WSJ on no more stimulus

The Wall Street Journal surveys 54 economists throughout the year. The latest results show that most economists in their survey suggest waiting. I can’t imagine this is a particularly random sample of economists, given the WSJ. Make sure you click through the charts because somebody in information presentation did some beautiful work here.

My super-smart economist colleague, Richard Green, disagrees, and then goes on to explain why the plan to help out distressed mortgage holders is also too timid.

Caveat: The following are mostly my impressions–I don’t have research that backs me on these ideas.

I’ve always maintained that the stimulus would disappear like a stone into water–and I think a second would do the same– and I am less sanguine about the rebound effects than the wait-and-see guys polled by the WSJ. I’m not sure where this “mother of all joblessness recoveries” is coming from. The transportation sector is, of course, happy to suck up as much money as we throw at it. I wonder about this sector as a source of growth anyway. Public transit advocates widely claim multiplier effects of investing in public transit, but in terms of construction, I bet the sector has become even more capital-intensive over the past three decades than just about any other. And if travel is ubiquitous, as it is in many places, the idea that you will open new markets with infrastructure investment doesn’t hold water–not that the way it did back in 1930. If that’s the case, the money goes to the contractors and, to a much more limited degree, to skilled workers. I don’t see contractors really doing anything besides sitting on those gains for awhile, which might provide some cash for other sectors. Maybe. But getting that money into the hands labor through job creation? I don’t see it happening. What I see instead coming are massive government layoffs, adding to joblessness rolls.