The writer who brought us the image of Goldman Sachs as a giant vampire squid is at it again, this time with a verbal takedown of the Obama Administration's economic team.
Good for him. And even if you're willing to give folks like Tim Geithner and Larry Summers the benefit of the doubt, as I once was, their arguments no longer make much sense even on their own terms, as Brad Delong pointed out on Thursday.
So forget Matt Taibbi for a moment and check out DeLong's post about a piece by Noam Scheiber in the The New Republic. An unnamed administration figure who based on this puff piece might well be Summers himself says almost in the same breath that significant new stimulus spending would be ineffective because, on the one hand, interest rates would rise to offset it, and on the other hand, investors would anticipate the tax increases required to finance it and reduce their spending accordingly. Huh? How can both propositions be true at once? Answer: They can't, as Scheiber himself admits in a response to DeLong's post.
This sort of coherence has caused DeLong to go off before, and me to follow, and the U of Cal economist and former Clinton Treasury official does an admirable job of doing so again. I would only add that the fact that this argument is coming directly from the Obama administration suggests a) that Summers' intellect is vastly overrated or b) that Summers is a highly cynical fellow who's willing to resort to pure sophistry to avoid doing what Wall Street and its allies do not want him to do.
Either way, you don't have to agree with Taibbi to dislike what you see here.