Can the 21st century get any worse?

I recently ran across an old NYT article from January 2001. What a breath of fresh air:

Basically, monetarists wanted to get the government out of the business of short-term economic management. First and foremost this meant rejecting the use of fiscal policy — discretionary tax cuts or spending increases — to fight recessions.

By and large this was an argument that the monetarists won on the evidence. . . . [A]lmost all economists now agree with the position that monetary policy, not fiscal policy, is the tool of choice for fighting recessions.

Almost all economists, that is, except those who have been or hope to be tapped for jobs in the new administration. Indeed, it’s remarkable how thoroughly George W. Bush’s people seem to have been converted to a crude Keynesian view of economic policy — a view that, it just so happens, offers them another justification for a tax cut that even moderate Republicans think is excessive. . . .

Lawrence Lindsey, who last weekend stood Milton Friedman on his head, declaring that monetary policy is ineffective and fiscal policy reigns supreme. Here’s what he said: “Let’s contrast the typical credit card borrower on monetary policy versus fiscal policy. The interest rate cut of last week helps the typical credit card borrower about two bucks a month, two dollars a month, whereas Mr. Bush’s tax cut for a family making $40,000, gets a $1,600-a-year tax cut, 32 bucks a week. That’s a much bigger heft.”

You have to admire Mr. Lindsey. It’s not often that an economist manages a triple play. But he did it: his statement was specious on three distinct levels. . . .

Finally, and most important, [Lindsey] misrepresented the way interest rate cuts work. Their main effect on demand isn’t via a reduction in the payments people make on the debt they already have; lower interest rates work by stimulating investment, that is, by inducing businesses and individuals to borrow more, or to put their money into real assets instead of parking it in bonds. That’s how rate cuts led to recovery from the last recession even while Bill Clinton was raising taxes. . . .

Yes, the good old days when what’s now called “market monetarism” reigned supreme, when new Keynesians believed monetary policy was more powerful than fiscal policy, and that using fiscal policy to stabilize the economy was a foolish idea.

The author of this NYT piece (Paul Krugman!) also had some choice words for the ethics of the Bush administration:

One little-noticed but important virtue of the Clinton administration was its honesty in economic analysis and reporting. In general — and in contrast to some of their predecessors — Mr. Clinton’s economists avoided misrepresenting the facts, using convenient but specious arguments, or employing scare tactics to sell their policy ideas.

Ah, the good old days when Bush level dishonesty was viewed as an outrage. I think even Krugman would admit that he never could have imagined an American administration sinking into the current abyss of dishonesty and corruption, where non-stop lying is considered part of the new normal.

I also imagine that back in 2001, Krugman would have had trouble imagining a world where new Keynesian economists began denying that unemployment compensation discouraged people from working, where minimum wage laws and rent controls and anti-price gouging laws were suddenly a good thing, where “crude Keynesianism” was back in vogue, where monetary offset was totally ignored (even when the central bank had plenty more ammo), and where the central bank allowed disinflation during the greatest adverse supply shock in global history.

Or a world where conservatives embraced nationalism, demagoguery, protectionism, bigotry, massive government spending programs, trillion dollar deficits during boom times, and all the rest.

It’s been all downhill since 2001.

You can have your stupid iPhones; I’ll take the late 20th century any day.Heck, I even prefer the grimy 1970s, which will eventually been seen as a golden age—the absolute point of “peak privacy” in the entire 2 million year history of human beings.An urbanized society where traditional so-called “morals” had recently collapsed and our overlords had not yet invented electronic surveillance.

Who you looking at?