Economics

It's Not the Size of the Stimulus.

|

Here's Jill Lawrence at Politics Daily:

After talking to five economists, I can give you the bottom line: Spending the money differently probably wouldn't have changed our circumstances much. But the economists took diverse paths to that conclusion, and they have varying opinions about where to go from here….

A bigger stimulus would have been better, several economists told me. "If there was an obvious problem with it, it was sheer size," said Josh Bivens, an economist at the labor-backed Economic Policy Institute….

David Madland, director of the American Worker Project at the liberal Center for American Progress, would have liked to see the administration "pour money" into Americorps, Teach for America and caregiver jobs. "The moment for that kind of major investment was right at the beginning," Madland said. "If they had pushed for much greater public service and direct care jobs, I feel pretty certain they would have gotten them."…

The overriding problem, Bivens said, was that "the non-recovery act economy just continued to stagnate" over the life of the stimulus. Businesses did not hire enough and bankers didn't lend enough. State and local governments cut back spending and so did average Americans….

Bivens said his no. 1 priority would be more aid to help state and local governments keep their workers. "We lost 48,000 jobs in July alone," he said. "That's an obvious hole that needs to be filled."

Joshua Green in The Atlantic:

Last week, the Congressional Budget Office published an analysis of what the stimulus has done. It calculated that the package has lifted GDP by between 1.5 percent and 4.1 percent and reduced the unemployment rate by 0.7 to 1.8 percentage points. In other words, the stimulus has worked—but not well enough to produce an adequate recovery.

This came as no surprise. Earlier this year, the White House considered calling for reinforcements. But political caution again took precedence, and any further stimulus initiative was deemed unfeasible on the grounds that it wouldn't pass Congress and that the public would recoil at the added size of the deficit. The president kept quiet. The strategy adopted was to pass a series of small measures—a $50 billion unemployment bill, a $40 billion tax extenders bill, a $30 billion small business bill—that they judged should collectively produce a big effect.

Meanwhile, Douglas Schoen at The Daily Beast blasts "Obama's Too-Small Steps on the Economy" and argues for "expand[ing] lending through the Small Business Administration's loan program to encourage more startups and enable small businesses to hire and train more workers," "jump-start[ing] the economy by investing in green technology and create new jobs and make the United States a leader in clean-energy manufacturing, especially solar, and expand the innovation and development of renewable energy," and "expand[ing] the federal research-and-development tax credit to businesses that invest in research and development, and increase research grants to small businesses that are developing new technologies." Schoen also says declare a payroll tax holiday, don't repeal the Bush tax cuts, and "advocate spending cuts," which seems a bit contradictory to all his other proposals.

What does all this sort of chattering add up to? Not a lot more than wish fulfillment. The great contribution of Amity Shlaes' 2007 history of the Great Depression, The Forgotten Man, was its emphasis on how regulatory and political uncertainty froze the economy under FDR's tenure. As she told Reason:

Both the Hoover and Roo­sevelt administrations (but especially the Roosevelt administration) were so unpredictable. That hurt the economy very much, and when I went back and saw the extent I was astounded. Uncertainty is a factor that I thought needed to be explored. There were lots of people who said, "I will not invest 'til I know what's going to happen."

During the Depression, you heard the phrase "bold, persistent experimentation" all the time. We've been taught that was good. Somebody had to do something, was what we learned. But what I saw was this enormous cost, especially during the second half of the 1930s.

Read the whole Q&A with her here. If it's at all true that uncertainty—both economic and political—freezes people, then we're living in the equivalent of an ice age. Lawrence's large point in her piece is that Obama might have hurt the stimulus' effectiveness by also trying to do 50 other things at the same time (especially health care). And that's leaving aside the massive lack of evidence that stimulus spending has ever worked or is even theoretically coherent. (Don't be confused by the idea that the stimulus boosted GDP; government spending does by definition.)

Since then, we've seen only flips and flops on virtually every level, right up to the specter of Dems calling for tax cuts before the midterms (sure, but how long will they last?). And everybody but the dumbest chumps in the world knows that the housing market ain't near bottom yet. Indeed, desperately propping up housing prices, which the O admin has been trying to do, only makes the final day of reckoning that much vaguer (and more brutal).

I find the case for austerity persuasive, especially if it allows a quick dive to the actual bottom of a recession, but more than that, we're in the worst possible situation: an indecisive president (who can't even give a straight opinion on something as inessential as the Ground Zero Mosque & Bowl-a-Rama), a big swing election coming up, presidential economic advisers fleeing the White House like a plague ship, no clear sense of where the new season of Mad Men is heading.

