Morning Must-Read: Kevin Drum on Paul Krugman on the Obama Recovery
The Obama Recovery Has Been Miles Better Than the Bush Recovery:
“Bush benefited not just from a historic housing bubble…
…but from big increases in government spending and government employment. But even at that his recovery was anemic. Obama had no such help. He had to fight not just a historic housing bust, but big drops in both government spending and government employment. Despite that, his recovery outperformed Bush’s by a wide margin…. And as Krugman points out, it’s unclear just how much economic policy from either administration really affected their respective recoveries anyway:
I would argue that in some ways the depth of the preceding slump set the stage for a faster recovery. But the point is that the usual suspects have been using the alleged uniquely poor performance under Obama to claim uniquely bad policies, or bad attitude, or something. And if that’s the game they want to play, they have just scored an impressive own goal.
Roger that. If you want to credit Bush for his tax cuts and malign Obama for his stimulus program and his regulatory posture, then you have to accept the results as well. And by virtually any measure, including the fact that the current recovery hasn’t ended in an epic global crash, Obama has done considerably better than Bush.
The only graph that is not stunningly embarrassing for the argument is the one that ascribes all employment losses after his inauguration to Obama-policies and all job losses before the trough of the 2001 recession to Clinton-policies:
The question is: is this the same thing that is going on in Chicago economics, or not? As you know, Bob, when Chicago Lucas models began failing their empirical statistical tests massively, the response was to abandon statistical testing because it was “rejecting too many good models”. When Chicago finance model began failing their empirical statistical tests massively, the response was to redefine what investor psychology was: Investors no longer had a stable utility function relating their consumption spending to their well-being exhibiting declining marginal utility. Instead, investors had whatever and however rapidly changing a function relating their well-being to their consumption spending that was needed in order to keep the efficient markets hypothesis from being falsified.
The question is: Are these different things, or are these the same things? And how are they related to the earlier tobacco money-infused campaign of tobacco denialism? And how are they related to the present oil money-infused campaign of global warming denialism? And how are they related to the Cato Institute’s failure to register that its anti-fiscal stimulus campaign of 2009–along with its anti-ObamaCare campaign, and its anti-debt crisis campaign–now looks like something really not to be proud of?
Answers, anyone?