Jon Stewart Flunks Econ

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I've been eagerly awaiting The Daily Show's take on the platinum coin, but when it finally came Thursday night, the result was a crushing disappointment. No movie-caper scenarios, no catchphrase punch lines, just a you-so-crazy reaction. What's more, the whole premise of Jon Stewart's reaction was completely uninformed. He seems to think the plan is designed not to prevent massive market dislocations caused by Republicans refusing to lift the debt ceiling, but to cover the budget deficit. Here's his setup:

America’s got a bit of a cash-flow problem these days. We have a $16 trillion debt. Our credit rating actually got downgraded for the first time last year. So I think you can all agree it’s time to get serious and figure out a way to restore the world’s respect for the soundness of our currency ...


No, that's not it. None of those points is relevant. It's not about the deficit at all. The credit downgrade was a pure political statement by S&P, one that had no impact at all on the markets. Respect for our currency remains extremely high, as evidenced by massive demand for it even at rock-bottom interest rates. We have no cash-flow problem at all.

It's hard to say exactly what Jon Stewart and his writers think about economic policy, but there is some odd vein of Hooverism that pops up from time to time. Take his 2009 interview with White House budget director Peter Orszag:

This happened in April of 2009 as the world economy was in a free fall. The whole comedic premise of the entire interview was "Oh my God, the deficit is so big; why don't you solve that?" Stewart compared the U.S. government to a family and asked what would happen if it called up its credit card company and said it was projecting a deficit of uncertain size. (Orszag correctly replied that families run deficits with credit card companies all the time.) He prodded with questions like, "When you say 'we’re cutting that down' — when?"

Orszag tried to gently explain that it wasn't important to cut the deficit right away, but Stewart did not seem to take that premise at all. (He did push back a bit on Über-deficit-hawk Alan Simpson in a more recent interview.)

Now, obviously it's not an economics show, but the premise of a joke is supposed to be reality, and the punch line is the departure from reality. The joke here proceeds as if we all know that Herbert Hoover's views on fiscal policy are obviously correct.