In short, the number of "known unknowns" is multiplying faster than Jerry Lewis spanking fantasies and until we get some pols and policies in place that convince people they will follow a particular course of action for at least six weeks or a year or so, don't expect things to get better anytime soon. It's terrible to say that a bad policy that's certain is better than a good policy that may be changed constantly (especially since TARP, the auto bailout, stimulus, health care, etc. all qualify as bad), but even a rhesus monkey can tell you that predictable shocks are less ulcer-inducing than random ones.

NEXT: Wrestling With Libertarianism

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.

  1. The overriding problem, Bivens said, was that “the non-recovery act economy just continued to stagnate” over the life of the stimulus.

    Sheesh, even I knew that.

    1. If Christina Romer is confused and depressed…buy Haagen Daz stock NOW!

  2. Business hates unpredictability.

    Iron law no. 13?

  3. Looking at that photo, we now know the who the parents of that Six Flags guy are.

  4. Almost makes you wonder how the USSR failed with all that money the government pumped into the economy.

  5. A bigger stimulus would have been better, several economists told me [Jill Lawrence, Politics Daily]. “If there was an obvious problem with it, it was sheer size,” said Josh Bivens, an economist at the labor-backed Economic Policy Institute[…]

    David Madland, director of the American Worker Project at the liberal Center for American Progress, would have liked to see the administration “pour money” into Americorps, Teach for America and caregiver jobs.

    Hail the unproductive!

    1. Exactly. What the fuck would that have done but subsidize yet another swarm of tax lice?

  6. The Ascended One is on the teevee, with the blamethrower on full dispersion mode.

    Hint: the evil Republicans are wrecking his beautiful command economy. Approve the Five Year Plan, Comrades! Your counterrevolutionary foot-dragging has been noted.

    1. Let me be clear, tovarishch! Republicans are wreckers!

      1. I wonder how many people would understand the reference to wreckers.
        More here than the general public for sure. I only read a few excerpts from “Gulag” but for some reason that stuck in my head.

  7. In addition to the unpredictability, the bailouts prevented a round of failures in the banking sector and general economy that needed to occur.

    “We had to stop a cascade of failures!” No you didn’t.

    The valuable and performing assets of the zombie banks wouldn’t have disappeared. They would have passed to new owners. The valuable assets of those bank customers who couldn’t have survived a round of bank failures wouldn’t have disappeared, either. They would have passed to new owners. And those new owners would have been in a better position to grow because their balance sheets would have been a lot cleaner than the existing firms, and because they would have acquired all these assets at fire sale prices.

    If we had let the indebted consumers fail – by not playing “extend and pretend” with HAMP, by not extending UI for two years, and by repealing the new bankruptcy law – they too would have found themselves in a better position to move forward following their capitulation.

    The problem is we have consumers still carrying unsustainable debt loans who haven’t capitulated and who are trying to muddle through with government assistance, and banks and businesses that are only hanging on because they were bailed out. Neither of those groups is going to make any bold decisions about spending or investment to get us out of recession.

    Sometimes you have to let people fail, not only because of moral hazard, but because failure hits the reset button on growth.

    1. The valuable and performing assets of the zombie banks wouldn’t have disappeared.

      Your next book?

      Fast or slow zombie banks?

      1. Do zombie banks eat the living’s accounts.

        1. Even better, they eat the accounts of the unborn.

    2. Oh, and everything you wrote there is dead on.

    3. Exactly. And that is exactly what happened to Japan in the 1990s. And worse still, we had been through this in miniature with the S&L crisis. There, they actually closed banks, make good on depositors’ accounts and sold off the assets for whatever they could get. It cost a fortune, but it ended the uncertainty and set the table for the recovery that followed. That happened at the same time as the Japanese did just the opposite. And the Japanese and US economies in the 1990s served as a living model of which approach was right.

      But these dumb mother fuckers learned nothing. Part of it I think is that the S&L crisis was a bunch of relative small timers in the Southwest. It was easy to close down their banks and throw them in jail. The 08 collapse was people who “mattered”. So we couldn’t let them go broke. Biggest theft in US history.

      1. My failure to learn is Bush’s fault.

      2. I was saying this in 2008. TARP == Japan of the 90s. Our choice was 10+ years of stagnation or 2 damn bad years. And I favored the latter.

        Crash the economy and then build it back.

        And always, he fought the temptation to choose a clear, safe course, warning “That path leads ever down into stagnation.”

