42 Straight Months of Stupidly Optimistic Official Predictions About Economic Recovery

Once-a-month quotes from the Obama administration and the media about how the economy will be booming any minute now.

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)

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • Palin's Buttplug||

    Yet US corporate profits are at all time highs, interest rates at all time lows, inflation is moribund, markets have rebounded, gas and oil are falling while production rises, taxes are near lows in real terms or certainly as a % of GDP and the private sector is adding millions of jobs while government sheds them.

    What is not to like?

  • BakedPenguin||

    M0.

  • Tulpa the White||

    I thought you were citing the Egyptian commenter.

  • BakedPenguin||

    Mo?

  • Mr. FIFY||

    "Yet US corporate profits are at all time highs"

    And there's the wealth-envy money shot.

  • Bobarian||

    Ron?

  • Bobarian||

    Ron.

  • Mike M.||

    Oh, I can think of plenty. Private sector job growth, while still positive for now, appears to be rapidly decelerating as we get closer and closer to a double-dip recession.

    Gas and oil, while down recently, are still way up from where they were about four years ago.

    Interest rates are being held artificially low and the stock markets artificially high by the Fed's dangerous games, like Operation Twist and Shout.

    Inflation is moribund only by the government's bogus statistics; when you actually factor in food it's a lot higher.

    Taxes are indeed low now, but are going to skyrocket on January 1 if Obama in fact follows through on his pledge.

    In the meantime, we continue to accumulate massive amounts of debt, as Obama's rush to six trillion dollars in just four years continues on. As a result, our credit rating has been downgraded for the first time in American history.

  • Palin's Buttplug||

    There is no double dip, Oil and Gas are below 48 month moving averages, food is at an all time low and the Fed is doing its job.

    http://www.npr.org/blogs/money.....-groceries

    Your post is not factual. Instead it is pure conjecture.

  • Cytotoxic||

    We're right on the brink of double-dip and your timeframe is cherry picking.
    "Food is at an all time low" = Lies.

    Nice retarded link by the way. Does nothing to disprove the fact that food prices are now rising.

  • Cytotoxic||

    We're right on the brink of double-dip and your timeframe is cherry picking.
    "Food is at an all time low" = Lies.

    Nice retarded link by the way. Does nothing to disprove the fact that food prices are now rising.

  • wareagle||

    food is at an all time low

    bullshit. Squared.

  • Palin's Buttplug||

    The average American's food costs are at a low as a % of income.

    Period.

    (see link above).

  • wareagle||

    bullshit. "As a percentage of income" is about as useless a statistic as one can conjure. It just means that the price of other things has gone up even more.

    Prices for virtually every food item have gone, incomes have not kept pace, and there is a raft of data in support of either. But you know that, so you twist an NPR story that tries to pass as 'fact' something as jaw-droppingly stupid as ground beef costing less per pound today than it did 30 years ago.

  • Cytotoxic||

    Oh wow 2 fucking data points not relevant to the time period discussed. Just what we expect from Shriek minus getting faecal matter in his own eye.

  • sablegsd||

    Bull. Every time I go to the store EVERYTHING has gone up.
    My check has not gone up.

  • VG Zaytsev||

    Chicken legs are down 35% in 30 years.

    That proves there's no inflation.

    / Jackass.

  • Palin's Buttplug||

    You fear a double dip, you fear inflation, you fear higher taxes, you fear job losses, etc.

    Those are not events as of today.

  • BakedPenguin||

    M0.

  • Tulpa the White||

    But M2 is "only" up 12.9% during the past two years.

  • Tulpa the White||

  • BakedPenguin||

    Oh yeah? Wait.

  • Cytotoxic||

    No. They are tomorrow's events brought about in large part by stupid fucks like you.

  • Tulpa the White||

    You know Tim is going to post this in his recap two years from now, right?

  • Dylan||

    "High profits, low interest rates,and rebounding markets" ... so your telling me we're blowing another bubble.

    "inflation is moribund" ... you're confusing prices and the money supply. Prices are supposed to fall during recessions, inflation (the expansion of the money supply) has made them rise despite the recession.

    "taxes are low" taxes on adults are virtually the same as during the Bush years. People are just making less money. Taxes on our children and the unborn (government borrowing) is higher. Also government borrowing is inflating GDP.

    "Private sector is adding jobs" ... jobs do not equal productivity or wealth.

    "Government sheds them" ... news to me, do you have a link?

