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Tuesday, April 29, 2008
Legislative Means to Address Economic Conditions
Too Slow for a Slowdown?
In The Checks Are Coming! The Checks Are Coming!, Stan Collender questions the efficacy of legislative measures to stimulate the economy in the short-term.
He argues that, regardless of the relative bang-for-the-buck of certain measures as opposed to others, all such measures are too slow to be effective -- not because checks or unemployment insurance boosts or food stamps are slow to work, but because the legislative process and the operations of government are themselves too slow. Witness the three months it's taken for Treasury to get the checks out the door that Congress and the President agreed to in February.
Barring legislative action providing short-term boosts to the economy, where can we turn to address oncoming recessions? Depends what you mean by "we." Unless you are the president or maybe Treasury Secretary, lots of luck to you in negotiating the requisite monetary policy with the Federal Reserve Bank. The Fed, by design (by congressional design, ironically) operates without the consent of the governed. And monetary tools are far less flexible and targeted than fiscal ones, however rapid and powerful they may be.
Maybe the solution is, as Collender suggests, improving the operations of government so that Treasury and the other agencies pre-automate legislatively (i.e., democratically) mandated means of addressing the particularities of the slowdown or recession in question.
Posted by Dana Chasin
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