        Apparently enough politicians havent read Dune.

        1. And you were right. At first they had me fooled. I thought TARP was the right thing to do. But it was pretty clear even before they passed it, it was a terrible idea.

          The thing is that it cost so much money. They could have used that money and done some things to lessen the shock, but still let the banks crash and cleaned out the bad assets. Virtually anything they could have done would have been better than TARP. But, TARP allowed a bunch of very connected people on Wall Street to escape responsibility for their actions. And that was what it was all about.

        2. Build it back how? Magical market fairies? What mechanism would have prevented a negative feedback loop that could have caused misery in perpetuity?

          1. The mechanism that prevented every other economic slump and crash in history from not being permanent.

            This stuff has only failed every time it has been tried. If it didn’t appeal to the lust for power among politicians and people like you’s superstitions, it would have been long since abandoned like eugenics and phrenology.

            1. Which mechanism would that be? Keep in mind that this was a potentially depression-level slump.

              Wait let me guess, the Great Depression would have been over in a couple years if not for all those meddling politicians.

              1. Tony, this slump pales in comparison to the 1873 or the 1837 slumps. Bad businesses fail and new ones arise. That is how it works. Every slump in human history ended on its own in a couple of years. That is until the 1930s when the geniuses in Washington decided they knew better. It was only a “Great Depression” in the United States. The rest of the world recovered in the 1930s. The US didn’t thanks to ideas that you still bitterly cling to.

                1. You mean the parts of the world that were spending money on war apparatus? Sort of how once America started spending money, the GD ended?

                  Falling demand and joblessness can compound each other. You still haven’t said how we get out of that without someone (government) picking up the slack and ending the cycle. You just appeal to the magical market and think that suffices for an argument.

                  1. “You mean the parts of the world that were spending money on war apparatus?”

                    No. The arms race didn’t begin until the late 1930s. The early 30s were spent in denial that Hitler or Japan was a threat. Yet, the UK and France recovered.

                    Further war spending doesn’t help your economy. You are just spending assets on guns and tanks that could go to things like refrigerators and hospitals that would make life better.

                    It is funny, you are a liberal and no doubt well steeped in the threat of the military industrial complex. Yet you seem incapable of putting two and two together. If the military industrial complex is such a threat, it wouldn’t be good for the economy you idiot.

                  2. When did the GD end?

                    Spenders give credit to the war effort.

                    Of course they do!

                    But, did the DOMESTIC economy recover with the war?

                    No.

              2. Falling prices. Eventually, prices get to a point that the market agrees they are low enough to begin buying again.

                1. Bingo. Also, see Fluffy’s post above.

                  1. And government interference in that mechanism – preventing the falling of prices – will only prolong and deepend the crisis. As we are seeing now.

                    1. Hey, I got mine… I’m well-off, I have more than one home and a private beach. You capitalist pigs, however, need to have your asses handed to you next April 15th.

                    2. I can’t actually tell if this is a spoofer or not. It’s vicious, vindictive and authoritarian, everything we’ve come to love with Tony, but he’s rarely this honest.

                    3. A spoofer. I don’t actually like boasting about my own situation, but sometimes it’s necessary to counter typical right-wing assumptions that my policy preferences come from a place of wealth envy. Not that you guys are qualified to diagnose psychological motivations through the Internet. Doesn’t stop you though.

                    4. to counter typical right-wing assumptions that my policy preferences come from a place of wealth envy.

                      Do “right wingers” assume this?

                      Personally, I’ve cone to think that leftist policy preferences come from a desire to exploit those that do suffer wealth envy, that the construction of the dialog that “defines” human reality must promote class consciousness and its corresponding resentment.

                      The “dialog” can be very powerful and sucks a great many well intentioned souls into its construct by their guilt at being well off.

                    5. Let’s get one thing straight, everyone suffers from “wealth envy” except perhaps the single richest person in the world. It’s all relative. There is no magic line after which the wealthy become satisfied with what they have, though various studies have shown that beyond a certain minimum level, more wealth does not increase happiness–it’s all relative to your wealthier neighbor.

                    6. If by “wealth envy” you mean:
                      I wish I could afford an Audi A8 Quattro, but I can’t, then yes, I have “wealth envy”.

                      If you mean:
                      I should be able to have all the nice things “rich” people have and it isn’t fair that I can’t, then no I don’t suffer from that affliction.

                    7. Let’s get one thing straight, everyone suffers from “wealth envy” except perhaps the single richest person in the world.

