The White House Finally Explains Keynesian Economics

Larry Summers gave an interesting speech yesterday defending and explaining the White House's economic policy at the Johns Hopkins School of Advanced International Studies (SAIS). His thesis was classic Keynesian economics: "Appropriate short-run expansionary budget policy can make an important contribution to establishing the confidence necessary for sound growth," Summers said. In other words, deficits are good, for now, because heavy public spending in downturns is still required to juice long-term growth. Good for the administration for making that argument explicitly.

The Washington Post's Dana Milbank attended the speech. He chose to focus on the idea that Summers was being obtuse and boring:

It was the language of the PhD thesis: "Conditions for fiscal policy to have an expansionary impact are especially likely to obtain . . . considerations militating in favor of sustainable budgets . . . the ultimate consequences of stimulus for indebtedness depend critically on the macroeconomic conditions."

So, look. Milbank writes mainstream political columns that stir snark and analysis into something distinctive and popular, and that's his thing, and more power to him. But come on. This wasn't a major public address. It was a speech by a brilliant economic wonk to a graduate school for advanced degrees in government and international affairs. If Summers had stopped to explain to second-year Masters students the definition of a "multiplier effect" or a "catalyzing investment" (other terms Milbank mocks Summers for using), it frankly would have come off as pedantic.

Economic messaging is really important, and Milbank is right that the administration is still seeking a messenger mixing the panache of Austan Goolsbee with the gravitas of Summers. But it's unfair to bash Summers for speaking over the heads of "Americans worried about finding or keeping a job" when it's perfectly clear that his actual audience was much worried about getting an A in Advanced Topics in Monetary Theory.

Presented by

Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

Riding Unicycles in a Cave

"If you fall down and break your leg, there's no way out."

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register.

blog comments powered by Disqus

Video

Riding Unicycles in a Cave

"If you fall down and break your leg, there's no way out."

Video

Carrot: A Pitch-Perfect Satire of Tech

"It's not just a vegetable. It's what a vegetable should be."

Video

An Ingenious 360-Degree Time-Lapse

Watch the world become a cartoonishly small playground

Video

The Benefits of Living Alone on a Mountain

"You really have to love solitary time by yourself."

Video

The Rise of the Cat Tattoo

How a Brooklyn tattoo artist popularized the "cattoo"

More in Business

Just In