Hillary's Bad History

Today's WSJ (subscription may be requred) points out some additional speaking errors Hillary made recently - about economic policy. Last week, Hillary said that "I don't think we can work our way out of the problems we're in in the broad based economy with monetary policy alone...I think the Japanese tried that and tried and tried that." No surprise that Hillary is no economist.

As the article points out, Japan was way too late in cutting rates and could not get in front of the deflation curve. No one in the U.S. today believes we are headed for deflation. More importantly, Japan used a Keynesian philosophy (partly at the recommendation of the Clinton Adminstration) to spend its way out of recession. In 1992, both the U.S. and Japan's debt was roughly 70% of GDP. After massive spending programs, Japan's debt today is approximately 140% of GDP. At the same time, Japan raised consumption taxes and assumed a quasi-bailout of large Japanse banks, which prolonged any recovery for years. And yet - despite my "willing suspension of disbelief," this is what Hillary is proposing for the U.S.

If Hillary really wanted a U.S. economic recovery, she should write all of her best ideas down on paper and then do the exact opposite of what she concludes.