Something Not Always Better than Nothing

Megan McArdle:

Let’s say that TARP proponents are right and that some program to pump a great deal of money into banks is better than just letting them fail. It does not then therefore follow, as night to day, that this package–or any politically feasible package–is better than nothing. It can be true that Ideal>0 without being true that 1/2ideal+compromise>0.

That, of course, presumes that “better” is definied as “helping fix the economy” rather than “helping politicians get re-elected.”   Politically, doing anything is better than doing nothing.

Economically, Megan’s no doubt right.  Especially since nobody, not even the indispensible Timothy Geithner, has the slightest clue how various attempts at stimulus will actually impact the gigantic chaos that is our global economy.

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James Joyner
About James Joyner
James Joyner is Professor and Department Head of Security Studies at Marine Corps University's Command and Staff College. He's a former Army officer and Desert Storm veteran. Views expressed here are his own. Follow James on Twitter @DrJJoyner.


  1. Dave Schuler says:

    However, what’s politically necessary is just as real as what’s economically necessary. That’s why I believe that the right solution is the smallest stimulus plan that will convince voters that our politicians are doing something and composed nearly entirely of the measures that are the easiest to administer, have the shortest lead time, and are most likely to be spent.

    Unfortunately, the Senate has seemed more inclined to cut those things than the items that are least likely to have any real near term impact on our recession, e.g. the budget items formerly known as earmarks.

    Maybe we ought to create some sort of symbol for them so we don’t need to give them a name at all.

  2. Steve Verdon says:

    Would she make up her damned mind for crying out loud. Or was she for TARP before she was against it?


  3. odograph says:

    Two people might support “the best plan Congress can manage,” but even then one could be an optimist, the other a cynic.

  4. Being a master of the universe isn’t everything it used to be, I guess.

  5. Drew says:

    “However, what’s politically necessary is just as real as what’s economically necessary.”

    Which is why guys like me who believe government can do little good here, and perhaps much bad, and can grouse with the best of’m about it…..need to understand we are pissing up a rope and take the least bad option as a concession to political reality. DS seems correct: solve for the least amount of damage that gets us through politicalworld.

    Heading for the shower now…

  6. Steve Verdon says:

    I’ll add to what Drew said and point out, once again, that is indicates a fundamental failing in our leaders. Why people look to them for salvation baffles me, but then again I’m not religious either.

  7. odograph says:

    Remember that the banking thing is still ahead of the stimulus, and can blow up even bigger.

  8. steve s says:

    All quotes from 2008:

    George Will: “this imaginary recession…”

    Phill Gramm: “This is a mental recession…”

    John McCain: “The fundamentals of the economy are strong…”

    Republican National Congressional Committee: “Thanks to Republican economic policies, the U.S. economy is robust and job creation is strong.

    Republican tax cuts are creating jobs and continuing to strengthen the economy”

    So basically, and in accordance with how the last 8 years turned out, I would just find out what the GOP wants to do, and do the opposite. Since they’re against the stimulus, it’s pretty clear that it’s the right thing to do.

  9. James Joyner says:

    So basically, and in accordance with how the last 8 years turned out, I would just find out what the GOP wants to do, and do the opposite. Since they’re against the stimulus, it’s pretty clear that it’s the right thing to do.

    Well, there’s such a thing as self-fulfilling prophecy. I have no doubt that much of the current downturn is real. But years of wailing about housing bubbles and irrational exuberance take their toll. Not to mention ridiculously premature exclamations of “greatest economic disaster since the Great Depression.”

  10. odograph says:

    James, that is the least reality-connected thing you have said in a while.

    “wailing about irrational exuberance” … as opposed to believing that prices really do always go up?

  11. odograph says:


    ‘ridiculously premature exclamations of “greatest economic disaster since the Great Depression.”‘

    as opposed to “wrong”? Those bad guys, saying the truth too early.

  12. odograph says:

    Ouch! Someone has moved the ball further down the field for you James:

    In an extraordinary admission about the severity of the economic downturn, Ed Balls even predicted that its effects would still be felt 15 years from now. The Schools Secretary’s comments carry added weight because he is a former chief economic adviser to the Treasury and regarded as one of the Prime Ministers’s closest allies.

    Mr Balls said yesterday: “The reality is that this is becoming the most serious global recession for, I’m sure, over 100 years, as it will turn out.”

    I don’t believe Mr. Balls is a Democrat.

  13. James Joyner says:

    I’m not blaming the Democrats, just irresponsible leaders in general. Constantly sounding the alarm bell worsens the problem.

  14. odograph says:

    I really don’t think it is concentrated in the pol’s. We are a social species. We have crowd movements on the way up, and the way down. That’s what Robert Shiller’s book (Irrational Exuberance) was all about.

    What I don’t like is this seeming idea that we can take the good half of the crowd response (the bubble) and then decry the obvious result. Bubbles don’t last. That’s what makes them bubbles.

    It is NOT because a politician came out of his house one morning and said “look, a bubble!”

    (Shorter: If more people had remembered to fear bubble, THEN this never would have happened.)

  15. odograph says:

    (Remember, Greenspan while cautioning against irrational exuberance in some things, also called the housing prices “froth” and not a bubble, because “there had never been a national bubble.)

  16. Drew says:

    Follow up – re: economics vs political realities
    From Mankiw:

    Let me reply by quoting Milton Friedman:

    The role of the economist in discussions of public policy seems to me to be to prescribe what should be done in light of what can be done, politics aside, and not to predict what is “politically feasible” and then to recommend it.
    permanent link

  17. odograph says:

    I think the sad truth is that macroeconomists can only be half-believed … if that.

    (Note, I guarantee anyone who pops up to say that macroeconomists can be believed will not be making the general case, but will have a short list of macroeconomists to really believe.)

    ((Tyler gets scary again))