Ungovernable In A Crisis

Paul Krugman and Noah Smith discuss the critic of Keynesian economics John Taylor's conclusion that Obama's stimulus of 2009 had too much tax cuts and too little government purchases. Smith writes:

[Taylor] suggests [. . .] that tax rebates and transfer payments don't make for particularly good stimulus, because in a balance-sheet recession people will just use the money to pay down their debts. [. . . T]his is a reason why Keynesians often argue that government spending is a better approach to stimulus than tax rebates. On that note, Taylor notes that federal expenditures didn't rise by very much due to the ARRA[. . . .] This precisely echoes the complaints that Keynesians had about the ARRA: not enough federal government purchases, not enough infrastructure spending.

In response to these points, Taylor wrote:

[E]xperiences from the 1970s raise serious doubts about the political and operational feasibility of such discretionary fiscal policy. ...In a simple Keynesian model, all the government has to do to combat a recession is quickly increase government purchases, but the difficulty with doing so in practice is one of the classic arguments against discretionary fiscal policy.

Matt Yglesias seconds that emotion. The argument appears to be that the United States is ungovernable in a crisis that requires something other than a war. That our government is incapable of implementing the proper policy at this time. Indeed, that our government will implement that absolutely incorrect policy at this time. No one thought this before the past 3 years it seems to me.

Speaking for me only

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    More Krugman (5.00 / 2) (#1)
    by MO Blue on Tue Jul 05, 2011 at 08:21:48 AM EST
    ...Month by month, the discourse has gotten more primitive; with stunning speed, the lessons of the 2008 financial crisis have been forgotten, and the very ideas that got us into the crisis -- regulation is always bad, what's good for the bankers is good for America, tax cuts are the universal elixir -- have regained their hold.

    On the face of it, this seems bizarre. Over the last two years profits have soared while unemployment has remained disastrously high. Why should anyone believe that handing even more money to corporations, no strings attached, would lead to faster job creation?

    Nonetheless, trickle-down is clearly on the ascendant -- and even some Democrats are buying into it......link

    IMO trickle-down has been the Obama policy from the beginning. "Winning the Future." = OBAMA SEEKS TO WIN BACK WALL ST. CASH

    I don't know, BTD, I think the War on (5.00 / 1) (#2)
    by Anne on Tue Jul 05, 2011 at 09:19:32 AM EST
    the Masses is going quite well, proceeding apace probably faster than expected with the able assistance of the Democratic president and others of like mind taking up the cause in the Congress.

    Came across this excellent op-ed on Sunday in the WaPo:  What History Teaches Us About the Welfare State.

    The whole thing is worth reading, which makes it hard to put up an excerpt, but here is a portion:

    In the face of economic calamity and skyrocketing unemployment, the government did, well, nothing. No federal unemployment insurance eased families' suffering and kept a floor on demand. No central bank existed to fight deflation. Large-scale government stimulus was a thing of the distant future.

    As demand collapsed, businesses slashed payrolls and reduced wages, and a ruinous period of deflation began. By 1879, wholesale prices had declined 30 percent. The consequences were catastrophic for the nation's many debtors and set off a vicious economic cycle. When economic growth eventually began, progress was slow, with periodic crises plaguing the economy through the end of the century.

    Neither political party offered genuine solutions. As historian Richard Hofstadter put it, political parties during the Gilded Age "divided over spoils, not issues," and neither Democrats nor Republicans were inclined to challenge their corporate masters.


    The vast disparities between rich and poor, the spectacular concentration of wealth amassed by the richest Americans in the previous two generations, and the inability of government policies to mitigate the crisis brought the nation to the edge of class warfare and social disintegration.

    The specter of a European social order, with societies irredeemably divided between aristocrats and a permanent underclass, seemed to have arrived on U.S. shores. Wealthy Americans began to fear for the stability of the social order.

    What force, the wealthy asked in desperation, might mitigate the social chaos and misery, and mute what one public official called "the antagonism between rich and poor"?

    Today, new fortunes have been accumulated that rival those of the Gilded Age. Some of that wealth, possessed by people like Charles G. Koch and David H. Koch or Peter G. Peterson, has been used to promote cuts to social spending. Before these opponents and their allies in Congress move forward with the dismantling of the welfare state, however, they might think harder about the reasons such policies were put in place.

