Tuesday, June 10, 2008

Obama Names Jason Furman As Economic Policy Director

Barack Obama today named Jason Furman as economic policy director, in an annoucement coming from the campaign.

A quick perusal of his writings, and you can only reach the conclusion that Furman doesn’t have a clue. There is no indication he understands business cycle theory or fears inflation. In fact, it appears he believes the economy can be micromanaged by government, while at the same time he is a Keynesian and an inflationary monetarist.

In the following quote, Furman manages to come off as a Keynesian and inflationary monetarist in the same sentence!

The good news is that the rate cuts will have a big effect on the economy — leading economic forecasters are predicting that the rebate checks and other stimulus measures will add about 0.7% to real GDP.

And once the fiscal and monetary madness makes everything fine, according to Furman, he is going to solve all the rest of government created problems with more government programs:

When the economy does start growing more strongly again, we should use that as an opportunity to focus on some of the long-run growth issues…We should also focus on reforming unemployment insurance, health insurance and taxation in ways that automatically reduce the severity of business cycles and, more important, cushion families from some of the worst downsides of those business cycles.

"Reforming unemployment and health insurance …in ways that can reduce the severity of business cycles” is a new one for me. What does health insurance have to do with the business cycle?

The man doesn’t have a clue, except when it come to understanding the con. He gets that:

…policymakers from both political parties have also been attracted to using the tax code for health reform because of the perception that the public prefers measures described as “tax cuts” to substantively similar measures that are treated in budgetary conventions as “spending increases.”

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