What is good politics has, as we know, very little to do with what is good economics (or even sensible such). For example, on the US campaign trail we find the following:
The prospect of many years of big government spending and major tax
cuts in the US appears to be set in stone, after both Hillary Clinton
and Barack Obama suggested plunging up to $70bn-plus of public cash
into the struggling American economy.
They seem slightly to have missed the point (and those arguing over the relative merits of either plan are like bald men fighting over a comb) that neither of the two will be in a position to actually do anything (if either of them ever are) until January 20th 2009: and it'll take them some months at least to get anything done then. Whatever problems the US economy faces now by then it will be different ones. Similarly, the day before we had this as the lead story in the NY Times:
As leaders in Washington turn their attention to efforts to avert a
looming downturn, many economists suggest that it may already be too
late to change the course of the economy over the first half of the
year, if not longer.
Well, yes, interest rate changes take 18 months to work through, both tax and spending changes take at least 6 months to put into place (never mind the time taken to make a difference) so to call this "news" seems a little presumptuous.
Of course, what could be done instead is to look at what actually does help to avert, shorten or mitigate recessions. The unfortunate thing there is that such good economics requires that politicians do nothing (a blessed state of affairs all too rare) but said sensible such is unfortunately bad politics.
For if things will get better without politicians doing anything, why, people might start to wonder why we have politicians at all and that would never do now, would it?