                      I don’t. I know there are people who can sit around doing nothing and make more money every second than I make in an hour, but the only time I ever think about that is when somebody else brings it up. On even $15,000 a year I could afford everything I want and still have thousands left to spare because I’m not a materialistic person, so why would I care about anyone else?

                      If anything, I feel sorry for the people I’ve known who “can’t” live without six-figure salaries or more because they “have to” own this and that. The people like that who have to work to feed their habits are giving up their lives and relationships, and even the people who pull in all their money from investments are caught up in a depressing eternal game of never having enough and always seeking more.

                    8. Highly unlikely.

              3. Because people want to make money to buy food, shelter, clothing, cell phones, etc.

                What makes the economy go in the first place is not government cranking some mystical handle.

          2. Build it back how? Magical market fairies?

            The statist mindset on display. Nothing outside the State, eh, comrade? If the government doesn’t do it, it can’t/won’t/doesn’t happen.

            What mechanism would have prevented a negative feedback loop that could have caused misery in perpetuity?

            We have any number of real-world examples of massive state intervention/control being the mechanism that triggers a negative feedback loop causes misery, so there’s that.

          3. “could have caused”

            *snicker*

            Okay, Nostradamus.

          4. Presumably, the same way the markets were built: voluntary human interaction. Central planning can’t build a market (unless they copy an actual market, like Soviet economists did with the US and Britain).

          5. The negative feedback loop is mathematically bound.

            Prices for assets cannot go to zero.

            Unemployment cannot go to 100%.

            Wages cannot go to zero.

            After a true capitulation, a point is reached at which prices and wages have fallen far enough that those still standing start buying.

            The Great Depression was worsened by the fact that Hoover and then Roosevelt did everything they could to avoid that moment of capitulation.

            And every day of the news cycle from 2007 to 2009 was another episode in the saga of attempting to prevent capitulation. TARP, the bailouts, the Fed’s money market fund intervention, the Fed’s commercial paper intervention, the Bail Sterns intervention, the restriction on short selling, all of it. One desperate attempt after another to prevent capitulation. And here we are.

            1. Fluffy, you and I but heads about a lot of things. But I am going to stop being a dick for moment and say that that is about as well stated a description of the flaws in Keynesian theory as has ever been put up here.

              Seriously, in a few paragraphs, that sums it up perfectly.

    4. Well said.
      Its suppose to be profit and LOSS.

  8. no clear sense of where the new season of Mad Men is heading

    I have a very clear sense, and I will share it with you. Don Draper will spiral further and further into irresponsible, self-destructive alcoholism until he hits bottom, dragging the agency down with him, after which he will look himself in the mirror, have an epiphany, shave his pretty face and rise again like a skinny-tied phoenix. Sin and redemption, the ageless theme of Judeo-Christian entertainment.

    1. I’m hoping Betty kills herself and season 5 is a wacky sitcom about an alcoholic womanizer trying to raise three kids during The Summer of Love.

      And he starts calling himself Dick-Don Draperman.

      1. And he discovers that his new wife is a witch!

        1. Roger would have to gain some weight to pull off Larry Tate, but it could be done.

          1. Things really get insane when Dick-Don’s wife’s twin sister shows up!

            1. Twin cousin.

              I can’t explain how, but that was the premise.

              1. I have a “twin” cousin. We look nothing alike and are of opposite sex, but we were born on the same day.

  9. This is what I like to call the drug warrior rationalization. You make an expensive policy based on flimsy reasoning that ultimately and dismally fails to produce any of the results it’s intended to create.

    Then, in order to maintain ideological conformity in the face of abject failure, you claim that the policy was sound, it just wasn’t done in a big enough way. So, in other words, the policy will work, you just need to throw a lot more money at it. Then, if it does show any results at all, you tout those as proving the policy works and that it needs even more money thrown into it.

    Fortunately, the stimulus approach is so fucking expensive that this cycle can’t go on for decades like the war on drugs. Unfortunately, once it runs its short course, America will be bankrupt.

    1. This can also be said about Education, the War on Poverty, and any number of expensive yet ineffective policies.

  10. You guys probably won’t even click, but here is Krugman explaining why all of you are wrong. Pay attention to the bit about Germany.

    1. Krugman is a Keynesian. Why should we listen to anything he has to say?

      1. You don’t value reading opinions of people who aren’t a part of your ideological clique? Why should anyone listen to anything you have to say if you’re so intellectually incurious?

        1. You don’t value reading opinions of people who aren’t a part of your ideological clique?

          This might have some sting if Krugman himself wasn’t banning thought-out refutations of his ideas on his own blog.

