On 31 March 2009, the Senate Committee for Banking, Housing, & Urban Affairs held two panels on Lessons from the New Deal. (This video is about two hours long.)
Panel 1: Christina Romer, Chair of the Council of Economic Advisors.
Panel 2: Professors James Galbraith (U of Texas at Austin), Bradford DeLong (UC-Berkeley), Alan Winkler (Miami [Ohio] Univ.) and Lee Ohanian (UCLA).
All the panelists seemed to downplay the importance of fiscal stimulus as an intentional policy during normal times.
One point that I would have liked to see them discuss is the problem of fiscal stimulus as an unintentional policy.
During the early parts of the Bush administration he turned the federal budget from surplus to huge deficits.
This was fiscally stimulative when the economy did not need a stimulus. I have always wondered what the ultimate impact is when the monetary policy has to counteract the fiscal policy. I wonder if the economic outcome would be better if the two policy tools worked to accomplish the same purpose rather than acting at cross purposes.
For me, the transmission worked throughout both panels. You really miss a lot if you do not hear the second panel.
Christina Romer’s presentation was extremely helpful in repairing the misunderstandings that I had on some of the historical details of the depression era.
In the second panel there was some debate about her interpretation. By and large, her interpretation stood up very well.
Of the four people on the second panel, Lee Ohanian was the one conservative voice.
I think he had some valid points to make, but it helps to have some of your own understanding to recognize the BS when he spews it. (Not to say that there wasn’t a tiny bit of unsupported comments from the other panelists.) I think the balance of supportable conclusions to unsupportable conclusions was higher among the other three panelists than they were with Ohanian.
The Galbraith, DeLong, and Winkler presentations were excellent teaching moments. They added to the very topics Romer discussed and filled in details in areas that she admitted were outside her expertise.