Comments on: Where Obama’s economic policy went wrong

By: sufrinsucatash

sufrinsucatash — Sat, 11 Feb 2012 19:29:42 +0000

At the beginning of the Obama presidency, Summers offered a 50+ page memo on his economic forecast and 3 different policy proposals. All offered predictions that were wrong by half in terms of economic performance and unemployment. He offered 3 stimulus proposals and Roamer argued that the most generous should be increased to approximately 12% of GDP. Summers disagreed and Orszag never believed that stimulus was needed. The Summers’ memo is cited in Ryan Lizza’s, “The Obama Memos,” New Yorker and is readily available online for those interested in reading the pathos of a megalomaniac.

The economic conditions required more than Obama assembling a posse of Pseudo-Randian free-marketeers. The presumption of Friedman economics, which is a propaganda tool for conservative political ideology, has made mush of economic brainpower over the last 30 years. Too little stimulus is assuredly a loser and to overdue a stimulus plan surely will not result in anything close to the economic malaise caused by an under aggressive economic policy. It’s brainless or should be. It’s painful to read about this stuff anymore.

By: TFF

TFF — Sat, 11 Feb 2012 13:21:26 +0000

Two thoughts on this…

(1) Maybe Obama should have hired political experts instead of economics experts? In retrospect, it is clear that the economic choices were being driven by (ineptly managed) politics.

(2) In the polarized political environment, we are seeing insufficient DISCUSSION. Plenty of disagreement, but with people sticking to diametrically opposed positions. Take the top 20 commenters on this blog and stick them in a room and they would ultimately hash out something superior to what Obama’s team settled on. (Selling it to Congress is another matter.) Hard to do that without heated discussion, though.

By: colburn

colburn — Fri, 10 Feb 2012 20:43:18 +0000

NCimon: I agree, expertise is a joke. Virtually nobody in power gives a flying fart about the lower 50% (at least) of the US population, and all their “expertise” is heavily tilted to the interests of the rich and powerful. It’s funny that it took this to sour you on expertise. But maybe you’re young. For me, it was the Iraq war. For older people it was probably other stuff…

By: Butch_from_PA

Butch_from_PA — Fri, 10 Feb 2012 19:52:57 +0000

Business as usual in Wasington DC. Different suit, different color, same kickbacks to lobbyists and continued drain of factories and capabilities here for short term financial gain. We are now at the point where the US political systems is being managed from outside of the USA.

By: NCimon

NCimon — Fri, 10 Feb 2012 18:35:28 +0000

It never ceases to amaze me that what was obvious to any semi-astute observer (I’m pointing at myself here) back in early 2008, was lost on the people who are supposed to understand this stuff. The economy had been systemically larded with fake value. That balloon was the basis for the orgy of consumer spending that kept the economy afloat – 70% is the number typically thrown around. Deflate that balloon and you take away the rose-coloured glasses many of those spenders were wearing. Now add to that the lost consumption from the jobs that flew away after the collapse of that bubble and you’re limping along – barely.

That double-whammy meant we wouldn’t be getting anywhere near the growth rate from the early part of this decade. There was no way the country was going to get back on track without a strong push. Why wasn’t that clear to the smartest guys in the room?

This thing has left me very sour on the so-called expertise that shuttles between New York and Washington, and the seemingly mindless chatter that passes for economic thinking from so many in Congress. There’s a lot of very disconnected people on those trains and planes.

By: RogerNegotiator

RogerNegotiator — Fri, 10 Feb 2012 18:00:33 +0000

Shovel-readiness played a role. After the first several hundred million(!) in priorities were addressed, there were probably few ways for the government to spend money quickly and wisely. Keynes would probably say it doesnn’t matter whether the money is spent wisely, but most Americans don’t feel that way. Think about how big spending projects work — first you have the planners, then the engineers, then the environmental consultants and the lawyers and the community outreach, etc. (Think California high speed rail.) It’s years before you get to dig the first hole. And the professional classes who get all the early work weren’t the ones who needed jobs the most. A bigger stimulus would have required more than money, it would have required a major overhaul of how the government spends money.

By: Woltmann

Woltmann — Fri, 10 Feb 2012 17:49:36 +0000

O’bama’s “Economic Policy” has been long-term unemployment checks and food stamps. What paycheck? ..

By: realist50

realist50 — Fri, 10 Feb 2012 16:37:11 +0000

Don’t know how a piece entitled “Where Obama’s economic policy went wrong” can simply ignore the health care act. Whatever one thinks of the long-term goal, it legislated, in the midst of a period of high unemployment, that the cost of labor would increase in a couple years. Even worse, since the details were left to later regulations that are being promulgated in dribs and drabs, the amount of this increase was uncertain. Definitely not an encouragement to invest in long-term fixed assets.

By: dWj

dWj — Fri, 10 Feb 2012 16:25:38 +0000

“Faced with evidence that people were more likely to save than spend the tax rebate checks they received during the Bush administration, the Obama administration decided to take a different tack:”

A credit crisis seems especially like the moment when one might be well served not trying to avoid people’s improving their balance sheets.

By: MJGSimple

MJGSimple — Fri, 10 Feb 2012 16:04:07 +0000

Thanks FifthDecade. This piece is so pointless, it’s incredible.

By: FifthDecade

FifthDecade — Fri, 10 Feb 2012 15:41:30 +0000

Is it any wonder when economics is the study of what happened and why that hindsight is a better view than prediction?