Saturday, June 14, 2008

Blumneconomics VI

That piñata of The St. Petersburg Times, Robyn Blumner, is back swinging from the twine with her vulnerable underbelly exposed.

Democratic shill that she is, Blumner is once again extolling Democratic economic policies, this time by repeating the thesis of liberal economist Larry Bartels of Princeton. Bartels, as Blumner tells it, says that Democratic presidents cause real income to rise for working folks.

Blumner doesn't bother telling you that Bartel's thesis is widely questioned, even by another of her liberal economist heros, Paul Krugman. And why should she tell you? Her purpose in writing isn't to help you learn about economics. She doesn't know a lick about economics anyway, so there's not much she could tell you in the first place.
So what does this all mean?

Inflation is good for the poor in the short run, since many poor are debtors. But inflation is bad for the poor in the long run. Just ask anyone who lived through the New Zealand inflation of the 1970s.

So Bartels could have entitled his key graph: "Democratic Presidents live for the short run and we need a Republican President every now and then."

(Marginal Revolution)

Put another way, Democrats pander to their key constituencies, and the associated policies do have short-run effects on working wages. Alex Tabarrok at Marginal Revolution, in a different post, tells of a business cycle theory that has long been invoked to explain the numbers.

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