Mitch McConnell gets lectured in The New Republic for his "economic ignorance" by a writer peddling a load of liberal crap:
On CNN’s “State of the Union” Sunday, incoming Senate Majority Leader Mitch McConnell said that Republicans in the 114th Congress will focus on blocking environmental and healthcare regulations: “We need to do everything we can to try to rein in the regulatory onslaught, which is the principal reason that we haven't had the kind of bounce-back after the 2008 recession that you would expect.” But that is exactly the wrong lesson to take from the slow recovery. Rather than laying the foundation for the GOP’s agenda, McConnell is betraying his ignorance on economic issues.
After the financial crisis struck, consumers cut back on their spending and businesses stopped investing. This created a shortfall in aggregate demand—people weren’t buying enough stuff. As consumers stopped buying goods and services, businesses were forced to fire workers, who then cut back their purchases—a vicious cycle. The government’s role is to fill the shortfall in demand, which it can do either through fiscal or monetary stimulus. We’ve done both in the past few years. The stimulus pumped hundreds of billions of dollars into the economy through targeted tax cuts and spending programs. The Federal Reserve cut short-term interest rates to zero to spur investment and used unconventional monetary policy tools like large-scale asset purchases to lower long-term rates. . . .
[. . .]
McConnell’s real sin Sunday was his belief that “regulatory onslaught” has been the “principal reason” for the slow recovery. Republicans have made this argument throughout the Obama presidency. If we would only cut government spending, eliminate red tape, and cut taxes for the rich, they say, the economy would thrive. The problem is that these are all supply-side solutions intended to increase productivity and prevent government from crowding out investment. Yet, the economy has faced a demand problem. The GOP’s job agenda, or what they call a jobs agenda anyway, does little to address it.
Excuse me, but isn't it just possible that there are both a supply and demand problem? Certainly demand went down as the financial crisis hit, which started the downward spiral the writer describes. But when demand is suffering, the last thing you want to do is discourage supply. If he doesn't think government actions like taxing and regulating affect supply, he's living in a fantasy land. Just consider one thing, the mdecial device tax used to fund paart of Obamacare. That threatens the supply, which drives up the cost, which further dampens demand. He quotes Paul Krugman with some enthusiasm, so you know this is not a "government should know when to just get out of the way" type of guy.
