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Saturday, October 2, 2010

George Will's Silly Expectations

I had to laugh at a George Will article today. He says the Dems have failed because unemployment isn't below 8%. If you had asked economists at the beginning of Obama's term if, given the Wall Street crash, we would have 9% unemployment at this point they would have been quite impressed. We were looking at a likelihood of depression-level (25%) unemployment, so where we are is pretty damn good. Show me a plausible scenario that would have brought unemployment down significantly lower. Notice that the right-wingers say we should have let Wall Street and the auto industry go down. Where would unemployment be had we taken that path? It is simply pie-in-the-sky to believe that we could have 5-7% unemployment right now after the shit-sandwich of an economy was handed to the Dems from Repubs. Check your economic history. (I would recommend Rogoff and Reinart, but any history of economics for the last 100 years will do) No economy, ever, has rebounded that fast from the kind of calamity we encountered. What kind of genius do we think is available out there? Do we think there are people who could have done better? Really? Seriously? And what are there actual proposals? Keeping the Bush tax cuts? That is the solution? Implausible bleating about cutting spending? And we are going to accept this from people who managed to overspend so badly in good economic times that they turned a surplus into a deficit? What have tea partiers said that would make us think they have a solution? They all want to extend the Bush tax cuts forever. Show me a way out of massive and dangerous deficits if we take that path. So right there you have a big reason to think hard before drinking the tea. Gov't too large? Specify what you will cut. The tea party has been awol on that task. Unless you tell me what you will cut I can't take your pledges to small gov't seriously. Now on the Dem side, has the deficit gotten bigger? Yes, but it is a short term increase in a recession, which is exactly how it is supposed to be. Gov't is supposed to run a deficit in a recession. If they aren't, they aren't doing the job of replacing the demand lost by unemployment and mitigating the pain to the people unemployed because of it. The problem was that the Dems inherited a standing (and structural!) deficit left by Bush's tax cuts. If we consider where we were when the Dems took over, where we are isn't too shabby at all.

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