Yesterday, Seneca Doane posed the question of whether President Obama was a Keynesian. Doane confessed to doubts on this score and asked others to convince him that he was wrong.
I posted on this diary confessing my irritation with anonymous Beltway insiders who just couldn't figure out how to make the case for Keynesianism and economic stimulus. I made a suggestion that advanced Keynesian arguments without mentioning Keynesianism itself.
Today, a front-page story in the New York Times makes this even clearer. The Administration is apparently VERY sensitive about this. I was going to post a link to the money quote (from the print edition) only to find that the online edition has removed the money quote!
Here's a piece the article including the redacted section (in bold):
But Christina Romer, who stepped down last year as the chairwoman of the president’s Council of Economic Advisers, said Mr. Obama should fight for short-term spending in combination with long-term deficit reduction.
“Playing it safe is not going to cut it,” said Ms. Romer, a professor of economics at the University of California, Berkeley. “Not proposing anything bold and not trying to do something to definitively deal with our problems would mean that we’re going to have another year and a half like the last year and a half — and then it’s awfully hard to get re-elected.”
But there is little support for such an approach inside the administration. A series of departures has left few economists among Mr. Obama’s senior advisers. Several of his political advisers are skeptical about the merits of stimulus spending, and they are certain about the politics: voters do not like it.
We don't believe there's an either-or choice between deficits and jobs," said Dan Pfeiffer, the White House director of communications. "You have to be able to do both of them."
"It would be political folly to make the argument that government spending equals jobs," Mr. Pfeiffer added.
Mr. Plouffe and Mr. Daley share the view that a focus on deficit reduction is an economic and political imperative, according to people who have spoken with them. Voters believe that paying down the debt will help the economy, and the White House agrees, although it wants to avoid cutting too much spending while the economy remains weak.
The redacted section is the whole core of the issue. The bad news is that the White House director of communications has these views. The good news (I think) is that someone wanted this quote to disappear.
For that is the whole issue. Government spending does equal jobs and reducing government spending directly adds to unemployment.
Real Democrats would be pointing out the dishonesty of Tea Party and GOP talking points that complain about the unemployment rate. Since they believe that only private sector jobs matter, Democrats should not allow themselves to be graded by Republicans on the score of unemployment.
If open Keynesianism doesn't sell politically, maybe anti-anti-Keynesianism does. Deficit reduction leads directly to cutting public sector jobs. Thus any economic strategy built on deficit reduction needs to explain first and foremost, how it will recover the immediate negative hit on jobs that it necessarily entails.
Here's my sound bite:
You can't save a village by destroying it. And you can't create jobs by throwing people out of work. Do Republicans also believe in the tooth fairy?