Washington economic experts have been proclaiming that economic recovery is right around the corner since before they were sure the patient was sick.
For those of us who have been saying all along that none of the economic interventions since 2007 would revive the economy—not the rescue of Bear Stearns and other financial institutions; not the Troubled Asset Relief Program; not the American Recovery and Reinvestment Act; not Quantitative Easings I, II, and III; not the Patient Protection and Affordable Care Act; not Cash for Clunkers or Solyndra or the bailouts of Chrysler and General Motors—the cavalcade of wrongheaded, fantastical economic analysis coming out of official Washington and its media in recent years would be hilarious if it were not so infuriating.
The granddaddy of these economic inanities is Federal Reserve Bank chairman Ben Bernanke's March 2009 declaration that he could see economic "green shoots":
I think as those green shoots begin to appear in different markets and as some confidence begins to come back, that will begin the positive dynamic that brings our economy back.
With the benefit of hindsight it's easy to laugh at Bernanke, and some folks have been known to do so.
Trillions of dollars have been spent on monetary expansion and economic recovery since the beginning of the Obama administration. At least a trillion had already been spent before President Barack Obama was sworn in.
Throughout that period, headline unemployment has exceeded predictions every single month, growing from 7.3 percent to 8.2 percent (and topping 10 percent during the period when the Recovery Act's purported benefits were at their peak). Labor force non-participation (that is, work-eligible Americans who have left the workforce entirely and now are not even counted in unemployment statistics) has climbed from 34.3 percent to 36.2 percent. Contrary to both Keynesian and monetary theory, this period of flat growth has been accompanied by pronounced Consumer Price Index inflation that has robbed your dollar of 10 percent of its value since 2007.
Here's a far-from-exhaustive list (we could have filled every month's quota using nothing but gaffes from Vice President Joe Biden) of insane, disinformed, spectacularly wrong statements from Obama's ever-shrinking brain trust, with a sprinkling of mots justes from the commentariat.
One quote per month, followed by that month's rate of U-3 unemployment and labor force non-participation:
January 10, 2009: Council of Economic Advisers Chair-designate Christina Romer and Jared Bernstein, economic advisor to Vice President-Elect Joe Biden: "As Figure 1 shows, even with the large prototypical (stimulus) package, the unemployment rate in 2010Q4 is predicted to be approximately 7.0%, which is well below the approximately 8.8% that would result in the absence of a plan." (Unemployment 7.8 percent, labor force non-participation 34.3 percent)
February 25, 2009: Vice President Joe Biden: "We have an opportunity to get the nation back to work and back on its feet....And we have to do it right." (8.3 percent, 34.3 percent)
March 15, 2009: Federal Reserve chairman Ben Bernanke: "We'll see the recession coming to an end probably this year." (8.7 percent, 34.4 percent)
April 14, 2009: President Barack Obama: "[W]e are beginning to see glimmers of hope." (8.9 percent, 34.4 percent)
May 18, 2009: CNNMoney: "Job recovery may be on the way." (9.4 percent, 34.3 percent)