Monday, December 29, 2008

"Never waste a crisis" 

James Pethokoukis points out something important about stimulus packages:
On one side you have the greenies who want to use our current economic crisis to promote their environmental agenda. And on the other side you have the "old economy," union-types who want to use our current economic crisis to attract hundreds of billions of dollars to union construction jobs. (And don't forget the local government officials with visions of bike paths and aquariums and duck ponds dancing in their heads.)
He quotes Rahm Emanuel saying that a crisis should never be wasted, lest one misses an opportunity to pass a bill with things that would never be accepted in calmer times.  Don't be so fast to think this bill is going to be ready for President Obama after Inauguration Day.  The "implementation lag" of fiscal policy is never short, yet again a good reason to rely more on monetary policy to carry out stabilization.