  • Palin's Buttplug||

    Under Obama a record decline in public sector jobs....

    http://economix.blogs.nytimes......ment-jobs/

  • Cytotoxic||

    government employment is down 2.6 percent over the last three years

    Holy shit it's almost NOTHING.

  • Raistlin||

    Remeber; in the leftist mind, anything less than a dramatic increase is to be considered a dramatic decrease. To the rest of the world... meh.

  • Palin's Buttplug||

    Under Dumbya (a rightist mind) government rapidly expanded.

    Which is why I am anti-Bushpig.

  • Cytotoxic||

    a rightist mind

    You don't know what a rightist is and you don't have a mind.

  • VG Zaytsev||

    Under Dumbya (a rightist mind) government rapidly expanded.

    First of all, yeah Bush sucked.

    Secondly, 'Teachers' are not included in the government workers data which renders it completely invalid

    And third, government payrolls at the state and local level swelled as an indirect result of the credit bubble. Those public employee jobs represent a 2nd order malinvestment and need to be liquidated every bit as much as the malinvestment in real estate does.

  • Mr. FIFY||

    You should also be anti-Obama, but then again you're not really a capitalist.

  • Jordan||

    That's a result of state government policies, idiot.

  • Paul.||

    gas and oil are falling while production rises

    Gas has dropped precipitously from nearly $5 a gallon to around $4. I know I'm all tingly.

  • Palin's Buttplug||

    Less than $3 here in Georgia.

    But I meant Nat Gas - which is very low - about 20% of 2005 highs.

  • Paul.||

    You southerners get special dispensation.

    We're environmentally conscious. Al Gore personally sets the spot price of gas in Washington from his secret lair. For the Children.

  • wareagle||

    sorry Paul, but no special dispensation in the South, at least not FL or NC. PB's "less than $3" means about 2.98, technically less but not as impressive as he pretends. And still a lot higher than when the smartest president ever took office.

  • Tulpa the White||

    Yeah right you meant natural gas. When anyone says "gas prices", they automatically think of gasoline.

  • ant1sthenes||

    "Yet US corporate profits are at all time highs"

    Isn't that normal? Between economic growth and inflation, it would be more noteworthy when they fall.

  • wareagle||

    not to mention a reduction in what, for most companies, is their single largest expense - payroll.

  • ||

    CPI inflation 10 percent since the beginning of the recession, during a period of flat economic growth, is not moribund. But thanks, shrike, for the reminder that we could also have compiled this list using nothing but your own economic predictions.

  • Palin's Buttplug||

    Wow, you guys pay attention to us riff-raff?

    I am duly impressed.

  • The Derider||

    So CPI inflation is around 2%?

    That's significantly less than the historical average of 3.4%

    It seems like you should have compiled this story with actual economists.

  • Mumu Bobby||

    You hiring? Didn't think so.

  • Mr. FIFY||

    Funny that Derider just happened to show up about the same time as shrike.

    Wait... no, it isn't.

  • TheAtomicOption||

    In case anyone misunderstands:

    Corporate profits are inflated by government bailouts, massive layoffs, restructuring and ever stronger regulatory capture.

    Interest rates are low because the Fed thinks a glut of borrowing will fix what a glut of borrowing caused.

    Massive inflation (as noted by BakedPenguin) has already happened, but it's not showing up in prices yet because banks have drastically increased their reserves in excess of deposits.

    Markets haven't recovered to their pre-crash level yet most of their recovery rate has been slowing since the end of the initial crash.

    Gas and oil prices are terrible indicators of anything because of distortions caused by taxes at the pump and massive subsidies at the refinery that fluctuate often from state to state, and seasonal demand but since you brought it up, gas prices are still high as shit, just like they have been since the 9/11.

    Taxes aren't significantly lower and since government spending is up so much, that just means our deficit is the highest it's been since we were borrowing to win WWII. http://www.usgovernmentdebt.us.....chart.html

    The private sector is adding fewer jobs than it's shedding and government is bloating itself with more workers even as utilization of it's services falls.

    Everything is not to like.

  • Bobarian||

    This just in --

    GM is considered a successful business model in Shriek's world.

  • Sherlocktoo||

    Try borrowing some of that money to start a small business. And 1.9% growth is good in your opinion? And state and local governments are shedding jobs because they don't have the revenue to pay the salaries, while the federal government continues to add to their payroll and our debt. You're simply being misinformed from the dnc. Before the democrats took over in congress, our economy was much better, and then election Obama to go with them, has created this disaster we now live in. All this, while we have the least number of people working in the last 30 years.