    The Gilded Age plutocrats who first acceded to a social welfare system and state regulations did not do so from the goodness of their hearts. They did so because the alternatives seemed so much more terrifying.

    I guess things have not gotten terrifying enough for the New Gilded Age Gang...

    They are terrified enough (5.00 / 4) (#8)
    by ruffian on Tue Jul 05, 2011 at 10:43:51 AM EST
    to turn the country into something closer to a police state than I ever thought I'd see. Anyone who dares mount a class war would quickly see anti-terrorism laws in action. I do not think the timing of all of this is a coincidence.

    Sure, what do you think happened in the (5.00 / 1) (#15)
    by observed on Tue Jul 05, 2011 at 11:58:36 AM EST
    Gilded Age? If they had had today's enforcement and surveillance techniques, we wouldn't have gotten out of that era without a revolution.

    Yglesias last week (5.00 / 1) (#4)
    by lilburro on Tue Jul 05, 2011 at 09:54:51 AM EST
    But that's largely because I believe all critiques of Obama that aren't critiques of his macroeconomic management are slighting the role that poor macroeconomic management has played in exacerbating everything else. It's certainly true that his team has faced an unprecedented level of non-cooperation from Republicans. But at the same time, Obama hasn't shown much in the way of so-called "Rooseveltian resolve" to keep trying things and appears to have quite sincerely pivoted toward deficit control and structural reform last winter even with unemployment stuck at sharply elevated levels.


    There is a lack of accountability problem in this country...the GOP is not held accountable, Wall St is not held accountable, Bushco is not held accountable...etc.  On top of everything else, that is a direction that Obama and his team decided to take.  

    Sometimes it seems like what "progressivism" developed into is "get something good done no matter how, no matter how big it is."  In this debt ceiling debate we are being asked to sacrifice a lot for the possibility that unemployment will tick down a little.  It's silly and this outcome was not inevitable.

    We are truly crazy (5.00 / 3) (#7)
    by Dadler on Tue Jul 05, 2011 at 10:41:37 AM EST
    We live with a fiat economy, using worthless trinkets as the necessary game pieces humans must have to survive in this modern society.  And yet we act and behave as if we live in exactly the OPPOSITE kind of economy, as if we are trading in seeds and goats, as if we must pray to the Gods that the buffalo return to the prairies, when we KNOW are the ones who have killed all of them.  And when we have no problem throwing trillions at useless wars and at overly advantaged people who would never need a dime of help for the rest of their lives.

    This is disturbingly solid proof that, as a nation, we are mentally disabled.  We are, in a word, insane.

    Yes, once again, (5.00 / 0) (#19)
    by cal1942 on Tue Jul 05, 2011 at 12:48:16 PM EST
    we are living in the midst of a nation sized insane asylum.

    It isn't just "serious people" or those elected to public office who sound like the mad hatter.  Read letters to the editor in your local paper, they range from good to totally insane.

    Galbraith said every generation is doomed to learn all over again.  He was right.


    Dadler for Treasury Secretary... (none / 0) (#9)
    by kdog on Tue Jul 05, 2011 at 10:44:33 AM EST
    Geithner's f*ckin' out, Dadler's f*ckin' in if I had anything to say about it.

    The stimulus failed (1.50 / 2) (#17)
    by Slado on Tue Jul 05, 2011 at 12:04:15 PM EST
    Weekly Standard

    Now Republicans and Democrats say I told you so for different reasons.  Republicans because they never thought it would work and dems because it wasn't big enough.

    I don't understand the economic magic math that Krugman holds onto but who cares.  Does it matter anymore?

    We can all agree it failed.   Now what?

    I'll tell you what.  We all batten down the hatches and pay off the debt we've collectively accumulated.   We added almost 5 trillion in debt and got nothing to show for it.  Maybe we should start paying it off now or we can find out what tear gas smells like when we head to the streets to protest the end of or drastic cutting of every social program we're all so addicted too.

    What stimulus? (5.00 / 5) (#24)
    by Dadler on Tue Jul 05, 2011 at 01:51:12 PM EST
    What was passed was inadequate in every respect, relied too much on tax cuts, didn't include a massive jobs program, and can be scarcely be called "stimulus" by any rational measure.  Hence it didn't work.  

    By your rationale nothing will work, since without the confidence of a mass of Americans, nothing will change, and without a ton of jobs and a lot more money in their pockets, there ain't gonna be no confidence.  This is not which came first, the chicken or the egg (your economic paradigm); this is which came first, human beings or money?  

