Gridlock

Thank Gridlock for Economic Turnaround

A political system is often at its best when it does nothing.

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The Obama Boom is finally here. Gross domestic product grew by a healthy 5 percent in the third quarter, the strongest growth we've seen since 2003. Consumer spending looks as if it's going to be strong in 2015. Unemployment numbers have looked good. Buying power is up. And the stock market closed at 18,000 for the first time ever. All good things. So what happened?

Here's David Axelrod on Twitter: "Note: The quarter before Obama took office, the U.S. economy SHRUNK by 8.9 percent, worst since 1930. Last quarter it GREW by 5 percent, best since 2003."

Note: Contrasting the most severe quarter of your predecessor's with the best one in your six-year presidency—one filled with extravagant and unmet economic promises—may strike you as a bit hackish. But let's go with it.

Axelrod isn't alone is claiming political credit for economic success, and the Obama administration certainly isn't the first to try to take the glory. 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.

He does this because, in theory, left-wing economic policies can never lose. For years, the administration rationalized the crippling unemployment we experienced by spinning a comforting counter-history: Things would have been a lot worse. But didn't the stimulus fail even if we judged it on its own promises? Well, it should have been bigger. Wasn't this the slowest recovery in history? Well, this was the worst situation since the Great Depression.

The Boston Globe, in an editorial reflecting much of the evidence-free praise the president has gotten, spins another myth. It points to policies passed in 2010 as the reason for growth today. But it's just as easy—and more plausible, when we consider the history of our strong emergence from severe recessions—to suggest that the economy could have been a lot better had the administration alleviated many of its early regulatory and tax burdens. Or done nothing. Certainly, a person could just as effortlessly argue that shoehorning huge agenda items under the guise of spurring growth was more harmful than helpful.

"People often don't realize that a political system is sometimes effective when it does not do certain things." Pietro Nivola, a senior fellow in governance studies at The Brookings Institution, argued in 2012. "You can't just measure the things it does, the actions it takes; you also have to measure the actions it does not take." Nivola was impressed by how gridlock has the ability to stop the Republican House from cutting spending too abruptly for the economy.

And perhaps he's right. Gridlock has caused an odd but pervasive stability in Washington. Spending has been static. No jarring reforms have passed—no cap and trade, which would have artificially spiked energy prices and undercut the growth we're now experiencing. The inadvertent but reigning policy over the past four years has been "do no harm."

On the strength of good economic news, Politico reports that Obama will use his State of the Union address to roll out an agenda aimed at the stagnating wages and those Americans left behind to build on the growth. I'm going to take a wild guess and say that it's going to incorporate a lot of happy talk about "infrastructure" and a fairer reallocation of wealth. We need to grow from the middle out, if you will. No doubt, politically speaking, Democrats' fortunes are bound to improve somewhat as economic anxieties ebb. The president will surely see better approval numbers.

But let's hear specifics. As I remember it, the administration hasn't done anything in a long time. I know this because an incalculable number of op-eds have informed me that the president has had to contend with militant ideologues and has been unable to implement his agenda. I know this because I've had to listen to years of hand-wringing about politicians' inaction. You can't have it both ways.

NEXT: Americans Name Government as Country's Biggest Problem, Enjoy Your Obamacare Employer Mandate, Harry Reid Injured by Exercise Equipment : P.M. Links

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  1. Krugman is a synonym for cognitive dissonance.

  2. I’d agree that “stagnant stability” is a major factor in such “recovery” as might be going on, but another is that the markets have regained confidence that government bailouts will be forthcoming if things go south again. In many ways the clock has just drifted back to 2007, with none of the systemic problems that caused the last collapse really being addressed.

  3. I have absolutely nothing to say. But it is imperative that I say it before the spammers step in and introduce us all to the wonderful money-making opportunities that are available to our step-brothers aunt and our barber’s sister’s brother-in-law

  4. Hi David,

    This is a pretty funny article coming from the same people who told us that stimulus packages were going to wreck the economy and that the tax increases passed in 2013 were going to result in a double-dip recession. You say that it’s not clear what the Obama administration hasn’t really done anything to bring about prosperity. I would disagree… I ‘d start by pointing to the ACA, for example– probably the most far reaching governmental action in the economy since the enactment of Medicare.

    My question for you would be this… Hasn’t every libertarian and right-wing prediction of the harm that was going to come from things like stimulus spending, like the ACA, like tax increases on millionaires been shown to be embarrassingly and demonstrably untrue?

    1. You didn’t give a lot of specifics about failed predictions, so I thought I would:

      “Obama: ‘If you like your health care plan, you’ll be able to keep your health care plan'”

      “I will sign a universal health care bill into law by the end of my first term as president that will cover every American and cut the cost of a typical family’s premium by up to $2,500 a year.”

