimulus opinion piece, where he bashes the anti-stimulus arguments that have no substance but cheap talk. Some people simply don’t want to see the Keynesian policies to work again. This partly is to hide their embarrassment emanating from the application of their failed ideology and not let the alternative time-tested ideology to work so that in the end there is only one ideology left in policymaking, irrespective of its failure or success!

Conservatives really, really don’t want to see a second New Deal, and they certainly don’t want to see government activism vindicated. So they are reaching for any stick they can find with which to beat proposals for increased government spending.

…there’s the bogus talking point that the Obama plan will cost $275,000 per job created. Why is it bogus? Because it involves taking the cost of a plan that will extend over several years, creating millions of jobs each year, and dividing it by the jobs created in just one of those years.

…write off anyone who asserts that it’s always better to cut taxes than to increase government spending because taxpayers, not bureaucrats, are the best judges of how to spend their money.

…ignore anyone who tries to make something of the fact that the new administration’s chief economic adviser has in the past favored monetary policy over fiscal policy as a response to recessions.

…because we’re in a situation not seen since the 1930s: the interest rates the Fed controls are already effectively at zero…That’s why we’re talking about large-scale fiscal stimulus: it’s what’s left in the policy arsenal now that the Fed has shot its bolt. Anyone who cites old arguments against fiscal stimulus without mentioning that either doesn’t know much about the subject — and therefore has no business weighing in on the debate — or is being deliberately obtuse.