Keeping politics out of the economy
Paul Krugman writes one of the best columns. I regularly read the New York Times writer just to disagree.
Admittedly, I have no footing to challenge Krugman economically. He received the Nobel Prize in economics; I had a few college classes.
We both write about the economy, but the comparisons pretty much end there.
Thing is, Krugman rarely writes for the Times about economics. He frequently focuses on the economy but typically to talk politics.
Krugman's central message is that government can, should and must fix the economic ills that befall Americans.
For example, he chides the Congress and President Barack Obama for proposing and passing a stimulus package that was simply too small. Do more, lots more, says he.
Having failed to change their minds, he recently turned his disapproval on the Federal Reserve. Buying $1 trillion worth of paper to salvage the financial system wasn't enough.
Krugman endorsed another's suggestion that Fed Chairman Ben Bernanke spend $2 trillion more to finance credit expansion and create some jobs.
Wrote Krugman, "So why isn't the Fed doing it? Part of the answer may be political: Ideological opponents of government activism tend to be as critical of the Fed's credit expansion as they are of the Obama administration's fiscal stimulus."
He may be catching on!
Most political actions are aimed at halting or reversing economic actions. Pols use the power of law to change the path of money.
Rarely does this help the broad economy, or those of us in it, as much as it helps the politicians directing dollars.
Krugman's frustration with, in his mind, a timid federal response to the economic crisis demonstrates why we should not rush to turn economic matters into political ones.
Assuming that Krugman has the right economic prescription (and that is an assumption), the least likely way to get it done is to infuse it with political agendas.
It makes more sense for government to let the economy make economic decisions. And by economy, I mean us, the buyers and sellers, investors and savers, employers and unions, etc.
Government's critical role is to keep information flowing, open opportunity broadly, level playing fields and ensure that markets function. Its job isn't to take sides, pick winners and force outcomes.
But Krugman is a smart, educated guy who naturally seeks out answers to big problems. I think he's wrong to believe he can divine a better path than our collective actions can.
The real danger lies in allowing more and more of our economic choices to be made in Washington. When the politicians get it wrong, and they often enough do, it can sure mess things up for the economy, and that means us.
• Mark Davis is a columnist for the Kansas City Star. Readers may write to him at: Kansas City Star, 1729 Grand Blvd., Kansas City, Mo. 64108-1413, or by e-mail at mdaviskcstar.com.