Maybe the only thing we have to fear is fear itself. But what about fatalism?
The two most recent entries in TNR's symposium on economics make two very different arguments, befitting their very different writers. The first, by Judge Richard Posner, suggests we are without reaslitic solutions to either our short-term problem (low growth) or long-term problem (high debt). The second article, by economist Stephen Rose, suggests that the short-term crisis isn't such a crisis after all -- that, despite slow growth and high unemployment, the economy is improving slowly and most Americans are coping.
Both articles are provocative and worth reading. But note the common theme: That government won't, or can't, fix the problems at hand. I disagree.
We have plenty of workable, proven ways to boost employment. The most obvious would be to give more money to state and local government, so they could stop shrinking their workforces and undermining private sector job growth. Posner, in particular, seems worried about the impact of such initiatives on the deficit. But it's not today's deficits that should worry anybody. It's tomorrow's. And those are a function of rising medical costs, to which a little stimulus would contribute nothing.
As for the political possibilities, those are indeed small. The Republican Party doesn't believe in Keynes and, as Rose rightly points out, it wields a veto over policy. But even the Republicans are subject to political pressures. (Remember how they were refusing to go along with financial reform?) And there are things the president can do without congressional approval. Will they solve the unemployment problem? Maybe not. But even modest initiatives could help a few hundred thousand people.