Baffled by the Economy
Why being a macroeconomist means never having to say you’re sorry
By Steve Chapman
President Obama and his critics have a major disagreement. He says his accelerated economic stimulus efforts will create 600,000 jobs by the end of the summer. Senate Republican Leader Mitch McConnell of Kentucky, however, doubts “the spending binge we’re on is going to produce much good.” Both can’t be right. But neither has to fear being proved wrong.
Why not? Because there is no persuasive way of determining the effect of implementing the president’s policies. No matter what happens, each side can claim vindication.
If the economy improves and unemployment drops, Obama can take credit. If it fails to improve and unemployment rises, though, he can say he averted an even worse showing. Republicans will take the opposite tack—attributing any improvement to the natural resilience of the economy and blaming the administration if things get worse. And neither side will really know who’s right.
I have long been a believer in the value of economics in understanding the world. But the chief effect of the current crisis is to raise the possibility that economists—at least those macroeconomists, who study the broad economy—don’t have a blessed clue.
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