          Fuck off, troll.

          1. *I* only read opinions of people who are a part of *my* ideological clique, but it’s okay for me to point out that flaw in others – especially when they disagree with the people who tell me how to view the world.

            1. In case you missed it, bright boy, Nick Gillespie already linked your story. Go look for a link to the LvMI on Crook and Liars or Yglesias’s site.

            2. Idiot spoofer, perhaps you didn’t notice, but I spend a lot of time on reason.com where I disagree with most everyone on most everything.

    2. I have no problem reading other peoples opinions, but the link didn’t work.

      1. Ah, it was a very elaborate joke. I am ashamed I fell for it. Kudos to the spoofer.

        1. Why did the stimulus need to be bigger? Why couldn’t it be implemented in a shorter period of time, thus creating the effect of a larger, longer-termed stimulus?

          1. The amount of stimulus was essentially arbitrary–a political decision and not an economic one. They wanted to keep it under $1 trillion, when the hole it needed to fill was closer to $3 trillion.

            1. That didn’t answer the question.

              1. Whether the money was spent immediately or over 5 years it still needed to be bigger than it was. Notice how the economy was in decent growth mode until all the government aid programs started expiring. That right there contradicts everything you guys say about the ability of government to help the economy.

                1. That growth was a total fantasy. GDP went up purely because government spending went up. There was no real growth. And unemployment numbers improved moderately because of the Census.

                2. Whether the money was spent immediately or over 5 years it still needed to be bigger than it was.

                  Huh? So timeframe doesn’t matter? That makes no sense at all.

                3. When you’re “in a decent growth mode” and the only reason for GDP growing is the government expenditure portion of GDP you aren’t in a sustainable growth pattern.

                  I’m not seeing the contradiction. I don’t doubt for a minute that government can influence GDP (I’ve never seen anyone say it can’t), but that doesn’t mean the influence on the economy (as measured with GDP which isn’t an absolute measure of standard of living, or other broad aspects of an economy) is doing well or that the influence is positive or sustainable.

                  Keynesian theory has now failed twice (with the latter going bigger), and the same excuse is being used for each failure.

                  Something about doing the same thing and expecting different results…

                  1. Look at that stimulating effect tony. Look at it go! Or is employment not a factor of a “a decent growth mode.”

                    http://www.aei.org/article/102495

                  2. I believe the definition of GDP has govt. spending in it so it has to go up by definition if spending is increased.

                4. Whether the money was spent immediately or over 5 years it still needed to be bigger than it was.

                  Over the next 5 years, the Feds are going to run a $7 trillion deficit… That’s not enough?

                5. —“Notice how the economy was in decent growth mode until all the government aid programs started expiring”—

                  That’s not called a growth mode. That’s called shifting demand forward a couple of months to take advantage of the government handouts. After the handouts ended, demand evaporated because the consumers ready/willing to buy had already done so while taking advantage of the “free” money.

            2. Wow. You really don’t understand economics at all.

              1. I think he’s saying we need China to pay our bureaucrats a lot more money.

        2. Krugman does not seem to understand what Germany did. Which wasn’t “a lot of stimulus”. Germany’s stimulus spending was pocket money compared to Bushed and O’Bummer.

    3. It’s so fucking hard to read him when his first paragraph is him putting his politics in the spotlight, then, after he’s said his piece, him saying, “let’s put politics aside (after I’ve said what I wanted to.)”

      And then it gets better when he says the only two groups who opposed the stimulus were the ones that said it wasn’t big enough and the ones who said it was a little too big. I’m pretty sure there were plenty of people over here who were in a third camp who said that the stimulus shouldn’t even exist at all.

      I don’t mind reading other people’s points when they’re not full of false dichotomies and strawmen.

    4. Looky, Tony, here’s Krugman, displaying the shortest fucking memory in the history of short memories. With this sheer level of unadulterated stupidity, why would I ever listen to anything Krugman has to say on anything?

    5. You can’t explain it yourself?

    6. I tried, so that I could think of how to refute him, but the link seems to be dead.

  11. here is Krugman explaining why all of you are wrong.

    I don’t believe in phrenology.

    1. But you believe in libertarianism. No evidence required. You’re right by definition. Anyone who disagrees is wrong by definition.

