Not really. The Ministry of Finance pushed fiscal consolidation for 1997 and afterwards fiscal policy was never expansive. Monetary policy until the advent of a new head of the Bank of Japan in 2002 was very stop/start. Expansionary policy would be followed by credit tightening, ostensibly to prevent potential inflation. Only in the immediate aftermath of the bubble collapsing was there anything like expansionary policy. It wasn't a case of the policy elite's economists not having political clout.
Craig Freedman >>> Jim Devine <[email protected]> 02/09/09 3:10 PM >>> maybe this is what happened in Japan. The policy elite's economists knew what to do when _their_ bubble economy popped, but they didn't have the political clout to pull it off. On Sun, Feb 8, 2009 at 6:22 AM, Louis Proyect <[email protected]> wrote: > Paul Krugman - New York Times Blog > February 7, 2009, 5:36 pm > What the centrists have wrought > > I'm still working on the numbers, but I've gotten a fair number of requests > for comment on the Senate version of the stimulus. > > The short answer: to appease the centrists, a plan that was already too > small and too focused on ineffective tax cuts has been made significantly > smaller, and even more focused on tax cuts. > > According to the CBO's estimates, we're facing an output shortfall of almost > 14% of GDP over the next two years, or around $2 trillion. Others, such as > Goldman Sachs, are even more pessimistic. So the original $800 billion plan > was too small, especially because a substantial share consisted of tax cuts > that probably would have added little to demand. The plan should have been > at least 50% larger. > > Now the centrists have shaved off $86 billion in spending — much of it among > the most effective and most needed parts of the plan. In particular, aid to > state governments, which are in desperate straits, is both fast — because it > prevents spending cuts rather than having to start up new projects — and > effective, because it would in fact be spent; plus state and local > governments are cutting back on essentials, so the social value of this > spending would be high. But in the name of mighty centrism, $40 billion of > that aid has been cut out. > > My first cut says that the changes to the Senate bill will ensure that we > have at least 600,000 fewer Americans employed over the next two years. > > The real question now is whether Obama will be able to come back for more > once it's clear that the plan is way inadequate. My guess is no. This is > really, really bad. > _______________________________________________ > pen-l mailing list > [email protected] > https://lists.csuchico.edu/mailman/listinfo/pen-l > -- Jim Devine / "Disbelief in magic can force a poor soul into believing in government and business." -- Tom Robbins _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
