Obama's False Economic Consensus
As Tim Cavanaugh noted over the weekend, the Obama administration's economic heavies are pulling out the "everybody agrees" card to declare that the recession is over thanks to their benign ministrations. Last night on 60 Minutes, the president himself took the false consensus a step further:
Now, what we had to do was he had to make sure that there was some buoy, some stabilizer in the economy so that it didn't go into a Great Depression. And that's why we passed the Recovery Act. And for all the criticism that it received from the other side -- and we got no help from any Republicans, other than a couple, in passing it -- what we now know and every economist who's looked at it will acknowledge this, is that it helped us [stem] the panic and get the economy growing again. And it probably saved somewhere between a million and a million and a half jobs.
Italics mine. The president is, once again, lying. Greg Mankiw, to cite one of scores of possible examples, is an "economist who's looked at it," and he had an op-ed in The New York Times just yesterday that cited several other economists who have looked at stimulus packages throughout the ages. His conclusion?
Successful stimulus relies almost entirely on cuts in business and income taxes. Failed stimulus relies mostly on increases in government spending. […]
A growing body of evidence suggests that traditional Keynesian nostrums might not be the best medicine.
Obama is a political master at drawing boundaries around the "respectable" debate and marginalizing a swath of his critics as being beyond the pale. Will he succeed at doing it with economics, too? We only know that he will try.