  • Tman||

    I'm glad that this administration gave me something I could point to in order to explain the sheer lunacy of the American Recovery and Reinvestment Act IN THE FORM OF A FUCKING GIANT ROAD SIGN COSTING TAX PAYERS MILLIONS OF DOLLARS.

    I despise those signs without every ounce of my being.

  • Palin's Buttplug||

    The fact is that US companies have found a better-educated cheaper workforce overseas.

    What is not to like?

  • Tulpa the White||

    Tell your mancrush about that so he stops running commercials castigating Romney for giving foreign workers jobs in 1994.

  • ant1sthenes||

    Thanks, public education monopoly. Maybe if you had focused on the students rather than the teachers, we'd be better off.

  • ||

    "When schoolchildren start paying union dues, that's when I'll start representing the interests of schoolchildren."

  • The Derider||

    The profit motive is evidence of evil.

  • ant1sthenes||

    Only when it's unconstrained by internal checks (conscience) or external checks (accountability). The latter is applicable to the bulk of government positions, and the former is practically a requirement for higher offices.

  • The Derider||

    You realize that an administrative position in a union is not a government position, right?

    I guess not.

  • Jesse James Dean||

    for a govt. employee union the difference is not enough to matter

  • ||

    Nope. Just hypocrisy when you hysterically claim that every new perk in your benefit package is "for the children".

  • The Derider||

    Better Pay = Better Workers

    Why does this iron law of the labor market not applicable to teachers?

  • Jesse James Dean||

    Better EARNED pay jackass. Giving someone a raise they have not earned will not make them more productive. In fact it gives them even less incentive to be productive, because they know they will get paid no matter what.

  • Rich||

    Nice listing, Tim.

    How about this: *Require* every economic official to make a prediction once a month, for next month, and if it's off either way by some "reasonable" amount, the expert has to apologize publicly and loses his job

  • Paul.||

    Why don't we just... arrest them?

  • 35N4P2BYY||

    I think they should be publicly tased, won't kill them, they can survive and do something nearly unheard of in DC, learn from their mistakes. I bet they would stop pulling numbers out of their asses right quick.

  • Bobarian||

    If we'd instituted this just a few years ago, we could be using Krugnuts as a battery to power lower Manhattan by now!

  • Dirk Nowitzki||

    Great compilation here. To government and the so-called experts, the economy will improve as long as people don't criticize them...

  • Tulpa the White||

    The voice from the telescreen paused. A trumpet call, clear and beautiful, floated into the stagnant air. The voice continued raspingly:

    "Attention! Your attention please! A newsflash has this moment arrived from the Malabar front. Our forces in South India have won a glorious victory. I am authorized to say that the action we are now reporting may well bring the war within a measurable distance of its end. Here is the newsflash -- "

    Bad news coming, thought Winston. And sure enough, following a gory description of the annihilation of a Eurasian army, with stupendous figures of killed and prisoners, came the announcement that, as of next week, the chocolate ration would be reduced from thirty grams to twenty.

  • Coach Panto||

    Being a Keynesian means never having to say you're sorry.

    In the days when towns were small enough that everyone knew each other, if a banker and the mayor collaborated to overspeculate in a boondoggle that bankrupted the city, then imposed a 50% tax on everyone to bail out the banker, which ran half the businesses out of town, what would happen?

    The townies would tar and feather them and if they survived, would exile them, if not imprison and kill them.

    We need to do that to the Dems and Rino's at the ballot box. Though if I could choose 5 people to tar and feather, it would be Bernanke, Paulson, Summers, Romer, and Geithner. And I'd dig up Keynes' skeleton and tar and feather it, too.

  • Palin's Buttplug||

    Not Dick "Deficits Don't Matter" Cheney?

    You are sadly misguided.

  • Cytotoxic||

    They only matter when a elephant is in charge apparently.

  • Coach Panto||

    Nobody guides me. Especially you, Professor Turdonomics. Don't look under your bed...the Profit Monster is going to get you!

    The heart of bad economic thinking is the broken window spending of the Keynesian shamans.

    Keynesians are so galactically stupid that they think robbing the shopkeeper and giving it to the village idiot for digging holes and filling them in is a "job created".

    Then when jobs were being lost at 0.5% a month, the Keynesians claimed that it WOULD have been twice that loss rate if they hadn't intervened.

    I suppose if BamBam is re-elected and we're even worse off 42 months from now, the Keynesians will claim that if it weren't for stimulus and QE 1 to 8 that an asteroid would have struck the earth and killed us all.

