Economists Who Make the Third Stimulus Honor Roll

The country is experiencing the worst economic downturn since the Great Depression. The economics profession bears part of the blame – almost the entire profession was unable to see an $8 trillion housing bubble. Even as the unraveling of the bubble began to throw the economy into recession, economists were slow to recognize the need for a strong response from the government to boost the economy.

This failure of the economics profession allowed the first stimulus, passed during the Bush administration in February of 2008, to consist of a relatively modest tax cut that provided limited benefit to the economy. Congress passed a considerably larger stimulus in February of 2009, but one that is still far too small to address the severity of the downturn.

Congress will be more likely to move on a third stimulus when economists recognize and speak out about the inadequacy of the second stimulus. In an effort to promote forward thinking by economists, and challenge those who have not yet faced up to the severity of the current recession to examine economic developments more closely, CEPR is keeping an honor roll of economists calling for a third stimulus.

Below are two lists of economists - the first includes those economists who publicly and explicitly stated that the second stimulus, the American Recovery and Reinvestment Act, was too small. The second list shows those economists who have called for a third round of stimulus to boost the economy.

We encourage people to add to or correct this list in the comment section below, ideally with the following information: name of the economist, date they first stated that the second stimulus was too small or called for a third stimulus, and appropriate reference.

...
written by John F. McGowan, May 29, 2009

You may wish to include Robert Shiller of Yale and Irrational Exuberance (the book) fame to your list.

See his article Depression Lurks Unless There’s More Stimulus: Robert Shiller on the April 15, 2009 Bloomberg:

http://www.bloomberg.com/apps/news?pid=20601110&sid=abXAaO4xI704

Sincerely,

John

...
written by Alan B. Barber, May 29, 2009

Thanks for your suggestion and citation John! We've added Shiller to the list.

Balance?
written by Paul Thiel, May 29, 2009

Do you have any balanced views from economists who were against the stimulus? Or perhaps from economists who thought the stimulus money was squandered?

Seems as though you might be letting us down with a failure to examine all perspectives.

-4

Third stimulus
written by Carol, May 29, 2009

I don't know if anyone has noticed that the TARP stimulus of $700 B went to a few thousand very wealthy people, and the second stimulus of approximately the same amount was supposed to take care of the millions left behind. We need a real stimulus, and we need to wrench that money away from those folks (or at least start ignoring the economy they have created). If we have a 3rd stimulus, I am all for making it huge and to benefit everyone, to create an alternative economy that those global industrialists can't share in, if only because they are the face of the past:megalopolies with no direction except profit. Welcome to the future: lots of small enterprises with a solid social network, and all globalized by the internet, cloud computing and social networking.

All the banks and financial institutions are offering us is more of the same. No alternative thinking, no future. They are the dodos and it is time for the people to tell them so, one way or the other.

Can we add Minsky posthoumously?
written by matt, May 29, 2009

If things aren't done differently and soon, our kids, not our grandkids, but our kids and many of us will be here to see the final act when the house of cards finally comes down.

The paucity of the current response is staggering and allowing those who had a hand in the debacle to "fix" things portends poorly for the future.

With what do you stimulate?
written by SeattleBruce, May 30, 2009

The problem is that the federal government, and 47 of the state governments and the consumers are badly in debt. With what do you stimulate? If in true Keynesian fashion, the government had run surpluses as much as deficits in the past 75 years, perhaps we wouldn't be in this bind. I agree with other posters - this is a HOUSE OF CARDS. We must tighten our collective belts and let the free markets invisible hand take its course. We will all be better off if we do this - as opposed to spending money no one has to spend.

-2

Invest in the real economy, not Wall Street's paper economy.
written by John Casper, May 30, 2009

Wall Street used financial derivatives and credit default swaps sucked all the capital out of the real economy. Now that their paper bets have collapsed, they want us to bail them out with our money. Responsibility is for the little people. We need to stop pouring money into insolvent banks through loans and guarantees. We need to audit the Fed and we desperately need a third stimulus.

Ms, Low-rated comment [Show]

co-editor, Dollars & Sense
written by Chris Sturr, June 03, 2009

Thanks for putting out this honor roll.