    We both know the answer.  

    If you think money is going to magically start spreading around, that jobs will just appear, that all we have to do is do nothing and let the market fly free as a bird...well, you are going to be waiting a very long time.

    We have a rigged game.  It is in the process of trying to be rigged permanently.  "The government is not the solution, the government is the problem."  You won that argument, and the referee was bought off and weakened.  This is what we get.



    Magic math (1.00 / 0) (#32)
    by Slado on Tue Jul 05, 2011 at 07:58:46 PM EST
    I will never understand the magic math employed by some.  If the so called stimulus worked it would have worked only slightly if it wasn't big enough.   Instead it did nothing.  Exactly how big did it need to be?

    When does multiplication start to take effect in the magical world of Krugman?

    Either way my original point still stands.  Why it did't work is irrelevent.  It didn't.


    what's with the "we"? (5.00 / 1) (#26)
    by jondee on Tue Jul 05, 2011 at 02:53:17 PM EST
    We is nothing but a utopian, collectivist concept.

    I thought red America was on the same page in agreeing that the answer to our old-European-thought engendered malaise was for right thinking Americans to take personal responsibility for thier life choices? Considered in that light, the idea that "we" need to pay off "our" debt is nothing but another "social program"-- as are goals like a strong national defense, better roads and bridges and Michelle Bachman's abolish-the-minimum-wage movement. They're all based in the creeping collectivist utopian notion of improving the lot of "us" and "the nation"..

    And here I thought that we were for scaling back social programs.


    Stop trying to pigeon hole me (1.00 / 0) (#33)
    by Slado on Tue Jul 05, 2011 at 08:01:26 PM EST
    We are a we through no kind of social program.

    We are a we through simple black and white math.  We all on our own chose to ring up massive debt.   Now we all together can work it off or keep delaying the inevitable.

    No collective orginization necessary.


    Democracy is a "social program" (none / 0) (#38)
    by jondee on Wed Jul 06, 2011 at 05:20:16 PM EST
    the Constitution is a "social program".

    Quit pigeonholing yourself by trying to clever repeating back Rush and Gingrich's dogwhistles like "social programs".


    Simpler (none / 0) (#3)
    by jarober on Tue Jul 05, 2011 at 09:47:20 AM EST
    It's far simpler than that.  Over the last few decades, we've built up a huge amount of regulations - mostly well intentioned, but they've gummed up the works.  Consider:  It took the government 6 years to build the Hoover Dam, and 20 for the "Big Dig".  The Empire State building took just over a year; the replacement building for the WTC site hasn't really begun yet (a decade later).  

    NIMBY opponents now have the ability to tie things up in court forever.  Environmental activists can halt projects for years with various objections.  You might favor some (or even most) of that, but it definitely takes a poleaxe to any use of government money for short term stimulus purposes.

    Never mind the higher level discussion of whether infrastructure spending works for stimulus purposes; we can't even get there.  Projects now take so long to unfold that there's no possible way they can stimulate anything.

    If you want to fix that, you're going to have to start looking at the regulatory state that's been built up, and start seriously prioritizing.  Right now, we're just adding new layers of red tape.  

    Yes, we sure had too man financial regulations (5.00 / 2) (#5)
    by Dadler on Tue Jul 05, 2011 at 10:27:44 AM EST
    Good lord.  No enviro, no building code, NOTHING comes close to the REAL problem.  The problem is America is a giant unregulated CASINO.  The problem is we force everyone to play a RIGGED game.  

    If we had ANY effective financial regulations, none of this would've happened.  But America, it seems, loves money more than its own citizens.  Much more.

    We are a sick, dying nation right now, living in a kind of pathological and deadly denial that is staggering for a country or our supposed resources, both physical and intellectual.

    We have, in short, completely given up on having any kind of national imagination.  Selfishness is our guiding principle.


    Unregulated? (none / 0) (#6)
    by jarober on Tue Jul 05, 2011 at 10:39:09 AM EST
    If the country were largely unregulated, it wouldn't take forever to build anything.  It's stupidly regulated, not unregulated.

    Financial regulation does not exist (5.00 / 1) (#10)
    by Dadler on Tue Jul 05, 2011 at 10:46:04 AM EST
    And THAT is what got us into the mess we are in.  And we are now embracing the very things that got us here.

