A Recovery About Nothing

As you know, there are signs — tentative ones — that our economy is beginning to recover from Great Depression II. It’s about on schedule — I thought we would need about five years to crawl out of the hole we were in. But we had 5% growth in Q3 and unemployment continues to edge down (although the U6 remains high). Projections for 2015 are cautiously optimistic, barring a major war or something (which, with Obama, is always on the cards).

I have noted, however, that this recovery runs against the dogma we’ve been hearing from the Keynesians and pseudo-Keynesians on the Left Wing. According to them, the “austerity” of the last few years (i.e., flat spending) should have caused us to have a double-dip recession. David Harsanyi expands on this:

But if activist policies really have as big an impact on our economic fortunes as Washington operatives claim, I only have one question: What policy did Barack Obama enact to initiate this astonishing turnaround? We should definitely replicate it.

Because those who’ve been paying attention these past few years may have noticed that the predominant agenda of Washington has been to do nothing. It was only when the tinkering and superfluous stimulus spending wound down that fortunes began to turn around. So it’s perplexing how the same pundits who cautioned us about gridlock’s traumatizing effects now ignore its existence.

For instance, Paul Krugman wrote a column titled “The Obama Recovery.” The problem is that the author failed to justify his headline. It begins like this:

“Suppose that for some reason you decided to start hitting yourself in the head, repeatedly, with a baseball bat. You’d feel pretty bad. Correspondingly, you’d probably feel a lot better if and when you finally stopped. What would that improvement in your condition tell you?”

Suppose you tell us what the bat represents, because spending in current dollars has remained steady since 2010, and spending as a percentage of GDP has gone down. In 2009, 125 bills were enacted into law. In 2010, 258. After that, Congress, year by year, became one of the least productive in history. And the more unproductive Washington became the more the economy began to improve.

Krugman argues that the recession lingered because government hadn’t hired enough people to do taxpayer-funded busywork. The baseball bat. But then he undercuts this notion by pointing out that there was an explosion of public-sector hiring under George W. Bush—the man he claims caused the entire mess in the first place. Krugman also ignores the stimulus, because it screws up his imaginary “austerity” timeline. He then spends most of the column debunking austerity’s success in Britain.

Britain’s “austerity”, incidentally, was called austerity when the UK economy was stagnant. When it began to recover, the exact same budgets were described as having abandoned austerity. With the Keynesians, it’s always heads they win, tails we lose.

This recession was not about a lack of demand or a lack of spending. It was about the huge amount of debt that the American people had dug themselves into. That debt has declined — mortgage debt is down and consumer debt is down. Student and public debts have risen but not as sharply. In short, we’re finally getting out from under the 16,000 pound boulder that was the Housing Bubble. And, who knows? Maybe things would be better if we didn’t have the 10,000 pound boulder of federal debt and the 2,000 pound barbell of student loans.

OK, I’m letting that metaphor get away from me.

Anyway, our gridlocked do-nothing Congress has failed to pass a “jobs” bill, has failed to enact “temporary” stimulus and has cut programs to “build the economy”. And the result is the healthiest economic numbers in a decade.

Funny how well we can do when our government stops “helping” us. Now imagine if we could get them to stop giving us “free” healthcare and regulating our every move.

Comments are closed.

  1. AlexInCT

    If there is a recovery, and I still remain dubious, it is despite what the democrats and the left have done for the last 6 years. The fact of the matter is that the super rich, the grand majority of them well connected democrat donors, have made out like bandits. The number of people sucking at Uncle Sam’s teat is at a record high. The middle class is being squeezed to death. New jobs are low end ones and most are going to illegal aliens. The stock market is flying because most corporations, the exception being the much maligned and hated brown energy sector which has created an unprecedented boon and is directly responsible for the drop in current oil and gas prices, are making money outside the US and keeping most of the lucre out there to avoid insane taxes. The average Joe is not seeing any recovery, and when Obamacare bullshit kicks in for the rest of us this year, we will see any advances the drop in energy prices and the strengthening of the dollar vanish, as our government yet again finds itself forced to implement monetary policy to reign in inflation gone mad.

    Again: if things are truly getting better it is DESPITE the policies of the left and the last 6 years of bullshit. If anything, we should have more government shutdowns IMO. That’s where most of the positive has come from.

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  2. Hal_10000 *

    I agree on both parts. I agree that it’s a big if on the economy and that this is happening despite all the “help” we’re getting from Washington. The stimulus is a good example of how Washington’s help can actually hurt us. It went into unproductive uneconomic bullshit instead of things people actually needed or wanted.

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  3. CM

    I have noted, however, that this recovery runs against the dogma we’ve been hearing from the Keynesians and pseudo-Keynesians on the Left Wing. According to them, the “austerity” of the last few years (i.e., flat spending) should have caused us to have a double-dip recession.

    Don’t forget also that not extending the Bush tax cuts was going to ruin the economy (threatening hundreds of thousands of jobs, and leading to even less economic growth, less investment and lower wages for American workers,” warned John Boehner).

    With the Keynesians, it’s always heads they win, tails we lose.

    Not just with them. With all ideologues.

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  4. AlexInCT

    Only someone that likes believes my money is actually theirs would think cutting taxes is a bad thing. Let me spell it slowly for you CM: our problem is that we spend too much. Specifically on unconstitutional socialist bullshit to buy votes for one party. Most of that stuff really does more damage because it is set up to reward bad behavior, and thus creates more of that. People like you that think the problem is me wanting to keep more of what I have earned through hard work, sicken me.

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