Obama Gets It Half Right
by Charles Goyette: Too
Late! The Government Already Did Do Something
about the economy from Barack Obama is like hoping to learn about
Paul Revere from Sarah Palin.
the President seems to have gotten something right.
stumbled into the truth at an appearance with German Chancellor
Angela Merkel when he said that he is not worried about a second
evidence is both mounting and credible that the economy is sinking
deeper, it is foolish to think the downturn will mean a second recession.
Thatís because the first recession, the one that officially started
in December 2007, never really ended.
by the National Bureau of Economic Research are regarded as definitive
statements about when economic downturns begin and end. By their
calculation, the worst downturn since the Great Depression ended
in June 2009 after eighteen months, and the recovery got underway.
that it took them more than a year after the fact to reach that
Look, if the
economy hasnít recovered, then a recovery couldnít have begun. Itís
like saying an airplane took off, even though it never left the
going on that created the illusion of a recovery, but now, two years
after it was supposed to have started, there is no recovery in sight.
The price of
oil had been on a tear back when the recession began; itís even
higher today. The price of gold has almost doubled.
and a half years, GDP is virtually unchanged, while retail sales
are actually lower.
are on food stamps and the unemployment rate is almost twice what
it was when the recession began.
In fact the
signs of the economy slowing even more now are visible in the latest
jobs numbers. For May the feeble addition of only 54,000 jobs means
the unemployment rate ticks up.
Last time the
bureau declared a recession over, in November 2001, unemployment
didnít pick up for two years.
So where did
the bureau get the idea this time that the economy was recovering
in June 2009? It must have been influenced by Obamaís $830 billion
"stimulus" package. While Bushís billions for bankers
were still fresh in the their hands, the new president came into
office and began throwing more cash around. There was cash for clunkers,
cash for automakers and unions, cash for home buyers, cash for transportation
boondoggles, cash for politically-connected green projects, cash
for government buildings, cash for the arts.
You get the
idea. Everybody was high on Obama billions. It was like Saturday
night at the Roxy. But given enough cocaine you can probably even
get a corpse to show a pulse.
It must have
been a fun party. The Keynesian economists and other statists thought
that it would go on and on and the bill would somehow take care
from all this is to beware of all such boards, bureaucrats, and
bodies, especially those with designs on managing the economy. The
economy lives in the experience of people and not in seasonally
adjusted statistics and weighted aggregates. If you and sixteen
million people like you donít have a job, youíre still in a recession.
So when the
president says heís not worried about a second recession, and that
you shouldnít panic, heís half right.
The first recession
© 2011 Charles Goyette
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