First Rule of the Stimulus, Do not Talk About the Stimulus

I’ve been a little slow at updating the blog lately, so here a few posts ideas I have been meaning to write

So last Friday I went to see Fight Club. In Fight Club there is a strong anti-consumerist message. Instead of buying IKEA, Tyler Durdin (Brad Pitt’s character) thinks we should go back to farming and hunting. I was going to write a post about how if all the sudden we all joined a Fight Club and purchased fewer house hold goods it would hurt the economy and our faces.

In some ways a recession does the same thing. Instead of changing our attitudes about consumption because of an ethos some people might not spend as much because they are worried about losing their jobs. To combat this a local apartment complex is offering:

“If you involuntarily lose your job for any reason while in a lease agreement with us, we will WAIVE all termination fees if you decide to leave. “

So how do we solve the problem. Perhaps ask an economist, Gregory Clark points out that many economists have no idea what’s going on. After he asked one economist signatory of a NY Times letter against the stimulus to debate the stimulus with a proponent the signatory replied:

"all I know on this issue I got from Greg Mankiw's blog -- I really am not equipped to debate this with anyone."

I feel the same way, that I’m not equipped to debate the stimulus, although I do read more blogs. But what I can do is teach some Econ 101 concepts that Gregory Clark points out are at the center of the debate.

So tomorrow I’ll explain why using Econ 101, I don’t think debt forgiveness is the way to go.