      And here’s a chart on the predicted effect of the Stimulus:
      http://www.aei.org/publication…..-politics/

      1. Hi,

        It’s interesting, isn’t it, that the AEI hasn’t updated the unemployment numbers since the first quarter of 2013. I wonder why that is. They must be pretty busy scraping the egg off their face so there’s just no time left for Excel spreadsheets for the right wing huckster economists that work there. I don’t feel too bad for them since I’ve heard the pay for people willing to tell billionaires how important they are is still pretty good.

        1. Are you a little slow?

          The graph flat lines at 5% unemployment in Q1 of 2014. The US is still at 5.8% unemployment and was around 6.8% during Q1 of 2014. There’s absolutely no reason to “update” the graph other than to further point out how wrong the Administration’s stimulus claims were.

          At best you could claim that both sides were wrong. But only one side spent $800 billion being wrong.

          1. And by the way, everyone knows that the six percent unemployment number is complete and unadulterated bullcrap, resulting mostly from people permanently dropping out of the workface. If the economy were truly booming for all Americans, usage of stuff like food stamps and the SSDI disability scam would be going down, and they’re not.

            Also, it’s kind of amusing seeing a person who calls himself “American Socialist” suddenly claiming to love our one percenter, Wall Street/Federal Reserve dominated economic growth.

        2. I take it from your silence on the actual topic of the article that you concede that reducing government spending relative to GDP (forced on Obama by the “obstructionists”) has been good for the economy?

          An being a socialist, I think that means you have and entire dairy aisle’s worth of egg on your face. Better get a mop.

    2. american socialist|1.2.15 @ 5:13PM|#
      “Hi David,”

      Hi, Dipshit,
      Pay your mortgage yet? Still licking mass murderer ass? Still the same slimy thief we know and despise?

    3. My family’s premiums didn’t decrease by $2,500/year. They increased by $5,600. And both plans are lesser to what they were prior to the ACA. Theft by regulation.

    4. My question would be this:

      Hasn’t every socialist prediction of the glorious results that would come from socialism in Venezuela been shown to be embarrassingly and demonstrably untrue?

      When the great example of south american socialism and “universal healthcare” results in medical shortages, recession, and 63% inflation, can we still pretend that hyperinflation is a myth, as long as good socialist are at the helm with control of the currency?

  5. Hi David,

    Just one more thing… When are these increases in inflation and a run on gold coming? Is it soon? It’s been like 40 years since guys like you have been talking about this?

    1. american socialist|1.2.15 @ 5:16PM|#
      “Hi David,”

      Hi, dipshit, do you have any cites that David has made such claims or are you just spreading lefty lies again?

      1. Hi, I couldn’t get past reason’s ridiculous 50 letters or more posting requirement, but if you Google David harsanyi and 5 ways to get America working again and read section 4 you’ll see the ye olde inflation canard. Did you catch the word “people” in my post? It means plural you know.

        1. Did you catch the word “people” in my post? It means plural you know.

          Yes we know that you are broadly generalizing in a plainly obvious attempt to build an army of strawmen.

          1. Was gonna say, I never bought gold in my life. But I guess to AS(S?), I’m still one of ‘you people’?

        2. american socialist|1.2.15 @ 7:18PM|#
          …”Did you catch the word “people” in my post? It means plural you know.”

          Hi, dipshit!
          So IOWs, you don’t have anyone who made those claims, you’re just taking a scattershot?
          Why, for some reason, I find it very easy to believe a slimy lefty would do something like that!
          Go lick mass murderer ass, slimebag.

          1. No, on the contrary, you can read the article I told you to search for, look at the CPI, and then wonder why exactly this particular writer is taken seriously.

            1. Which CPI? The entire CPI or the narrow CPI-I, a subset of the CPI.

            2. american socialist|1.2.15 @ 7:45PM|#
              Hi, shitbag!

              “No, on the contrary, you can read the article I told you to search for, look at the CPI, and then wonder why exactly this particular writer is taken seriously.”
              Well, dipshit, go look for an article that doesn’t prove your point and read that one!
              See, I can tell you to go look for something too! Like looking for mass murderer ass to lick.

            3. I wonder why Paul Krugman is taken seriously after he predicted 1) the internet would be a less important invention than the fax machine, 2) housing prices wouldn’t fall after the, err, housing bubble crashed, and 3) the recession would barely hit Europe, because all their welfare state policies would protect them.

              An yet I would guess you’re still fellating Krugtard the impenetrable as we speak.

            4. My question is this:

              Now that socialists are sucking democrat cock and declaring victory over unemployment, will they stop screaming “We need more social programs cause teknoology is steeling all the jerbs!” like a bunch of stupid, histrionic Luddites? Or will that masturbstory mantra go on, despite the fact that it’s been demonstatedly president Ben wrong since the agricultural and industrial revolutions? In other words, wrong for over a century?

