Monday, June 15, 2009
Snark versus snark, Krugman Monday edition.
A Republican politician, House Minority Leader John Boehner, takes a partisan political shot at the Obama stimulus, saying that a good four months after it was enacted jobs are still being lost. It's a literally true yet dubious critique, as careful partisan political shots are wont to be.
The literally true part is that, yes, jobs are still being lost. The dubious part is that even true believers in the stimulus don't expect it to do much before much of the the stimulus money is spent, and that whatever the employment numbers may be they might well be worse without the stimulus -- nobody knows for sure, and nobody will know until the econometric studies of it come in five years from now, and people will argue about it then.
Krugman could've replied honestly along these lines. But being who he his, he shoots back a return snark that lowers the bar to below a deceivin' politician's level by having zero relevant truth at all. To wit...
Stimulus history lesson
Huh? What is the relevance of this? That the Reagan tax cuts supposedly caused the '82 Recession? Didn't stop that unemployment? What's this supposed to have to do with the Obama spending increase stimulus?
Especially since the '82 recession was entirely caused -- as Krugman well knows -- by the Fed pushing up interest rates to all-time, still-record highs to break the double-digit inflation inherited from Jimmy Carter .
Well, here are two more charts. We might call them, "Stimulus history lesson II".
In the first we see the Fed pushing interest rates up to the record highs (19%!) and, one year later, exactly with the time lag the textbooks predict, the fall in the economy and increase in unemployment caused by the huge interest rate hike, which dominated the effect of the tax cuts, as the Fed intended them to do.
In the second we see that in the same year-long period before the current recession, interest rates were flat (just over 5%), never rose, and that in fact six moths before the recession started they began falling to an all-time low (effectively 0%) -- and that even reinforced by this historic lowering of rates (plus massive "quantitative easing" to boot) the Obama stimulus has left the economy still falling and unemployment rising.
I mean, I don't want to imply any false conclusions on the basis of any of this.
I'm just sayin'.
Though one conclusion we might reach from all this is that Krugman is even more deceptive than your typical known lyin' politician.