The United States of America isn’t a business and, as such, can’t be run like one

Atrios, stating the simple truth that being good at something doesn’t axiomatically make you good at something else, points to a Paul Krugman post regarding the ubiquitous sentiment that smart businessmen make good economic policymakers.

Leaving aside all the questions about what Mitt Romney did or didn’t do at Bain — and about his self-aggrandizing double standard — there’s an even broader question: why does anyone believe that success in business qualified someone to make economic policy?

For the fact is that running a business is nothing at all like making macro policy. The key point about macroeconomics is the pervasiveness of feedback loops due to the fact that workers are also consumers. No business sells a large fraction of its output to its own workers; even very small countries sell around two-thirds of their output to themselves, because that much is non-tradable services.

This makes a huge difference. A businessman can slash his workforce in half, produce about the same as before, and be considered a big success; an economy that does the same plunges into depression, and ends up not being able to sell its goods.

The answer to that question is probably rooted in the fact that [number far exceeding 90%] of people have never been privileged to a class on even rudimentary macroeconomics. (Also an explanation for why Ron Paul has so many followers when, literally, he has 19th century views on how the world operates.)

I’m not saying that is necessarily a fault of their own. Contrarily, this ever-present notion speaks to the continuing failures of American elites to be honest and forthright with the electorate.

That is, unless they actually believe this nonsense. That can’t be the case, though, right? 

Right?…

Is There a Hand to Take Hold of the Scene?

In lieu of another addition to the already countless, standard and grim analyses of the recently released BLS report on employment, which are, truth be told, the verbal equivalent of a gut-wrenching sigh, here’s a song by Okkervil River that aptly describes my disposition toward the matter.

I’m almost certain that the past few years have been a scary movie in which the protagonist keeps going through that door. Except, in our case, the movie is being written, directed, filmed, and screened simultaneously by a large, unified bloc of people who don’t really care if the horror ends until sometime after 2012.

We need expansionary fiscal and monetary policy. The ARRA, also known as the stimulus, was an example of expansionary fiscal policy. However, the overall price tag was too small, not to mention the magnitude of the crisis was wildly underrated/unknown at the time of its debate and subsequent passage. Contrary to popular belief, though, and in light of these shortcomings, it performed as well as was expected by those familiar with Keynesian economic theory. We’re not going to get any more of the fiscal part of the equation mentioned above; here’s hoping the Fed gives us something on the monetary side later this month.

The album art even eerily resembles the global economy right now!