Posted on 11/03/2012 12:42:57 PM PDT by DeprogramLiberalism
[written September, 2011, but even more applicable today]
Re: Could this time have been different?
Ezra Klein Washington Post columnist
Ezra Klein: Some partisans offer a simple explanation for the depth and severity of the recession: It’s the stimulus’s fault. If we had done nothing, they say, unemployment would never have reached 10 percent.
This is the wrong way to look at it. The unemployment rate numbers are so skewed as to be virtually worthless. For instance, if all of the people that have given up searching for jobs were included in today’s unemployment rate it would be over 11%: Townhall Total employment is what really tells the tale.
Ezra Klein: A fairer assessment of the stimulus is that it did much more than its detractors admit, but much less than its advocates promised.
Obama’s stimulus package was worse than a monumental failure. Obama told us: “One year later it is largely thanks to the Recovery Act that a second depression is no longer a possibility.” Except that the “second depression” in American history started in 1815 – and no, Obama’s stimulus didn’t prevent it. Christina Romer projected that without her and Obama’s stimulus, total employment would go from 132.8M in the first quarter of 2009 to 133.9M in the fourth quarter of 2010, an increase of 1.1M jobs – Obama’s “second depression”. Alternatively, with the stimulus, she projected fourth quarter of 2010 employment of 137.6M, a gain of 4.8M jobs. Guess what the actual total was for the fourth quarter of 2010? 130.2M - a LOSS of 2.6M jobs! That’s a net difference of 7.4M jobs between Romer’s projection and the actual result. How Mr. Klein can get that the stimulus “did much more than its detractors admit” is beyond my understanding.
In effect, according to Barack Obama, the result of his stimulus package was even WORSE than a “second depression” of 133.9M jobs. The stimulus didn’t just fail to create jobs, it correlates with a massive loss of jobs – EPIC FAILURE!
It is even worse than that. If one factors in a conservative 100,000 new job seekers added per month to the total deficit from the first quarter of 2009 to the fourth quarter of 2010, there are 4.8M jobs missing.
So let’s go to September, 2011. The missing jobs number is still an almost unchanged 4.6M.
And what about from the jobs peak total in January of 2008? Including those 100,000 new job seekers per month, there are 11.1M missing jobs right now.
Yeah, I’d say the stimulus was either useless, or that it contributed to the problem. There is certainly no evidence in these numbers that it helped in any way.
Ezra Klein: Critics and defenders on the left make the same point: The stimulus was too small.
Well here’s one critic that says any amount or stimulus, big or small was too big. Herbert Hoover and FDR proved that stimulus spending simply does not stimulate the economy (the growing GDP only reflected government spending, not an expanding economy that created jobs). According to official U.S. Census Bureau Statistical Abstracts, under the United States Department of Commerce there were 8M unemployed in 1931. By 1939 it had gone up to 9.4M – same EPIC FAILURE as Obama.
Ezra Klein quoted: “If we didn’t have the 22nd Amendment and Barack Obama became president in late March rather than in late January, things would have been much worse when we came in than they were. And then the Recovery Act would have come not in February, but in May. We would already have hit bottom, and it would seem like things were getting better.”
Wrong. First, by his own reasoning it would have been April not May. Second, falling employment had hardly bottomed out, so nothing would have changed. His statement is just spin.
Ezra Klein: In a world where the economy was steadily recovering, Obama might have amassed a record comparable to Franklin Roosevelt’s.
I have already illustrated that Obama did amass “a record comparable to Franklin Roosevelt’s” – EPIC FAILURE!
Ezra Klein: From the outset, the policies were too small for the recession the administration and economists thought we faced. They were much too small for the recession we actually faced. More and better stimulus, more aggressive interventions in the housing market, more aggressive policy from the Fed, and more attention to preventing layoffs and hiring the unemployed could have led to millions more jobs. At least in theory.
I have already debunked your “theory”. No amount of stimulus spending has ever stopped a recession or depression.
Ezra Klein: Give policymakers some credit: They really have learned from the Depression. So did the Japanese. In the 1990s, they pumped monetary and fiscal stimulus into their economy, too, and they didn’t suffer a depression. But they never found themselves in a recovery. They stagnated for a decade, and then for another.
