Followups: Stewart's Evolution as Comedian-Moralist, Deficit Spending

[See 5:30pm UPDATE after the jump]

1) I mentioned yesterday Jon Stewart's donning of the Will Rogers mantle in his closing speech at the "Sanity/Fear" rally. Reader J.E. reminded me of this clip, below, of Stewart's first post-9/11 Daily Show broadcast. It is very interesting to see the continuities with and differences from yesterday's performance.

Yes, yes, everyone famous looks "surprisingly" young when you go back to see past footage. We'll soon feel that way about the lithe carefreeness of 2008-vintage Obama. In Stewart's case, beyond the physical changes over this nine-year span, you can see him just beginning his evolution into the role he now occupies. Comparing footage of the start and end of any President's term, we see a person who has gotten alarmingly older -- but also one who has, by the end, fully internalized the fact that he is the most powerful person in the world, but that his power has limits and comes with tragic burdens. He carries himself, by the end, with awareness that he has to make big decisions all day long and that, whatever he does, many people will be bitterly unhappy with him. In the contrast between this old clip of Stewart's and yesterday's on the mall you see a person who was just starting to work out a role as comedian/moralist and now has matured into it.

2) Yesterday on Weekend All Things Considered, I talked with Guy Raz about an odd moment in political economics. Raz pointed out that every economist he interviewed in recent weeks had stressed the need for increased stimulus to offset the slump in world demand. Yet the U.S. political campaign was dominated by fear of increased "deficits" -- ie, the fear of public spending.

I replied that, through most of the decades since the Great Depression, economists recognized that when private economic demand declined, "public demand" could offset the decline and make the recession/depression less damaging than it would otherwise be. This "public demand" could come from a combination of increased spending and decreased taxes, with advantages and drawbacks to each. I said that while economists differed on countless points, on the basic mechanical truism that public demand could offset failure of private demand there was "essentially no" disagreement among economists.*

Since then, many members of the Austrian school of economics -- adherents of Friedrich Hayek and people with allied views -- have written to note that they don't share this outlook. And of course they don't. An implication of the Hayek worldview is that increased government spending is almost always a threat, in economic, political, and all other ways. So the longer version of my answer would have been, "With the notable exception of members of the Austrian School, pure libertarians, and some others, there is remarkably little disagreement among professional economists around the world that in times of downturn, short-term fiscal stimulus and public spending can reduce the effects of a downturn."

* And, for instance, anyone who has looked at China's rapid recovery in the past two years has noticed the government's all-out stimulus efforts; and the debate about Britain's new government-spending cutbacks is what they'll mean for the recovery prospects of its economy -- and Europe's, and the world's.

UPDATE: Just now on the Sunday version of Weekend All Things Considered, Raz interviewed Peter Diamond of MIT, this year's Nobel winner in economics, on this same question. His answer was consistent with what other economists in this interview series have said. From the NPR summary:

>>The first part of Diamond's prescription is another jolt of federal help for state and local governments to keep their workers -- especially police and teachers -- employed.

"The layoffs from state and local government are first of all bad in and of themselves because a lot of what these people do is so valuable. But secondly, when [these people] become unemployed, they spend less and that cuts down the demand."

And Diamond thinks Washington needs to administer another dose of short-term spending, in areas such as construction....

Diamond isn't the only economist calling for more short-term stimulus, in fact almost every economist Weekend All Things Considered has talked to in the last few weeks echoes that sentiment...<<