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Home Liberty News

It Is Not the Aggregate Demand, Stupid!

by Liberty Pulse
12/08/2011
in Liberty News
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It Is Not the Aggregate Demand, Stupid!

According to Obama’s leading economic adviser, the current double-digit unemployment rate is obviously due to a “shortfall in aggregate demand.” Indeed, former UC Berkeley professor Christina Romer even told the Wall Street Journal that, until her chief of staff advised her not to, she intended to title a recent speech “It’s Aggregate Demand, Stupid.”

And just as obvious to her is the remedy that follows from this diagnosis: aggressive government stimulus should help small banks and bankrupt states of the union overcome their lack of liquidity.

How such policies can be made consistent with the present administration’s post-spending-binge promise of budget discipline is, of course, still unclear. In fact, the only ” obvious” thing about such a diagnosis and prescription is that they are very useful to the Obama gang. First, they make the market’s animal spirits responsible for the current mass unemployment, thus excluding that it may very well be a consequence of the left-liberal path followed since 2008. Second, it even helps advocate making more of the same errors, and gives a great excuse not to get fiscally reasonable and to extend government power…

Read Article Here…

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