    Whatever other regulations you want to complain about, environmental, educational, any of them, they cannot even come close to doing the damage that our utterly unregulated casino economy has already done and will do again, since we seem incapable of facing reality.

    I have no doubt the two of us could find regulations that are stupid.  There is no way we could find any regulation, as I just said, capable of doing what our foolish and corrupt lack of oversight to the financial sector has done.


    Your Theory is Extremely Easy To See (5.00 / 4) (#14)
    by ScottW714 on Tue Jul 05, 2011 at 11:28:07 AM EST
    Find a very unregulated country and report back.

    Some that come to mind, Russia, China, pretty much all of Africa, and nearly every third world country.  Pretty sure low regulation is one of the criteria determining a countries status.

    Now find the most regulated countries.  
    Notice anything ?

    Stop while you are behind, we understand the point your making, and it's painful to read and so easily disproved.


    Sigh (none / 0) (#21)
    by jarober on Tue Jul 05, 2011 at 01:20:11 PM EST
    Note that I said "stupidly regulated".  There's a huge difference between "unregulated" and "stupidly regulated".  I'd like to see what we do now streamlined and redone from scratch, not restored to some 19th century libertarian fantasy.

    Please (5.00 / 1) (#23)
    by ScottW714 on Tue Jul 05, 2011 at 01:38:20 PM EST
    Name one regulation that is stupid you would change that would influence construction for the better.

    Just one.


    Well... (5.00 / 1) (#27)
    by jarober on Tue Jul 05, 2011 at 02:58:07 PM EST
    Davis-Bacon for one, to drop the costs from their current stupid heights.  I'm not intimately familiar with how Environmental Impact Statements work, but at present, litigation for that stuff can drag on for years.  Something needs to be done to make that entire process streamlined.  I'm not stating that these regulations don't have a purpose, or that they were badly intentioned.  What I'm saying is simpler: if you want infrastructure spending that might possibly be stimulative in its impact, you need to change the playing field such that money allocated now results in projects that start in the near term future.  If instead, they start many years down the road, they don't serve that purpose at all.  

    Instead of tossing talking points about my supposed desire to gut regulations, how about you actually read what I've said?


    Right....... (none / 0) (#39)
    by ScottW714 on Fri Jul 08, 2011 at 01:52:17 PM EST
    ... because America isn't building fast enough, all these delays are leaving our landscapes almost barron like.

    And what environmental regulations have been hanging up One TCW ?

    Which by the way is over half way completed vs your claim that it hasn't been started.  So I will assume you have no idea what you are talking about and we can leave it at that.

    And just for fun, that thing your using to spew you lies, the www & http portions of this address are governmental regulated protocols.  Ditto with the Wifi, Bluetooth, and probably 90% of the computer you are using.  Without them you would just be stuck and home watching... no those airwaves are regulate to.  So you would probably be sitting in the corner to scared to leave because the government is making public spaces safe.


    What if jarober thinks that (none / 0) (#25)
    by christinep on Tue Jul 05, 2011 at 02:39:13 PM EST
    "no regulation is a good regulation." That's the Koch & others who follow belief-system, apparently.

    Sure (5.00 / 1) (#13)
    by ScottW714 on Tue Jul 05, 2011 at 11:19:37 AM EST
    First, the WTC is over half way completed, and construction didn't start until 2006.  Pretty sure nearly all of the hold-ups had far more to do with sacred ground issues than regulations.

    The Big Dig tunneled under a city, they had to deal with tens of thousands of previous infrastructure systems, some of it from before we were even a country, including wooden sewer systems.

    Comparing a dam construction project of the 30's in the middle of nowhere, to one in the middle of NYC, or the sub-surface tunnels project, is weak and IMO disingenuous.  If you had the common sense to actually compare apples to apples, you would have realized this before you posted.

    A better comparison would be comparing WTC to current construction in less regulated countries.

    Hoover Damn - 6 years - 49 million
    Three Gorges Dam - 14 Years - 26 Billion
    Petronas Tower - 7 years - 1.6 Billion
    Taipei 101 - 5 years - 2 billion
    WTC Towers(North&South towers) - 3 years
    One World Trade Center - est 7 years - est 3 Billion

    I'm not seeing this correlation that you are claiming is so easy to recongnize.  I would add that 112 people died because of those lax regulations at Hoover.  And even though foreign projects don't report deaths, I would suspect that less regulation is easily correlated to construction deaths, but I can't prove it.