              My money is on full retard.

              1. Damn you iPhone autocorrect:
                *proven

    2. Hi one more thing,

      I’ve noticed how often you call people to account for arguments that are irrelevant to both the topic and the person. Why do you do that?

      That question was of course rhetorical. We’re all aware of your passionate devotion to sophistry, which is why you should troll elsewhere.

      1. Oh, don’t say that, I like having him here. He’s like an adorable dumb cat that doesn’t know the floor is slippery and so keeps running into walls while chasing the cataract in his eye. Don’t scare him away, I’d have to find new amusement.

    3. amsoc:

      Just one more thing… When are these increases in inflation and a run on gold coming? Is it soon? It’s been like 40 years since guys like you have been talking about this?

      You mean this CPI?

      Yeah, inflation never happens. Except when you look at the damn chart.

      The only reason we don’t have inflation right now is because the fed is paying banks not to lend money, keeping that money out of the economy. If that’s your idea of socialist policy that demonstrates that inflation is nothing to worry about, then I had no idea that social central planning of the welfare state involved keeping so much money in the hands of bankers and out of the hands of the poor and the economy. Because, really, you can’t pull that money out of the fed and dump it into the hands of the poor without creating inflation, which is (apparently) what the whole point of your worldview is all about.

      Perhaps you should think about that. This is what I don’t get about you silly socialists: on the one hand, you keep telling us about the socialtopia you want to create, while claiming that the status quo is demonstrating the pure awesomeness of your logic. Like, we need to tax the rich 90%, but the status quo shows us that taxing the rich is great, when they’re taxed at 39%. Can you please post after you lose the schizophrenia?

  6. We have a good two quarters of growth, but we’ll need a couple of years at this level to make a well rounded booming economy.

    And the Unemployment numbers are a joke if you look at them with respect to the Labor force participation numbers. The Labor Force participation numbers are the lowest in decades.

  7. There is no economic turnaround. The GDP and employment numbers are Soviet/Chinese-style central planning government propaganda.

    GDP accounting methods were changed last year and a large chunk of the recent “growth” was forced consumer spending on ObamaCare.

    The bubble-fueled sectors are booming, but the real economy is still as dead in the water as it has been since 2009 – or 2000…

    Why are you taking this recovery narrative at face value?!

  8. 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.

    I read that column. That was the only part that made any sense at all.

    1. That paragraph also explained a great deal about how Paul Krugman got to be the way he is today.

      1. That paragraph also aptly describes what you will face if you continue reading his article.

  9. This is exactly why libertarians do best as a practical matter to vote R or D for president if we’re confident that congress will be the other color. Unless and until, of course, the Libertarian party finally gets is thumb out of its ass and nominates someone who’s actually electable enough to make a difference in the election.

    1. That was badly written, but you know what I mean.

      1. Very few, if any, Libertarians are electable because the system is designed by Harvard-level geniuses to psychologically alienate alternatives in the rather narrow mind of the American collective.

        Rand Paul’s rather odd shenanigans are proof of this. His team is working as adept as possible to counter mainstream programming which often alienates libertarian philosophers by the odd thousands who rant and rave about his ‘disconnect’ with them.

        Problem is, many of us Libertarians are self-absorbed fucking cocksuckers who can’t think outside our fucking self-imposed box of rational utilitarian pragmatism and find the spirit inside to be fucking flexible within a rather adamant political system that just hates alternatives.

        1. I’m convinced that having someone with real name recognition outside of politics and money behind him would be a game changer. Someone whom the media would LOVE to cover rather than ignore (like Gary Johnson, eminently qualified but not media-compelling). Penn Jillette, for example. Drew Carey, for another. Mike Rowe. Our answers to morons like Al Franken.

  10. The parasite withdraws to give the host a chance to recover…after which, the slow sucking resumes.

    1. Since when does a heavily-armed parasite backed with decades of loving political arm-barring sweetly give its host an honest chance to recover for yet more blood-gouging?

      It doesn’t. The gargantuan writhing hellish parasite in question is arguing with its appetite which is the ONLY reason for the brief respite.

      1. Most of the statists I know (and I live in Maryland, so I know quite a few) do not think of their relationship to their fellow human beings as parasitic, despite their overt support of parasitizing policies. They believe in a fantasy, wrapped in a myth, smothered in moralistic sweet goo…all of which insulates them from their parasitism.

        You may choose to view the parasite as conspirator, but you won’t be able to understand him any better.

        1. I heard they replaced the Arbutus sign on Sulphur Spring Road that said”is gay”

      2. A successful virus merely inconveniences it’s host.

        http://en.wikipedia.org/wiki/Rhinovirus

        The biggest viral failures provoke a response from the host, or kill enough of the host to burn itself out.