      1. You’re saying YOUR belief system is the one true path, Tony. Hypocrite much?

  12. What mechanism would have prevented a negative feedback loop that could have caused misery in perpetuity?

    Dumber

    and

    dumber

    and

    dumber…

  13. Bivens said his no. 1 priority would be more aid to help state and local governments keep their workers.

    *sigh*. fucking *sigh*

    The only stimulus I could have gotten behind is that if state and local government started wholesale firing their workers. Imagine the benefits to the economy.

      1. I wanted to go to your link. Really I did. But…

        1. Fuck…what’s the secret?

          1. Preview?

            1. I did preview on a subsequent post, but the URL didn’t show up as a link. I did the one above with standard html < a href=… syntax, but it didn’t seem to work.

              1. Apparently you just paste the link in as text & the squirrels convert it for you. If you try to put it in HTML, the squirrels get sad and it doesn’t work.

                1. and, of course, the sqirrels

  14. This whole blogpost just depresses me.

    Obama administration: The stimulus will work!

    Me: No it won’t.

    Obama administration: Yes it will!

    Me: No it won’t, wanna bet $100 on it?

    Obama administration: Absolutely!

    *stimulus occurs*

    *stimulus fails spectacularly*

    Me: I’ve come to collect my $100. I could use it given the state of the economy.

    Obama administration: No.

    Me: You lost the bet. I want my $100 bucks.

    Obama administration: The stimulus WOULD have worked had it been big enough. All of our theories are correct, so you lose the bet.

    1. Just make sure all your premises are stated so as to be unfalsifiable, and your life will be sublime.

    2. Stimulus fails spectacularly in what way? The economy is showing very modest growth instead of strong growth, yes, but that’s better than it contracting. So yes the stimulus failed to fix the entire economy and spur strong long-term growth. That’s why it needed to be bigger or we need another one. But it’s hardly a “spectacular” failure unless you’re a dumb ideologue who would say that no matter what the conditions.

      1. And here we have the infinite get out of jail free card. “It would’ve been worse without all that spending!”

        1. The more you spend, the more you save!

        2. It quite obviously would have, unless you can explain how we go from massive downturn to modest growth pretty quickly by some other means–including factoring in the stimulus which you guys claim only caused problems.

          1. It’s quite obvious that neither you nor anyone else is capable of proving what “would have happened” absent Obama’s porkulous spending plan.

            1. True, and this is the difficulty of the political situation. It’s very hard to make the case that it could have been worse, since we don’t have that alternate universe to assess.

              But I can still ask you to explain what made the economy go from scary massive downturn to modest growth even despite the evil stimulus.

              1. What made every economic downturn in history that occurred before the era of government intervention turn around?

                Because all of them did – without any “help” from the government.

                1. None quite so quickly. Before the idea of government intervention existed we had pretty regular boom and bust cycles and they each tended to last years.

                  1. Bullshit the longest one in history, the Great Depresssion coincided with the the government first interveneing in a massive way.

              2. Because people want to make money to buy food, shelter, clothing, cell phones, etc.

                What makes the economy go in the first place is not government cranking some mystical handle.

              3. Because people want to make money to buy food, shelter, clothing, cell phones, etc.

                What makes the economy go in the first place is not government cranking some mystical handle.

          2. Again, your “modest growth” is an accounting fiction.

        3. And it’s pretty rich to accuse me of playing an unfalsifiable trump card when you guys always have the ultimate one up your sleeves… “government exists, ergo it is to blame for everything.”

          1. Do you keep these straw men in your pocket?

      2. Obama, in a much noted speech, stated that the stimulus would keep unemployment below a peak of 8%. Unemployment today is 9.6%.

        F A I L

        btw Don’t even bother to counter with any “nuanced” argument. If I say I will do X, and I don’t, I have failed. Everything else I say is just an excuse.

      3. No, Tony, I would give the administration their due if the stimulus had done what the administration said it would have. Well, the falsifiable stuff, that is. That ‘create or save’ 3,000,000 jobs bullshit didn’t even pass the laugh test.

        Oh, late breaking news for you, Tony.

        1. C4C may not have brought new buyers into the market, but it’s possible that it helped stimulate the economy in the short-term–with the hope that in a few years (when these buyers would have been getting their new cars sans C4C) the economy would be strong enough on its own.

          1. C4C may not have brought new buyers into the market, but it’s possible that it helped stimulate the economy in the short-term

            My heart’s aflutter. Except if you read the study, it did stimulate the economy in the short term, only to have the economy take a counterproductive dip immediately after.