    Oh and I forgot KRUGMAN on my tar and feather list. That guy has his head so far up Keynes' arse that all you can see are his grubby little Marxist toes.

  • Palin's Buttplug||

    Please tell Paul Ryan to speed up his Medicare private voucher plan from 2023 to now to cut costs immediately.

    Really? 2023? What a coward.

  • Cytotoxic||

    I know right? And yet he looks absolutely visionary next to this Obama asshole.

  • wareagle||

    and the Dem response to Ryan has been? Crickets....

  • Palin's Buttplug||

    True. Democrats have no response.

    Obama cut $50 billion a year from PROVIDER payments in Medicare and Romney said he would restore those payments.

  • Cytotoxic||

    Obama pretended to cut

    FIFY

  • TheAtomicOption||

    Romney will "restore" the pretended cuts for real so we'll end up with a net $50 bil gain... if we're lucky and he doesn't try to add more to make up for lost time.

  • wareagle||

    yes, because no provider of services should expect to be paid. Obamacare also shifted a half-billion from Medicare. You don't suppose this has something to do with docs refusing to take new Medicare patients, do you?

    Obama, by the way, cannot "cut" anything and his two most recent budget proposals have been shut out in both chambers. When not a single member of POTUS' party supports his budget, that could be a sign.

  • Palin's Buttplug||

    The "half billion" is over 10 years - my $50 billion a year. That cut was in Obamacare. NO GOP votes (maybe the rougue from New Orleans)

    Docs love Medicare patients, btw.

  • wareagle||

    of course, they love them. Explains why so many refuse to accept any new ones.

  • Alex the wolf||

    You are right, the Dems alternative was much better!
    What? there was no alternative? The last obama budget was rejected by 99 senators???? Ok if they ask lets talk about gay marriage

  • Alex the wolf||

    Just compare this "recovery" with the Reagan recovery in the early 80s.
    Obama record is so pathetic that no one can seriously defend it

  • The Derider||

    Reagan increased public employment with deficit spending to get out of his recession.

    Maybe we should have done that?

  • ||

    Yeah, if only Obama had the balls to run a deficit. Penny pinching prick.

  • Mr. FIFY||

    Actually... Reagan sucked ass.

    So did Bush, Clinton, and now Obama.

    Oh, and Bush Version 1.0 sucked ass, too.

    I could go on.

  • The Derider||

    Government employment has dropped, that's the point. Had it not, unemployment would be at 7.1 percent.

    http://blogs.wsj.com/economics.....-cuts-7-1/

  • Alex the wolf||

    maybe Barry is saving too much?
    I have a good idea: lets give solyndra another shot!

  • jason||

    The economic recovery is falling down then how can we accept that unemployment rate will rise.

  • NotSure||

    Shrike seems to forget that its his own party members saying the economy is bad. Perhaps he should stop wasting time here and instead inform them how wrong they all are.

  • Bobarian||

    You can say that again!

  • NotSure||

    Shrike seems to forget that its his own party members saying the economy is bad. Perhaps he should stop wasting time here and instead inform them how wrong they all are.

  • yomomma||

    Yet US corporate profits are at all time highs"

    Thanks to the offsetting budget deficits.

    "interest rates at all time lows"

    It is called no growth

    "inflation is moribund"

    Keep flushing the system with money and you will get stagflation.

    "markets have rebounded"

    that is what they said before 2008

    "the private sector is adding millions of jobs while government sheds them"

    you call over 8% and millions who have left the workforce a success?

  • The Derider||

    We don't have stagflation, that's the point.

    Inflation is historically low, and has been for the past 5 years.

  • Dick||

    This is not going to be a pleasant wake up call for folks who disagree with the Supreme Court decision (as do I), but we've got to face up to the role we've played in this catastrophe... http://blastedfools.wordpress......-for-this/

  • Jesse James Dean||

    I would totally give that hobo a few bucks

  • ||

    Here's a far-from-exhaustive list (we could have filled every month's quota using nothing but gaffes from Vice http://www.maillotfr.com/maill.....-3_11.html 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.

  • tee shirt pas cher||

    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.

GET REASON MAGAZINE

Get Reason's print or digital edition before it’s posted online

  • Video Game Nation: How gaming is making America freer – and more fun.
  • Matt Welch: How the left turned against free speech.
  • Nothing Left to Cut? Congress can’t live within their means.
  • And much more.

SUBSCRIBE

advertisement