        1. Biological parasites are honed by natural selection, so we expect that those that are common are the successful kind.

          But we only have one parasitic government, which has not had any external constraints for a long, long time. We should not expect that it will react intelligently in the event of such constraints reappearing.

  11. Roll with it man, roll with it.

    http://www.Way-Anon.tk

  12. “You can’t have it both ways.”

    Is this like when conservatives bitch and moan about how the ACA, tax increases on billionaires, minimum wage increases, etc. are going to tank the economy. And then when those predictions turn out to be bunk they celebrate “gridlock?”

    1. In case you haven’t noticed, the economy is tanked right now.

      1. ‘But it could be worse…’ I guess he must be right then…

    2. american socialist|1.2.15 @ 7:43PM|#

      Hi, dipshit!
      More strawmen, misdirection and other lefty bullshit to toss around? Imagine my surprise, you slimy piece of shit.
      Go lick mass murderer ass.

    3. If the economy is going so well, why don’t you live up to your moral responsibility and pay off the mortgage you walked out on.

    4. AMSOC. The Employer mandate has been delayed. This is the first year that the individual mandate is going to be enforced. Billionaires, Unions, and Crony Corporations either buy tax exemptions from our government, or can pay an army of lawyers, and accountants to minimize their taxes.

      Pick up a history book sometime.

      1. And when it does go into effect, the MSM will blame the new GOP Congress for the tanking economy.

    5. amsoc:

      Is this like when conservatives bitch and moan about how the ACA, tax increases on billionaires, minimum wage increases, etc. are going to tank the economy. And then when those predictions turn out to be bunk they celebrate “gridlock?”

      Really? Why, I had no idea that we were implementing the exact policies that socialist call for, which regards to universal healthcare, taxing the rich, living wages, etc., and then watching an awesome, roaring economy.

      Funny, I seem to remember most socialists bitching about the rampant “austerity” of the US, and how living wages and a return to the tax rates of the 1950’s would fix all of our economic problems. Strange to hear them now say that everything is awesome, without any of that. I guess a 39% tax rate on the rich and $7.25/hour is what socialists want for a roaring economy, after all.

    6. Oh, the ACA fiasco is just beginning. Remember we pushed off major parts of the law to get us past midterm elections.

      We have yet to feel the full affects and see all the ramifications. When you the lower middle class decides working less to get more credit is a good idea things should get intetesting.

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  14. Reminds me of 1936 when people were predicting the end of the Depression because the numbers improved a bit.

    The fundamentals haven’t changed. Fewer Americans are working and more are on the dole. Lower oil prices will just make us more dependent on foreign energy sources. Obama’s sanctions on Russia have served only to accelerate the end of the dollar as the reserve currency and cement the Russia-PRC alliance (and possibly a Russia-Germany rapproachment, which would be a foreign policy disaster without equal in American history). Without the dollar as reserve currency everything falls apart.

    This man has taken the enormous leverage that the US had over world affairs and in the span of six years, pissed it all away on looting the treasury at home and playing vain power games overseas. Six years ago it would seem unthinkable, but he’s made GWB look competent.

  15. This is when the left abandons their “income inequality” complaint so they can give credit to Obama for a rebounding economy that almost certainly involves the “1%” more than the middle class.

    Companies have ways to deal with tax increases and continues to reward shareholders and investors. They do a lot of business overseas. There’s a reason why “inversions” were big new items earlier this year. Walgreens just merged with a Euro pharmacy company. Yeah, it’s “noninversion”, but they’re expected to reduce their US presence.

    Plus, a good chunk of the new jobs are temp or freelance. You can’t raise a family on those, but companies don’t have to commit to you or pay you any benefits. But yay, they reduce unemployment figures, good on Obama.

    Oil prices are plummeting because Saudis and the oil producers are refusing to decrease supply. They have ulterior motives, which probably involves stopping fracking, and Obama is no fan of that. You can’t drill our way out of this, he said.

    What did Obama do exactly? The sort of folks he detests did most of the heavy lifting. He did delay more hurtful parts of ACA and GOP pressure on sequestration slowed down future spending.

    Wow, the capitalist slaves who have more disposable income thanks to low gas prices and companies offering more flexible work arrangement spent a lot of money on Christmas and Black Friday. The 1 percent is rolling in dough. IT should be terrible news for American Socialist. But anything to praise Barack?

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  22. You have a pretty screwed up system if the government has to constantly be creating more and more laws and regulations or everything would fall apart.

  23. A month ago, Tyler Durden wrote that the 3rd qtr growth was an accounting gimmick. 1st qtr Obamacare spending was moved to the 3rd qtr for political purposes

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