            And I believe that the study authors are actually too kind to the Obama administration. Because the study didn’t look at all the other likely downside factors of C4C:

            Used car sales inventories and sales perversely changed for the worse by C4C. Low income buyers who rely on those used car sales and inventories for transporation etc. The volumes of totally viable, but now destroyed cars– what effects there? I’ll concede to you that maybe the scrap metal industry saw a boost of raw material.

            Oh wait, but shifting goalpoasts! Congress didn’t claim that it was to help car sales, but an effort to get “gas guzzling cars off the street”. Except, the Obama administration continues to defend the economic benefits of C4C which were “a wash”.

            Christopher Carroll, a Johns Hopkins economist who until last month was a member of President Obama’s Council of Economic Advisers, said he wasn’t convinced by the new study.

            He cited a survey that found that cash for clunkers persuaded people to buy a new car two or three years earlier than they would have otherwise.

      4. By Obama’s own metric, Tony. The Obama Administration said unemployment would hit 9% without the stimulus, but only 8% with it. Well, we got exactly what Obama wanted, and unemployment hit 10.2%.

        In my mind, that means it actually made things worse. No?

        1. Yes they got the numbers slightly wrong, but what if there had been no stimulus? Lots of smart people were predicting much higher jobless numbers than we got in the event of no government action.

          1. Are these the same smart people who predicted a ceiling of 8%, or different smart people?

          2. I think the take-away from this is that all the smart people can make all the predictions they want and a lot of them will be utterly wrong.

            I don’t make economic predictions because, unlike the smart people, I’m honest enough to admit they would be utter crap. Which is probably why I have to work for a living.

          3. According to the administration’s own doomsday scenario, employment would be lower than it is now, sans stimulus.

            I’ll let the obvious, painful conclusion sink in.

            1. So the only thing you guys have is that Obama’s team was off by a percentage point in its jobless predictions? Therefore it was a total failure… pretty weak.

              1. That’s the same evidence you cite for its success.

                It can’t be proven one way or the other by numbers and predictions.

              2. No, our evidence is that the administration’s own numbers say that the stimulus had the opposite effect of what was predicted.

              3. When you say 8% and you get 10%, that is being off by 25%. 10% is 25% larger than 8%. Throw in the fact that it has been exceedingly rare to have 10% unemployment in the last 100 years and yet this happened after the stimulus. The price you pay for the stimulus comes later. A bigger debt and higher interest payments on it, possibly inflation, or if taxes are higher, you have the lost spending by individuals and businesses which, no matter what you think, have to be more efficient than if it is spent from the top down.

          4. None of your stimulus cheerleaders claiming how bad it “would have been” is the least bit capable of proving that the probability that the stimulus had a net positive effect is one iota higher than the probablilty that it had a net negative effect.

      5. Uh, most economists are saying that we’re on the verge of another recession.

      6. —“The economy is showing very modest growth instead of strong growth”—

        I don’t know anybody (anecdotal, I know) who has seen any uptick in the general ecomony. The only evidence of growth is the governments’ proclamations of growth, which are subject to revision next month.

        So we have to take their word that the stimulus would work and take their word that is has worked, and the only problem is that we should have made it bigger so it would have worked better?

        Ah, bullshit.

  15. “Last week, the Congressional Budget Office published an analysis of what the stimulus has done. It calculated that the package has lifted GDP by between 1.5 percent and 4.1 percent and reduced the unemployment rate by 0.7 to 1.8 percentage points. In other words, the stimulus has worked — but not well enough to produce an adequate recovery.”

    Gee I wonder why none of these so-called “impartial journalists” can find the time to do a little actual investigation and point out that the CBO report is merely an exercise in circular logic.

    All the did was plug the spending imputs into a model that ASSUMES Keynesean economic theory is valid and create estimates of what the result would be if it is.

    Since no one has every – you know – actuall proven that Keynesean economics has ever worked in the first place, their calculated output proves nothing.

  16. I love how the first quote plays EPI as the unbiased counter to CAP. Do these people ready anything else from these unbiased institutes before declaring them unbiased?

  17. C’mon, Gillespie, when are we gonna get Two Monkeys, One Football?

  18. David Madland, director of the American Worker Project at the liberal Center for American Progress, would have liked to see the administration “pour money” into Americorps, Teach for America and caregiver jobs. “The moment for that kind of major investment was right at the beginning,” Madland said. “If they had pushed for much greater public service and direct care jobs, I feel pretty certain they would have gotten them.”…

    You poor stupid leftist son of bitches. On a fundamental level, you just don’t get. You tell yourselves that what might be government waste during the good years is actually a net good in the bad years when the private economy isn’t producing squat.

