I’d like to commend a post at the Center on Budget and Policy Priorities to your attention. The post contains thirteen charts which summarize the state of the economy from the “Great Recession” to the present plus analysis and commentary. I’ve, er, sampled one of their charts above, the one that illustrates the unemployment rate with and without the ARRA. Their conclusion is that but for the various financial stabilization moves of the Bush and Obama Administrations and the American Recovery and Reinvestment Act of 2009 the recession would have been much worse.
My interpretation is that the economy is just barely holding on by the skin of its teeth and that the actual performance of the economy has been so close to the CBO’s “low estimates” of performance without the ARRA that it’s hard to believe that the “fiscal stimulus” had any effect at all. Indeed, by everyone’s reckoning any effect it had is now long gone.
It’s too bad that neither political party has anything but pipedreams for an economic policy but that’s the way it is.
Way, way, way back I saw a comment at OTB by some fellow named Dave Schuler, who observed of someone else’s observation that an economist named Kevin Murphy had produced an impressive case for government spending’s effect being zero to possibly negative “maybe because it’s so quantitative.” Recently I’ve seen other claims that perhaps the effect is negative. And here we are today. And of course on the monetary side central bankers, with the approval of governments, have really screwed things up with essentially zero to show for it except bigger banks and greater income inequality. Nice.
I know it will be rejected out of hand, but I’ll repeat, the politicians really have precious little to offer. They might do well to “not do something, just sit there.”
I think they have plenty to offer for which there are no substitutes in the private sector, viz. a sound currency, the rule of law, and a reasonably stable regulatory regime enforced with an even hand. Sadly, those have become old-fashioned and passé.
I think we would all agree with setting an environment, preferably a facilitative one, but at a minimum a stable one to which people could adapt. To your point, I think it is being shot to hell right now.
If I were made King I’d simply arbitrarily mandate a 25% reduction in the number of regulations on the books. I’d leave it up to lower level managers to figure it out with the instruction that they do it elegantly by such and such a date or the cutting and slashing begins. I’d similarly dictate 20% reductions in tax burdens and let the managers figure out how to manage their costs to the realities of their revenues. And so forth.
Of course none of this could be done in the real world which is why a) you have to fight tooth and nail to avoid new initiatives; they never go away and b) I’m so pessimistic about real change occurring. The best one could hope for is a moratorium. That would be getting the hell out of the way. No one should hold their breath. We will have proposals right and left from academics and lawyers who propose to “fix” things. They won’t, and Rube Goldberg would be proud of their handiwork.