Friday, April 10, 2009

WIST of the day 

WIST = Wish I'd Said That. Today's hero, Price Fishback in Q&A on the stimulus package at the Council on Foreign Relations:
There seems to be a little bit of disconnect. The government has always built roads, it's always built infrastructure and things like this. I think the point that Ellen's trying to make in this context is if you're expecting it to be a big stimulus, it's not that -- it's not going to be a huge stimulus, but if you build these roads and bridges and things along these lines on the basis of what their cost and benefits look like, that makes a lot of sense to do that.

So the big question is can you move them up or move them forward? Does it make sense to actually build something that's not worth the money to do it? And what she's saying, what a lot of people are saying is no, it doesn't make sense to build a bridge to nowhere. It makes sense to build the right projects, but don't expect that you're going to get some huge extra stimulus behind it.
A couple years ago I read "ten little words" from Peter Gordon on applied economics: 1) at what cost? 2) compared to what? and 3) how do you know? Applied to the stimulus package, Fishback reminds us, you can add two questions (not so succinct, alas): 4) Do we have $787 billion of programs that you can move forward that add benefits to the economy? and 5) Did ARRA select them? I don't have an answer to 4) and I'm pretty sure the answer to 5) is 'no'. Your mileage may vary, but I find the rubric created quite helpful in organizing my thoughts on stimulus.

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