Dean Baker, Dean Baker redux, and Dean Baker tri-dux (I don't know what redux three times would be)

Who Is Philosophically In Favor of Restrictions and Requirements That Hamper Economic Activity?

The NYT tells us that President Bush and Treasury Secretary Paulson are philosophically opposed to such restrictions, so presumably there must be someone who philosophically favors them, although the article does not identify anyone in this category.

As a general rule, it is probably reasonable to assume that most people are philosophically opposed to regulations that they perceive to be harmful to the economy. The differences arise over which measures they perceive, or claim to perceive, as being harmful.

More Philosophy from Politicians

The Washington Post joins the NYT in presenting the political philosophy of President Bush on Easter Sunday, telling us that the president's back seat in the Wall Street bailout efforts is "a matter of principle."

Sure, maybe the president has developed a carefully thought out economic philosophy, but let me suggest an alternative hypothesis. The financial industry gives much of its money to Democrats (ever hear of Robert Rubin?), unlike the oil industry, the defense industry, or the pharmaceutical industry. It's just possible that President Bush is not as eager to come to the aid of the Wall Street big boys as he is to come to the aid of other industries because they back the Democrats.

I don't know President Bush and don't know the real motives for his actions. But, I also don't believe that the Washington Post knows the real motive for his actions. Therefore, I would recommend that they just put the possibilities on the table and let readers decide for themselves whether politicians are acting based on political considerations or are guided by some underlying philosophy.

Btw, the main feature of the $300 billion housing price support program mentioned in the article, which is backed by Senator Chris Dodd and Representative Barney Frank, is the government purchase or guarantee of up $300 billion of bad mortgage debt held by banks and other investors. It would also allow for the renegotiation of loans for homeowners, but many would still be paying far more in ownership costs than they would to rent the same home, and would still have almost no hope of ever acquiring equity in the home.

The Ill Informed Is Learning: The Recession Will Be Bad

USA Today tells us that: "It's been almost an article of faith: Any recession this year will be mild and brief."

That may have been an article of faith from those who get their economic outlook from tea leaves and other mystical processes, but those of us who rely on economic data knew that a downturn was likely to be very bad and said this quite clearly.

It is unfortunate that reporters relied almost exclusively on ill-informed economists as their sources during the run-up to the recession. Remarkably most articles on the economy, including this one, continue to rely almost exclusively on economists who were surprised by the economy. While their statements of surprise can make interesting reading, it would also be useful to include the views of economists who were not surprised by the economy.