Republican politicians behaved badly and Democratic politicians behaved well

Economist Brad Delong links to Ric Mishkin's How to Get The Fed Out Of Its 'Box' and writes:

I think pieces like Ric Mishkin's are much less useful than they could be, because Mishkin talks in a peculiar kind of code:

• When Mishkin writes: "[t]he Fed... could indicate that implementing measures that would promote fiscal sustainability will be rewarded with Federal Reserve actions to bring long-term Treasury rates down. Deals like this have been successfully made in the past..." he means: "Alan Greenspan and Bill Clinton and the Democratic Party did a very good thing back in 1993 when--over unanimous Republican opposition--they coordinated action to raise taxes, cut the future growth path of spending, and ease monetary policy."

• When Mishkin writes: "nonpartisan commission on entitlement reform, along the lines of the National Commission on Social Security in the early 1980s..." he means: "the Democratic Party then did a good thing in giving Republican President Ronald Reagan bipartisan cover to raise taxes and so reduce the damage to long run fiscal stability that he had done in his first year..."

• When Mishkin writes: "budget deficits naturally occur during severe recessions when tax revenue undergoes a substantial decline... fiscal stimulus to promote economic recovery when the economy is in a severe recession is a sensible prescription..." he means: "Republican root-and-branch opposition to Obama's stimulus plan is stupid and harmful to the country..."

Everyone who was around in 1982, or 1993, or 2001-3 (when Republicans were welcoming and expanding deficits as recession-fighting measures understands the code that Mishkin is talking in: that Republican politicians behaved badly and Democratic politicians behaved well, and it would be good for the country if the Democratic politicians were to step up to the plate and once again do the right thing for the country. But for some reason Mishkin won't say that in anything but the most elliptical of implicatory sentences.

It matters, I think, because until senior Republican presidential appointees like Ric Mishkin will call Republican politicians on their misdeeds--and cross the aisle in response--Republican politicians will continue to misbehave. And it is not clear the country can afford that.

Posted via web from Jim Nichols