Ben Stein, last week, was all in favor of the government spending vast amounts of money.
A truly serious stimulus package is very much in order. It has to be big enough and last long enough that Americans do not just sock it away under the mattress. We cannot nickel-and-dime our way out of this. The inflation threat is small in an economy in full credit-collapse mode. There is virtually no dose of stimulus that is too much in an economy as shellshocked as today's.
This week, however, he's not at all sure that the government should embark on projects which will "cost some real money":
Will the new administration be prepared to require that public works employees be union members? If so, of what union?
No matter how this is handled, someone will be unhappy. It will cost some real money if they are union members, and will cause some anger if they aren't. Business won't like it if wages rise in an area where it has flourished with low-wage workers.
It's quite astonishing, what Stein can contrive to be worried about when it comes to a stimulus package. He's saying that such a package might be spent on public works. And if it's spent on public works, the employees might be unionized. And if the employees are unionized, they might get paid more. And if they're paid more, wages generally might rise. And if wages generally rise, that might hurt other businesses' profit margins. That's four "ifs" and five "mights" right there -- all for the seeming purpose of worrying about a world in which the Obama administration has magically solved the problem of rising unemployment. (Never mind, of course, the fact that most businesses actually like it when their customers earn more money, or the fact that most normal people consider a pay rise to be a good thing, or the fact that any area which competes on the basis of "low-wage workers" has much bigger things to worry about, in this age of globalization, than federal public-works projects.)
Stein's also weirdly grumpy about the choice of Tim Geithner as Treasury secretary, even though he is "the world's most ardent fan of Paul A. Volcker and Lawrence Summers". Maybe he should ask Volcker and Summers what they think of Geithner -- but no, he's already decided that Geithner is "the pre-eminent careerist of old-time finance":
In what sense is he "change you can believe in"? How is he part of the solution, not part of the problem?
It might be instructive, here, to remind ourselves of George W Bush's choices of Treasury secretary. First there was the former CEO of Alcoa (AA), then there was the former CEO of CSX, and finally there was the former CEO of Goldman Sachs (GS). All of them businessmen who had become hugely wealthy in the private sector before being charged with taking that experience and applying it to the economy as a whole.
Does Geithner represent a significant change from that pattern? Absolutely, yes: He's been in public service for essentially his entire career. We now have the regulator, not the regulated, in charge: the gamekeeper, not the poachers. He might be a careerist, but only in a Washington sense: He's never accepted any of the high-paying private-sector job offers which have undoubtedly come his way.
Stein then starts attacking the idea of public works as an intelligent way to spend a fiscal stimulus, without giving any indication of what might be a better alternative. I suspect he's thinking a policy of tax cuts -- a blunderbuss which will have no legacy of improvements to national infrastructure and which would be very difficult to target in a strategic way.
Stein ends off by implying that Ben Bernanke is being influenced by the appointments that Obama has announced to date:
Mr. Obama will have some fine economists on his staff, including Mr. Summers, the powerful Mr. Volcker and Christina D. Romer of the University of California, Berkeley. They can help figure out what works and what is fantasy. Already, their waiting in the wings is jolting the current administration's team into a giant-sized monetary stimulus.
Ah, wait a minute, I think I understand what Stein's issue with Geithner is: He's not an economist. (Well, he does have a Master's in International Economics and East Asian Studies, but never mind that.) Stein fancies himself an economist, remember, and that probably explains why he loves Summers so much yet has so little time for Geithner -- a man who worked hand-in-hand with Summers during the latter's tenure at Treasury.
In any event, Stein declares, after admiring all these fine economists, that he has "hope" for the Obama administration. Which is one endorsement I'm sure they all could do without.