What utter nonsense – they learned NOTHING from the Great Depression. What they should have learned was that stimulus spending does not work.
Ezra Klein: The question, of course, is why do governments limp out of recessions when the weight of history tells them to run?
If you mean by “run”, a larger stimulus, history certainly does not say that.
Ezra Klein: Its team of interventionist Keynesians immersed in the lessons of the Depression and Japan did too little.
They weren’t Keynesians. Keynes proscribed stimulus only to the private sector. Obama’s stimulus went mostly to states and government unions. Keynes also proscribed that the stimulus deficit should be planned to be surplused away at the earliest point of the recovery. Obama certainly never planned for a surplus of even one penny – only more trillions in deficits. They are not Keynesians – they are progressive-fascists, just as FDR was. (Keynesianism links: [1] [2] [3] Progressive-fascism – see #6 Austerity Versus Stimulus – What Is the History?)
Ezra Klein: Meanwhile, the opposition’s capacity to do more is arguably even more limited, as it has turned against whatever policies were tried in the first place. Add in the almost inevitable run-up in government debt, which imposes constraints in the eyes of the voters and, in some cases, in the eyes of the markets, and an economy that started by not doing enough is never able to get in front of the crisis.
How totally blind Mr. Klein is. The answer stares at him in the face, but to him it is a ghost.
Ezra Klein: These sorts of economic crises are, in other words, inherently politically destabilizing, and that makes a sufficient response, at least in a democracy, nearly impossible.
Wrong. A simple look at history, explained to the populous, would provide a sufficient solution.
Ezra Klein: There were many paths that could have been taken in January 2009, and any one would have made this time a bit different. But not different enough. Not as different as we wish.
Here is the incredibly obvious solution that any high school student could find if directed to examine the government responses to the depressions and potential depressions of the last one hundred years (even Mr. Klein may have found it if he were not so ideologically blind):
Herbert Hoover attempted to fix the Great Depression with a mixture of progressive and fascist policies and failed. FDR attempted to fix the Great Depression with even more progressive-fascist policies and prolonged it right through WWII (more below). Maintaining progressive policies, Jimmy Carter failed to stop a malaise that turned into a recession and threatened to turn into a depression. Barack Obama attempted to fix the Great Recession with progressive-fascist policies and instead turned it into the Obama Malaise.
But Warren G. Harding used conservative policies and stopped the 1920 Depression dead in its tracks. There was a recession at the end of WWII that was threatening to turn back into the Great Depression. Truman wanted to implement FDR’s suicidal Second Bill of Rights (a bulked up new New Deal), but a Democrat Congress was terrified of a resumption of the depression with the war industries closing and millions of troops coming home looking for jobs. So Congress turned to conservative policies of removing tariffs and cutting taxes, and refused to go back to FDR’s New Deal policies that had been abandoned in 1942. Thankfully, the economy didn’t plunge back into the Great Depression, but stutter stepped and eventually turned around. Ronald Reagan then stopped a malaise and recession inherited from Carter that was threatening to turn into a depression, using conservative policies again. Then George W. Bush came into office fighting a crashing economy, inherited from Bill Clinton that he also turned around with conservative policies. No doubt it will be a Republican President and majority Congress that will turn around the Obama Malaise with conservative economic policies after the 2012 election.
So, what does our high school student’s examination of history show us? Obama should follow President Warren G. Harding’s strategy when he cut a worse depression than the Great Depression short in just 1 1/2 years, reducing the debt by a whopping 35% and producing the most robust decade in American history called the Roaring Twenties (get the name?). He cut taxes. He cut regulations. He cut government spending, and he cut the size of government. End of depression. End of discussion.
Alot of liberals look at Jimmy Carter’s presidency with extreme nostalgia
The gas lines, the foreign policy debacles, the humiliation of the US at every turn, they loved it.
Franklin Roosevelt was a socialist as is Obama. And people say the democrat party just recently got radical . No Roosevelt the democrat started all this socialism and growing government and it did it in the 1930’s.
Do liberals actually think?
“Some Liberals Actually Think “a record comparable to Franklin Roosevelt’s” Is a Good Thing – Sheesh!”
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