Crapo, hiding among a swarm of syncophants
Mike Crapo is in Boise today to “advise” the Idaho House and Senate about the recently passed stimulus bill. Granted, the clueless Idaho legislature could use some advice. And, some would argue, compared to the rest of the Idaho Congressional Delegation (“Fraud” Risch, “Bizarro World” Simpson and “Blue Dog” Minnick) Crapo is the most level headed of the stimulus deniers.
I don’t think so. In fact, I feel that the only real difference between Crapo and the others is that Crapo is a much more savvy politician. Rather than display his ignorance, he has kept a low profile. For most of his career, he managed to hide in the wide-stance shadow of Larry Craig, initiating no legislation and voting lock-step with the Republican party.
Now that he is the senior Senator, he is expected to show some leadership. As a member of the Finance Committee, Budget Committee and Banking, Housing and Urban Affairs, it would be hoped that economics would be his one area of expertise.
A recent interview with Erika Bolstad shows otherwise. Consider Crapo’s answer to her first question
Both the stimulus plan and the plan unveiled (Tuesday) by Treasury Secretary Timothy Geithner have a very Keynesian approach, with roots in putting a lot of government money out there at once. Do you accept that economic view?
Okay, a good question. We can assume that Crapo will not be a Keynesian.
No, I don’t think that is a valid economic view. In fact, I think many economists today would tell you that approach has been losing favor in terms of validity.
Wait a minute. So, not only is Keynesian economic theory not valid, it is “losing favor in terms of validity” among economists. So, in Crapo’s delusional mind, we have been experimenting with Keynesian economics the last couple of decades and the theory as been shown to be unsound- invalid.
People talk about what happened after World War II and the New Deal as an example of the success of the Keynesian philosophy, and although I don’t profess to be an expert, I know that a lot of the economic experts are saying that the way we look back at those things doesn’t correctly reflect what the impacts truly are.
Mike, no need to point out that you are not an expert. The rest of that sentence makes that point quite effectively. The so-called “economic experts” like partisan hack Amity Shales, who claim that Keynsian economics failed during the New Deal, have been thoroughly debunked. And, what to make of your statement about “what happened after world war II”? What exactly happened besides post-war prosperity?
Of course, it is easy to find a few economists who are ideologically opposed to Keynesian economics and, consequently, are against an economic stimulus in our current crisis. They are Chicago school, Milton Friedman, deregulation, radical free market, tax cut, Shock Doctrine economists who have careers invested in their economic models and who have driven policy since the “Reagan revolution.” That is right- the purveyors of the “failed policies of the past”. Talk about an economic approach that has been losing favor in terms of validity!
I wouldn’t be so outraged with Crapo if I thought he really understood the economics behind the stimulus bill and opposed it with a coherent response. Instead he mouths muddled Republican talking points.
UPDATE: From Eye on Idaho,
Idaho’s senior U.S. Senator, Mike Crapo, addressed the Senate and House today, and was held up for about 10 minutes in the Senate as that chamber wrapped up a hot debate on sewage rules.
This was a nice transition into Crapo’s crapo advice.
He offered lawmakers what he called a bit of unsolicited advice about the upcoming federal stimulus funds. “You are going to now be faced with an interesting job, as somewhere between $600 million and a billion dollars of this bill will flow into Idaho, a lot of it flowing into programs that you administer as policy makers in the state. One of the big concerns that a lot of us have with this bill is that the increases in a number of these programs will be built right into the federal base and into the base of the states, so that we actually, instead of starting out the next fiscal cycle with a $1.2 trillion deficit, we will have a deficit that starts growing unbelievably large.
I just encourage you, as you deal with this largesse that is going to be coming your way in terms of the stimulative dollars, that you pay very close attention to what it will do to your base in your budget here in the state,” Crapo told the Senate. “I’m not telling you what to do with it or how to handle it. What I’m saying is … I don’t think it can last forever.
Of course, it won’t last forever. That is the way Keynesian economics works. Keynes advocated “countercyclical” fiscal policy
Keynes argued that the solution to depression was to stimulate the economy (“inducement to invest”) through some combination of two approaches: a reduction in interest rates, and government investment in infrastructure. Investment by government injects income, which results in more spending in the general economy, which in turn stimulates more production and investment involving still more income and spending and so forth. The initial stimulation starts a cascade of events, whose total increase in economic activity is a multiple of the original investment.
Keynes’s theory suggested that active government policy could be effective in managing the economy. Rather than seeing unbalanced government budgets as wrong, Keynes advocated what has been called countercyclical fiscal policies, that is policies which acted against the tide of the business cycle: deficit spending when a nation’s economy suffers from recession or when recovery is long-delayed and unemployment is persistently high—and the suppression of inflation in boom times by either increasing taxes or cutting back on government outlays.