Several economists have argued in the pages of Dollars & Sense magazine for a larger stimulus:

Randy Albelda of the UMass-Boston, in Bail Out the Safety Net," in the January/February issue of Dollars & Sense (http://www.dollarsandsense.org...belda.html)

Gerald Friedman of UMass-Amherst, in "Pushing on Strings," in the May/June issue (http://dollarsandsense.org/arc...edman.html)

Alejandro Reuss of UMass-Amherst (in "Fiscal Policy and 'Crowding Out'," in the May/June print edition of Dollars & Sense

Arthur MacEwan of UMass-Boston, in "Why Are Things Getting Worse?" in the March/April issue (http://dollarsandsense.org/arc...cewan.html).

Property Assessment Aide
written by Dan in Madison WI, June 15, 2009

Michael Hudson
Advocating balance of payments reductions through defense budget reduction:

http://www.michael-hudson.com/articles/globalism/090614De-DollarizationDismantlingEmpire.html

not really a direct stimulus argument, though.

Hudson is great
written by liberal, July 08, 2009

Dan,

Thanks for the link to the article by Hudson.

He's the only visible economist who understands both the nature of Ricardian land rent, its role in the crash, and the credit system.

Andrew Samwick
written by Ken Houghton, July 08, 2009

He's very clear about the need for more (it's the bloody title of the post), and certainly appears to be arguing that both #1 and #2 were Too Small.

http://capitalgainsandgames.co...e-stimulus

...
written by Economist, July 08, 2009

name of the economist: Stephanie Kelton
date they first stated that the second stimulus was too small or called for a third stimulus: June 29, 2009
reference:
http://neweconomicperspectives.blogspot.com/2009/06/why-stimulus-isnt-working.html

...
written by Economist, July 08, 2009

name of the economist: L. Randall Wray
date they first stated that the second stimulus was too small or called for a third stimulus: July 7, 2009

reference:
http://neweconomicperspectives.blogspot.com/2009/07/carnage-continues-time-to-ramp-up.html

...
written by Economist, July 08, 2009

name of the economist: Pavlina R. Tcherneva
date they first stated that the second stimulus was too small or called for a third stimulus: July 2, 2009

reference:
http://neweconomicperspectives.blogspot.com/2009/07/bring-stubborn-unemployment-numbers.html

Do "Oracles" count?
written by Jlvngstn, July 09, 2009

Buffett has called for another....

http://www.cnbc.com/id/31831401

...
written by Alan, July 09, 2009

@jlvngstn
For the purposes of the Honor Roll, its just economists.

____
written by just me, July 09, 2009

Isn't it time finally let go of the convention, that all money have to be issued as a debt?

Is it some sort of a heresy to say that? I haven't seen that kind of argument anywhere. Surely many people must be thinking about it.

How about an "Anti-Stimulus Honor Roll"?
written by Senior Economist, July 10, 2009

If you're truly objective and unbiased, then you should add to your site an "Anti-Stimulus Honor Roll."

Who knows, maybe for every Economist that supports a third stimulus, there will be 3 that oppose it?

Economics Faculty and Chair, Social Sciences at Sarah Lawrence College
written by Jamee Moudud, July 10, 2009

I think one needs to be clear about what "more stimulus" means. I advocate the need for capital budgeting (as Keynes, Harrod, and others argued)in which a surplus on the current budget (created by higher taxes on the wealthy) would finance a long-term public investment program (perhaps in "Green Energy" projects etc.). I am not a great advocate of paying people to dig up holes and having them fill them up again. Rather public investment spending should be targetted and productive.

List update
written by Economist, July 10, 2009

name of the economist: L. Randall Wray
date they first stated that the second stimulus was too small: March 2009

appropriate reference: http://www.levy.org/vdoc.aspx?docid=1123
and here
http://www.levy.org/download.aspx?file=ppb_99.pdf&pubid=1123

Have you considered adding a column...
written by R.M. 'Auros' Harman, July 12, 2009

...listing people's titles and honors? e.g. "Member of CEA under Ronald Reagan, Professor at Princeton, Nobel Prize Winner" for Paul Krugman. His name is obviously very well known, but some of the others listed are not as recognizable.

Roubini
written by geoffw, July 21, 2009

Nouriel Roubini, about 7:30 into this interview:
http://www.cnbc.com/id/15840232?play=1&video=1188999175