Christina Romer apparently doesn’t keep tabs on Krugman’s blog. She often refers to the jump in GDP after the election of FDR as a sign that stimulus spending works–even though Krugman has, on at least two separate occasions, specifically used this “hypothetical” argument to show how silly right-wingers are, for gauging recessionary policies relative to the trough and not the previous peak. Now, she recently came out swinging in favor of the Obama stimulus package, with the following argument (among others):
[T]here’s little question that policy makers — myself included — should have worked harder to earn the public’s support for the act. One frustrating anomaly is that many of its individual components routinely received favorable reactions in polls, while the overall act was viewed negatively.
That is more than a simple public relations problem. Recovery measures work better when they raise confidence — as Franklin D. Roosevelt understood. His fireside chats, and his inaugural address proclaiming he would fight the Great Depression with the same resolve he would muster against a foreign foe, were aimed at reassuring Americans. Recent research suggests that New Deal programs may actually have had their primary impact on the economy by influencing consumer and business expectations of future growth and inflation.
Partly because of fierce political opposition, and partly because of ineffective communication and imperfect design, the Recovery Act generated little such rebound in confidence. As a result, it didn’t have that extra, Rooseveltian kick.
I’m not going to bother looking it up right now, but suffice it to say, when Mitt Romney recently suggested that above and beyond his better policies, his personal gravitas might develop an extra Romneyeseque kick–Krugman was a bit skeptical.