    I suspect the project itself has far more to do with time and cost than regulations.  And as far as Hoover, the complexity of the two are some completely different that I am baffled as to how anyone would ever think to pretend they are similar.

    And speaking of, how long did Miller park take after the crane toppled into it because the construction workers failed to meet wind speed regulations ?  Those regulations really gummed that project up...


    To be clear, what's your position on (none / 0) (#16)
    by observed on Tue Jul 05, 2011 at 11:59:27 AM EST
    financial regulations---too much, or not enough?

    Too much is my position (none / 0) (#18)
    by Slado on Tue Jul 05, 2011 at 12:10:07 PM EST
    All the regulations where in place.

    The real problem was there was bipartisan agreement on capital hill to look the other way and not enforce the rules.

    Madoff - SEC was handed the info on a platter and choose not to follow through.  Why?  Because Bernie was the wizard of Wall Street and no one wanted to stop the party.

    Fannie and Freddie - The lobbyists and congressional supporters bullied and pushed aroudn the regulators and fellow congressman if they even questioned their questionable practices.

    Debt consolidation - The Fed Chairman called for and demanded that government agencies look the other way under both democratic and republican presidents.

    My point is the regulations are meaningless if they're not enforced.  

    The right and the left make a mistake trying to pin this crisis and reality on one party or one issue.

    Greed both private and governmental led to the downfall.   Easy money, cheap profits and high tax receipts led all levels of government to look the other way while the bubble inflated.

    You could have regulated everything but when democrats, republicans and the chairman of the Fed step on the gas it doesn't matter what laws are on the books.


    All the regulations were in place (5.00 / 1) (#20)
    by Dadler on Tue Jul 05, 2011 at 12:54:54 PM EST
    All of them?  Every single one needed to prosecute this crime?


    The derivatives market is STILL regulated by fairies and spirits.

    I'll agree both parties are essentially worthless, but the paradigm that got us here, that of financial deregulation and no oversight, is NOT a progressive or left-wing paradigm in any way.  That there is no left or progressive force of any capacity left in this nation is another matter.

    We have regulations written in the weakest possible fashion, because the financial industry largely writes is own legislation when it comes down to it, and they aren't even weakly enforced.

    Our financial system, from top to bottom, is as corrupt and denial ridden as you can get. It is a completely rigged game.  We are all forced to play Monopoly, essentially, with people who control most of the money from the beginning, control most of the real estate, don't have to play by the rules, and never even have to go to jail.

    The whole thing is fetid.


    Why? (none / 0) (#34)
    by Slado on Tue Jul 05, 2011 at 08:07:12 PM EST
    Is it lack of regulation or will?

    I submit it's political will or more simply put "Crony Capitalism".

    Under Clinton and Bush the rules where set in order to benefit both Wall Street and Washington balance sheets.  

    How are these "Regulations" ever going to matter if both parties write and enforce them according to their own selfish needs.

    We actually agree when you think about it.


    I Hate This Argument (5.00 / 2) (#22)
    by ScottW714 on Tue Jul 05, 2011 at 01:31:50 PM EST
    To me anyone making that claim to me is being about as unclear as they can.  Never hear pro-regulation people make this arguement.

    It's one of the republican very subtle tricks. Instead of actually removing or changing current regulation/laws, they ignore or refund, like Wall Street circa GWB.

    Then when the consequences of those action come to bear, they claim there are actually regulations on the books no one is enforcing, so we don't need new ones, again Wall Street circa GWB.

    But for the rest of us, we see the obvious, the system in place isn't working, and if it's not working it needs changing.

    They pull this 'no one enforcing' non-sense on gun laws, mining regulations, financial laws and regulations, and just about any area that IMO needs strong regulation.


    Regulations (none / 0) (#35)
    by Slado on Tue Jul 05, 2011 at 08:11:33 PM EST
    Are only as good as the people who write them.

    When they are written to solve yesterday's issues and don't anticipate today's reality they are meaningless and worst case overly restrictive.

    Ultimately as I say they are meaningless when not enforced and even worse worse when they have no consequences as they didn't during the bailouts of 2008.


    then the issue is adequate enforcement (none / 0) (#29)
    by jondee on Tue Jul 05, 2011 at 03:15:04 PM EST
    NOT "too much"..

    Too much is nothing but standard Rush-spew, Rethug boilerplate -- and irrelevant to the discussion in light of the events of the last few years.


