Mankiw: All That Talk About Tax Cuts and the Recovery is Goofy
Bill Sammon reports on the latest spin from the White House:
The White House says the economic surge that began five and a half years ago on President Bush’s watch is more robust than the much-touted expansion during the Clinton administration. “This is a much stronger expansion in a lot of ways,” White House spokesman Tony Fratto told The Examiner. “It’s much deeper and more measured.” Fratto’s assertion was disputed by Gene Sperling … That’s a rather absurd claim,” said Sperling, a senior fellow at the liberal Center for American Progress. “In terms of job creation, in terms of wage growth, in terms of business investment, in terms of poverty, there’s absolutely no comparison.” “The expansion during the 90s was exceptionally strong,” he said. “And this has been a historically weak expansion in virtually all of those measures.”
Greg Mankiw doesn’t challenge Gene Sperling on the facts so he decides to reply with this:
The discussion seems to presume that presidents have tight control over the economy. Of course, they don’t. The tools of fiscal policy are blunt, and there are many other forces at work that determine economic prosperity. Regardless of which expansion is better, it tells you little about the relative merits of the two presidents’ economic policies.
I agree – but doesn’t this suggest that all this talk about the tax cuts being the cause of the recovery is just goofy? As you read the rest of Sammon’s article, you’ll see even more goofiness including the line that Lawrence Kudlow is an economist.