Over at Eric Crampton’s excellent blog he did a round up of NZ economic issues. In this round up he stated:
On the whole, Key’s National government has so far done a lot less harm than have others
Paul Walker takes issue with this stating:
This government can, in my view, do a lot better than it is
These guys are both completely right. The government has been relatively constrained in the face of the crisis, which given our priors is a good thing. However, the policies that they have put through just aren’t good policies as we have suggested here (as even if what they are aiming to do is the right thing to do – there are far better ways of doing it).
If I had to pick a position then I would say I’m currently with Paul – I would rather try to push the government towards optimal policies than accept that what they are doing is “relatively better”. If everyone was jumping off a cliff would I think it was a better policy for my friend to jump off into a relatively soft area or not to jump at all …