Short not-sharp shock
Posted on 10:26, February 11th, 2009 by Lew
NatRad’s PCR Jane Patterson on Nine to Noon this morning characterised the government’s counter-recession plan as “drip-feeding”, opposed to Obama and Rudd’s “big bang” approach (audio). But drip-feeding would imply a long-term commitment, and Key doesn’t believe the recession will be a medium or long-term problem.
Rather than either of those metaphors, I would characterise the front-loading of already-planned expenditure and development into the coming six to eighteen months as a short sharp shock; however, given the relatively small amount of expenditure and development in the plan, it’s not even very sharp. Of course, there’s the argument that the government doesn’t have any more money to spend, but Key has bet on a short recession, and that implies short-term debt. I would think that if one was betting on a short recession, one would do everything in one’s power to ensure it was a short recession.
If it turns out to not be a short recession, Key (and English) will have to return to the drawing board, and that will very likely mean another short (perhaps sharper this time) shock, rather than introducing a strategic counter-recession plan mid-term and mid-recession. DPF raises (in some jest) the idea that Key might emulate his hero Muldoon on another matter, but to me it looks like this track could lead to economic micro-management of a very Muldoon-like nature. And the broadband plan is very Think Big.