The Times' 'Caucus' podcast last Friday [1] was focused on the financial crisis. Washington correspondent Binyamin Appelbaum, who focuses on financial issues, joined hosts Sam Roberts and Michael Shear to call for yet more federal spending on infrastructure "investment" in the face of a national debt of $14 trillion.
Binyamin Appelbaum: 'I think it's important to sort of step back and say that we're not yet seeing the type of crisis that we did in 2008. The reason to be concerned about that is that the system remains fundamentally unchanged. We still have a lack of confidence in financial institutions, we still have profound problems with market transparency, people just don't know what's out there. The banks are still holding on their balance sheets almost all of the bad things that they were holding in 2008. And so, much like a city that still has buildings that weren't built to withstand earthquakes, people are sort of looking around and fearing a shock from Europe could have a similar effect to the one that we saw a couple of years ago, but it hasn't happened yet.
Even if that doesn't happen, we're in the middle of this economic malaise, as you said it a moment ago. And for governments, the real problem is that there's this tremendous political pressure to get smaller, and everything we know about economics tells us that they should be doing the opposite, they should be getting bigger right now.'
Sam Roberts: 'Well, how come we know that and they don't?'
Appelbaum: 'You know, it's a really fascinating thing. The space in between conventional economic wisdom and conventional political wisdom right now is probably about as large as it's ever been. I could get you 100 economists, and 95 of them would tell you the same thing, which is that right now is a really good time for the government to go out and borrow money, it's as cheap as it's ever been to borrow money, invest it in infrastructure, invest it in things that will pay off in the long run, and help out the economy. And if I convened a panel of 100 politicians, not quite 95 of them, but 60 or 70 would probably vote to make the government smaller right now, and it's just a remarkable disjoint.'
Appelbaum was only the latest Times reporter to take advantage of the podcast to switch to advocacy mode; in a podcast posted July 15, reporter Mark Landler lamented along with President Obama on the 'intransigence [2]' of House Republicans over their insistence on budget cuts in the battle over raising the debt ceiling.