The simple brilliance of Jared Bernstein

I have always found Jared Bernstein, a former adviser to Vice President Joe Biden, to be one of the more lucid, illuminating voices to rise from the dismal miasma of economics. Bernstein's insightful lucidity probably stems from his lack of professional training in the discipline, much as so much excellent history comes these days from almost anyone but professionally trained historians. Anyhoo, in a NYT op-ed today, Bernstein once again demonstrates his keenness: 

[W]e’re into a negative loop where persistently weak demand is chipping away at the labor and capital supply and productivity advances needed to increase our potential growth rate. Supply-side, deregulatory zeal has deprived the economy of investments in infrastructure and other public goods, innovative research and the oversight necessary to prevent the shampoo cycles — bubble, bust, repeat — that are whacking away at our potential growth rates.

Proving the theoretical impoverishment of supply-side economics requires only an intellectual loyalty to empiricism, at which Bernstein excels. But he also brilliantly and unfailingly makes the case for demand-side economics, which is way, way overdue for a dominating comeback.

Comments

[japa21]

Two things. Even the GOP believes in demand side economuics and that government creates jobs, they just don't say it out loud. But whenever they complain that reducing defense spending will cost jobs, that is eaxactly what they are doing.

Your comment about historians gave me a chuckle. My son just received his PhD in history from Northwestern earlier this year. He currently teaches American History at a Chicago Catholic college prep high school. Basically, he pretty much refuses to use textbooks and has his students work from as much source material as he can find for them.

His basic argument is that most textbook are now written to meet Texas standards (which are pathetic) rather than real educational standards.

Unfortunately for his students he may not be teaching there long. After being there 5 years the school has decided he needs to go back to school and take education courses so he can be certified by the State of Illinois (which is not a legal requirement for private schools). Hell, Northwestern asked him to create and teach classes while he was a student there but this school is willing to discard one of its better teachers (and yes, I am biased.)

[AnneJ]

I like the term "shampoo cycles". But this kind of demand side vs. supply side economic thought shouldn't require an advanced education to understand. I'm not very highly educated and I understand it just fine. But I believe that being near the bottom of the economic food chain makes you understand the same things that people who went to college to study this stuff do perhaps better because you have to live it.

[Turgidson]

There may very well be a point where excessive taxation becomes a compelling disincentive to further investment, growing a business, etc.

But the idea that we are at that bound right now with a top tax rate of 35%...is painfully ludicrous. And the "intellectuals" who defend supply sideism surely know it. But the whole point of pushing this hogwash on the discourse is to create political conditions where taxes can never, ever go up. Because socialism and John Galt and government *is* the problem, also too.

If Obama is able to break us out of this downward spiral, it will be a big feather in the cap of his legacy. But I don't think we'll be rid of this disease as long as the House GOP caucus is made up mostly of teabagger dolts...and they promise to be there a while thanks to the 2010 gerrymander.