ECONOMISTS SAY THE DARNDEST THINGS

Mark Thoma:

One thing I’ve learned from the crisis is that the politics of economic intervention to stabilize the economy is far more important than I realized. When you teach stabilization policy out of textbooks, it’s easy, you just say that the government cuts taxes or increases spending, that the Fed takes this or that action, and then calculate the result (or, more likely, show it graphically). The politics, e.g. the distributional consequences of the policies, are rarely if ever mentioned.

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