Wednesday, February 25, 2009

Pushing On A String

Dean Baker tries to discuss the stimulus plan, the housing bubble, and the Federal Reserve, among other issues, with Megan McArdle (conservative/libertarian propagandist).

Megan 'seems' like a very bright person, and she even raises some good points (for the first few minutes). But too often she cuts Dean Baker off or uses deflectors like, "well, the real question is" or, "anyways, what really matters is." And sometimes she just doesn't seem to have a grasp of the facts or just won't admit that she doesn't, whereby she then rambles and morphs the discussion into a new argument.

She goes on and on about “make-work” jobs. Saying the WPA wouldn’t have been created if there was full employment. Duh! That is the purpose of demand-side stimulus. The government steps in to do that which the private sector will not or can not.

Megan implies that workers in the WPA program just recorded oral histories and painted murals. And, also (latter) in a rather immature quip she compares it to hiring people to mow their lawns. Ridiculous! She conveniently sweeps past Dr. Baker’s evidence of roads and bridges. As if to imply, the work being done added no long-term value, built nothing of value, created no jobs, nor helped the economy recover. The GDP and employment indicators of the time tell a different story.

She then goes on to say how proxies, ways of measuring, are imperfect…as if, there’s just no good way to measure anything, so therefore, we really don’t know anything, what works, or what doesn’t. But, stupendously, somehow she knows.

And, also, she makes the distinction between good and bad “make-work” jobs – if she doesn’t like the project or thinks it's wasteful, then it’s bad “make-work.”

Next, she explains how a son-in-law being hired because of nepotism is a “make-work” job. Huh, that’s an interesting one. The old saying, “it’s who you know, not what you know” didn’t come about for just any reason. So all the people who knew someone whom helped you obtain a job, because of that connection your job isn’t real. Wow, the unemployment rate is going to rise spectacularly under Megan’s new way of measuring.

To her this is all most likely bad debt. She feels we can't borrow and spend and have any good come from it. But that train of thought is debunked here, here and here.

I also was really 'charmed' by her use of phrases like “everyone knows,” implying everyone but Dr. Baker knows and he’s an idiot to even be debating her on this particular point. Or when he would squash her weak argument, she would then say, “we’re arguing about two different things,” or “that’s neither here nor there.” The only thing she seems to have done successfully here is muddle the discussion into the realm of incoherence (which is Republicans' want).

Or when she tries to sound academic and says things like the marginal product of labor ("if we value what they are creating more than we are paying them" - her definition). But this concept really supports the notion that productivity rather than debt is a better indicator of our growth and quality of life. That is, looking back years from now, even if we are paying off debt, yet we have increased our productivity (more so than we otherwise would have), the stimulus plan will have been successful.

Her whole argument also has an underlying assumption - there is no waste in the private sector. Which, if the last eight (or, for that matter, twenty-eight) years have shown us anything, this is definitely not the case. She appears to be nothing other than an enraptured ideologue.

One can only conclude Megan McArdle is a train-wreck.

During a few spots I was hoping Dean would just say, "OK. Next topic." Since it was obvious Megan only wanted to hear herself pontificate and bloviate.

But nonetheless, it's a good informative least when Dean is allowed to speak.

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