One-handed economists

Ever since I learned even a little bit about economics, I've been convinced that there was a big stinking dead body in the closet of conservatism. That dead body, when I later learned the words for things, was "public goods." There are some things that the government - and only the government - can do that complement business activity instead of pushing it out of the market. Infrastructure, R&D, education. In their zealous campaign against the evils of socialism, conservatives utterly ignored this important role for government.

They ignored it to the point that "public goods don't exist" has essentially become an article of religious faith. Pseudo-econo-babbling hacks like Amity Shlaes, who talk about economics but never studied it, state this false proposition boldly and without guilt, since they never troubled themselves to learn actual facts. But real economists with conservative leanings, like Harvard star Greg Mankiw, can't come out and openly claim that there's no such thing as a public good.

So instead, when explaining why all government spending is automatically bad, Mankiw has to give a little cough and mumble something under his breath. His new line is that infrastructure spending is best done at the state and local level, not at the national level. He's admitting that public goods exist (because he has to), but refusing to admit that they exist at the national level.

As Matt Yglesias points out, this is bizzarre, since so many infrastructure projects cross state lines. Duh. But Mankiw's conservative econo-religion forces him to say that U.S. federal government spending is always purely bad. State spending can be tolerated, but federal spending, presumably, would somehow be Socialist. Interestingly, this is the same line taken by Ed Prescott in a drunken email rant against an Obama supporter earlier this fall:

Infrastructure investments are best made at the local and state level...Your religion of Statism is a not a good religion. It is detrimental to the welfare of the people. A basic tenet of my religion is free to choose and to enter into mutually beneficial contracts.

It's kind of a sad day when a brilliant economist stops doing scientific work and turns to religion. Seems to be happening more and more among the conservatives these days.