    Mostly stupid (none / 0) (#28)
    by jarober on Tue Jul 05, 2011 at 03:00:42 PM EST
    Right now, we have a suite of regulations that were written by the bank lobbyists.  Enough/not enough is the wrong question.  Smart/stupid is the better one.  I don't call it a win that we've created "too big to fail" banks that have private profits and socialized losses; it's crony capitalism of the worst sort that enriches political players (both parties) at the expense of the rest of us.

    Here here (none / 0) (#36)
    by Slado on Tue Jul 05, 2011 at 08:12:36 PM EST
    Ifnwe don't let capitalism run it's course them regulations are meaningless.

    I thought bank, big pharm, (none / 0) (#37)
    by jondee on Wed Jul 06, 2011 at 05:15:56 PM EST
    defense etc lobbyists writing legislation WAS capitalism running it's course.  

    Taylor's response was rather indecipherable (none / 0) (#11)
    by Dan the Man on Tue Jul 05, 2011 at 10:54:22 AM EST
    1st, he claims there are some "operational" problems with government actually government purchasing stuff: "But experiences from the 1970s raise serious doubts about the political and operational feasibility of such discretionary fiscal policy."  Presumably, he means that if the government spent 100 million dollars in buying swiss cheese for the poor, there would be some operational problem in having the government buy the $100 million dollars in swiss cheese.  I have no idea what that would be, but Taylor appears to believe there is some problem in doing that.

    2nd, his supposed problems with government spending are never mentioned in his own textbook - in fact it appears to say the exact opposite.   John Taylor (and Robert Hall), Macroeconomics, 5th ed.: pp. 190 ff.: "We now know that an increase in government spending... increases the interest rate and increases income.... [T]he increase in government demand increases GDP through the multiplier.... [But] interest rates must [also] rise to offset the increase in money demand.... This increase in interest rates will reduce investment demand and net exports and thus offset some of the stimulus to GDP caused by government spending. The offsetting negative effect is crowding out.... An expansionary fiscal policy will have a relatively strong effect on aggregate demand if interest rates don't rise by much [when government spending increases]..."

    Perhaps, Robert Hall wrote that part of his textbook, and Taylor disagreed with it, but Taylor acquiesed anyway?  Anyway, I hope Taylor amends his book in the next version so that readers don't get misinformed that "expansionary fiscal policy will have a relatively strong effect on aggregate demand if interest rates don't rise by much [when government spending increases]" as his own textbook says.

    3rd, as he mentioned, his own article says tax cuts didn't work, because "the tax cuts that made up much of the stimulus were probably largely saved."  But then he says the way to fix this is to "enact more permanent reductions in tax rates".  Presumably, he would say the Obama tax cuts were not permanent enough, and that was causing the problem.  But, of course, America is a (supposedly) a democracy.  No Congress can prevent a future Congress from changing taxes ie there are no "permanent" tax cuts.  The Fed is (supposedly) an independent body so it can make permanent policy changes and people might actually believe they're permanent.  Congress is elected by the people and it changes its policies anytime people change their mind.

    Later on Taylor says Congress could at "least pledge not to increase tax rates in a recession".  Well, members of Congress can say anything, but it doesn't help much if they're kicked out of office in the next election.  The only way people can believe tax cuts are permanent is if we eliminate democracy over fiscal policy in the US and let some independent board handle fiscal policy in the same way the Fed handles monetary policy.  But Taylor isn't willing to say he supports that.

    BTD - what do you think of this rather scathing (none / 0) (#12)
    by Dr Molly on Tue Jul 05, 2011 at 10:58:41 AM EST
    Frank Rich article on Obama and the economy?

    This particular critique of Keynesian simulus (none / 0) (#30)
    by RonK Seattle on Tue Jul 05, 2011 at 03:31:53 PM EST
    ... applies to the treatment of a typical post-WWII recession. Such a dip, is already turning the corner about the same time it is unequivocally detected in aggregate economic statistics; it is well into recovery by the time government agrees on corrective stimulus; and it has disappeared into the rearview mirror while government tiptoes awkwardly around the unpopular prospect of turning stimulus off.

    None of these concerns properly apply to the current case of a brush with 19th-century style depression.

    You (or Taylor) can acknowledge this critique's validity in the usual case, and its inapplicability in the unusual case, with no risk of intellectual inconsistency.