    Madland, sweety, let me explain this to you. Even if the policies you advocate drained the private market of every single job in it, every penny going to AmeriCorp would still be wasted on activity that can’t be self sustained plus accumulative value which is the heart of whether something is productive or not.

    1. AWP AWP AWP

      1. Not ringing a bell.

        From the dictionary of acronyms we have:

        AWP Awaiting Parts (military equipment status)
        AWP Average Wholesale Price
        AWP Annual Work Plan
        AWP Associated Writing Programs
        AWP Amusement with Prizes
        AWP Aerial Work Platform
        AWP Any Willing Provider
        AWP Association for Women in Psychology
        AWP Arctic Warfare/Police (Counter-Strike)
        AWP Association of Web Professionals
        AWP Australian Women’s Party
        AWP Aviation Weather Processor
        AWP AlphaWolfPack (gaming clan)
        AWP Association of Women Professionals
        AWP Availability Work Package
        AWP Allied Weather Publication
        AWP Assembly Work Platform
        AWP ASEAN Women’s Program
        AWP Automatic Weapons Permit
        AWP Associate Web Producer (gaming)
        AWP Amusement with Payout
        AWP Apparent Wave Period (oceanography)
        AWP Acoustic Wall Panel
        AWP Alice Water Project (La Mirada,CA)
        AWP Alternate Work Pattern
        AWP Australasian Wood Products
        AWP Associate of Woolwich Polytechnic (UK)
        AWP Advanced Wireless Paging

        I’m going to assume given you think like a flunky and are an advocate atrophy over productivity it must be a government program you are trying to get across there but to humor you without anymore input than that is just a waste of my time.

        Speak American!

        1. AWP Automatic Weapons Permit

          ooh, I want one of those. Anybody know anything about that?

  19. The one thing I don’t get with the stim-pimps is why they think there is some fixed number (the Mystical Multiplier) of returns for stimulus spending?

    Imagine if only a hundred grand of the stimulus found its way into the proverbial genius-in-his-garage who then uses the stimulus funds to perfect mobile proton-born fusion devices that cost ten dollars each to make.

    Why, in that scenario, the whole stimulus was worth it just from that one guy efforts because he has created what will be $trillions and trillions$ worth of future economic activity and wealth, in our lifetimes, and saved us from CarboHell to boot.

    But if all that capital just finds its way into endeavors and infrastructure that will never generate a return matching the loan and interest we took out to “invest” in it (think public education, combat helicopters for Mexico, the calories it takes to keep Henry Waxman operational) then it will be a financial bust.

    From what I can tell, with 140 million people in the work force (and working), the USA in aggregate has about $100,000 per-job in total of GDP. Even if you factor in the stimulus spent (~$500,000,000,000…holy shit that’s a big number if you write out the zeros!) and the highest number possible for jobs “saved” at 3.3 million, then the stimulus works out to about $150,000 per job, which is 50% more expensive on a per-job basis per dollar than the wider economy.

    So to use what-I-am-sure are Keynesian buzzwords, in terms of “jobs efficiency” the stimulus performs at a lower level than the wider economy as a whole, and has discernible rate-of-return commensurate with the interest to pay for it.

    It does not give me hope for the Republicans that they cannot find such easy arguments as demonstrated above and instead cook up lame grammatically tortured one-liner adverbs like “Jobs-killing” as an argument against the stimulus. We’re all fucked.

  20. I am going to go dig up John Maynard Keynes’ corpse and kick him in his dessicated nutsack. Who’s with me?

    1. I am. But I need somebody to pay my airfair.

  21. Taobao wholesale Company Sells newest Style Replica Handbags . Designercheap LV handbags , copy replica, exact replica, designer replica, mirror image.,Brands contain Louis Vuitton hand bags,handbags wholesale,Gucci handbags,Coach handbags tote bags,Chole handbags,Fendi handbags,Miu miu handbags,Givenchy handbags,Hermes handbags,chanel handbags online ,Marc Jacobs handbags,Jimmy choo handbags,Kooba handbags,Dior handbags,Prada handbags,Versace handbags,Mulberry handbags,Thomaswylde handbags,YSL handbags,D & G handbags,Loewe handbags,Juicy handbags,Lancel handbags,whoelsale capsAnya Hindmarch handbags, Armani handbags;
    Quality: our replica bags are sourced from experienced factories experienced in the production of top quality items. We are devoted to the Retail and Wholesale of AAA+++(99.9% mirror copy) Designer bags

Please to post comments

Comments are closed.