Saturday, December 27, 2008

Summers: Bigger is better

Larry Summers, who will head Obama's National Economic Council, spills the neo-Keynesian beans:
In this crisis, doing too little poses a greater threat than doing too much. Any sound economic strategy in the current context must be directed at both creating the jobs that Americans need and doing the work that our economy requires. Any plan geared toward only one of these objectives would be dangerously deficient. Failure to create enough jobs in the short term would put the prospect of recovery at risk. Failure to start undertaking necessary long-term investments would endanger the foundation of our recovery and, ultimately, our children's prosperity.
That is why his economic team is crafting a broad proposal, the American Recovery and Reinvestment Plan, to support the jobs and incomes essential for recovery while also making a down payment on our nation's long-term financial health.
It won't work. But the big question, I suppose, is whether nationalizing health care will be among those "investments" Team Obama has in mind. What he does say is:
Investments to modernize our health-care system, which is necessary to improve care in the short term and key to driving down costs across the board.
Never mind the subject-verb disagreement ("Investments . . . is"), Americans already have the best health-care system in the world. How does Summers propose to drive down costs? He doesn't say. The lack of specificity is strategic -- opponents can't criticize a plan that exists only as a collection of vague bromides about "investment," without any details or dollar amounts attached.

Summers is an actual economist. He must know better than this. Why do I suspect that this op-ed was ginned up by Jon Favreau and the Obama speechwriting shop and issued under Summers' name with minimal participation by the putative author?

UPDATE: A liberal blogger credits the Summers op-ed with "some precision." But there's not a single specific in the whole thing!

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