Yes, Obama's stimulus package saved the economy

KingOrfeo

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According to a new study:

Saturday, Oct 31, 2015 09:30 AM EST

Paul Krugman has taught them nothing: Republicans would tank the economy again, given another chance

The stimulus prevented a second Great Depression, a new report shows. What would've helped more? An even bigger one

Paul Rosenberg


The idea that George W. Bush “kept us safe” has rightly been exposed to ridicule recently by Donald Trump. But Bush also failed miserably on another front: keeping us safe economically, as he presided over the biggest economic catastrophe since the Great Depression — and his presidency was already an economic disaster before that, per Nobel Laureate Joseph Stiglitz.

On this second front, the GOP blame-shifting centers on Obama, in order to virtually erase the epic market failure from history. Just as Bush is supposed to get a pass for 9/11, while getting credit for “keeping us safe” afterwards, he’s also given a pass for the housing bubble and the financial crisis which gave us the Great Recession, so that all blame can be focused on Obama, who supposedly made things worse with his “job-killing” policies.

In the real world, empirically-based economists know this is ridiculous. In the third quarter of 2010, for example, the Congressional Budget Office estimated that the stimulus bill “increased the number of people employed by between 1.4 million and 3.6 million.” This was typical of CBO reporting of the impact the stimulus had, but the totality of policy responses was much broader than that, and a new report from the Center on Budget and Policy Priorities by economists Alan Binder of Princeton and Mark Zandi of Moody Analytics updates their earlier work in 2010 to first provide a comprehensive overview and then draw lessons for the future.

On the first point, Zandi told a conference call briefing, “In its totality it was a resounding success,” adding, “That sounds a little odd,” because of how bad the recession was. “It was indeed a great recession, a very painful time, we’re still not completely free of it,” he said. But it could have been so much worse. “If not for the policy response, the recession would have been, as Alan is fond of saying, the Great Depression 2.0.”

More specifically, the paper estimates that, without that response:

The peak-to-trough decline in real gross domestic product (GDP), which was barely over 4 percent, would have been close to a stunning 14 percent
The economy would have contracted for more than three years, more than twice as long as it did
More than 17 million jobs would have been lost, about twice the actual number
Unemployment would have peaked at just under 16 percent, rather than the actual 10 percent
The budget deficit would have grown to more than 20 percent of GDP, about double its actual peak of 10 percent, topping off at $2.8 trillion in fiscal 2011
Today’s economy might be far weaker than it is — with real GDP in the second quarter of 2015 about $800 billion lower than its actual level, 3.6 million fewer jobs and unemployment at a still-dizzying 7.6 percent.

That alone should be enough to silence right-wing critics of government activism in general, but of course it won’t be. “I know there are still denialists who think the economy would have been just great in 2009-2010 if the government just left it alone, but I doubt they will read the Blinder-Zandi paper,” economist Dean Baker told Salon. Baker, the co-director of the Center for Economic Policy Research, is one of a handful of economists who warned of the financial crisis before it occurred (none of whom, significantly, relied on standard macro-economic models). “For everyone else,” Baker said, “you’re left asking, ‘What is this really telling us?’”

“Denialist” is an apt description. A 2010 paper by Adam Kessler in the Real-World Economics Review, “Cognitive dissonance, the Global Financial Crisis and the discipline of economics” examined the views of economists opposed to Obama’s stimulus at the time, believers in lassez faire (BLF) who signed a letter from the Cato Institute to that effect, as opposed to economists in general. Kessler theorized that BLF responses to the crisis and ensuing recession could be explained in terms of cognitive dissonance, saying that, “Cognitive dissonance theory predicts that when real-world events ‘disconfirm’ deeply-held beliefs this creates psychological discomfort in persons and they will respond by means of distortion and denial.”

BLFs naturally tend to believe that free markets work perfectly well and thus when they don’t government must be held to blame, in denial of what has just occurred. Kessler queried this group of BLFs and a sample of economists from the American Economics Association, asking about their views were on 10 possible causes of the Great Recession. One possibility was the 1977 Community Reinvestment Act (CRA), which requires banks to reinvest in communities they serve which have traditionally been redlined (called “assessment areas” under the law). As the paper’s abstract explains:

The notion that the CRA is a major cause of the crisis apparently has great resonance among the BLF but is demonstrably false. Among other results, 46 percent of the signers of the letter believe that the CRA was one of three top causes of the crisis compared to 12 percent of the “other” economists. I conclude that the BLF exhibit symptoms to cognitive dissonance.

There are a variety of lines of evidence against the CRA hypothesis, (some in the paper, more here and here) most strikingly the fact that “Only 6 percent of high-priced loans to low-income borrowers or in low-income neighborhoods by lending institutions that fall under the CRA legislation were made in their CRA assessments areas.” Far more money was put at risk elsewhere, most of it by institutions not covered by the CRA. “The CRA did it” is an economic denialist narrative, every bit as much as “sunspots did it” is a global warming denialist narrative. Both are easily refuted by data — data which denialists simply choose to ignore.
 
One can always maintain that if an economic policy one likes had not been put into effect, the results would have been bad. The problem with such a contention is that we cannot go back in time, not put that policy into effect, and measure the different results.

Median income adjusted for inflation has declined since the inauguration of Barack Obama.

http://www.newyorker.com/news/john-cassidy/chart-explains-american-politics

That makes the Democrats vulnerable on economic issues, and inclines the voters to give credibility to Republican ideas.
 
www.salon.com

KO posting another Obama cheer leading article from Salon? I'm SHOCKED! :rolleyes:


Yea it saved us from a depression but it also put the 1% back at the helm after they crashed the bitch.

Now we are looking to put Bush/Clinton in office? LOL the beatings will continue until morale has improved.
 
KO posting another Obama cheer leading article from Salon? I'm SHOCKED! :rolleyes:


Yea it saved us from a depression but it also put the 1% back at the helm after they crashed the bitch.

Now we are looking to put Bush/Clinton in office? LOL the beatings will continue until morale has improved.

not sure if he drinks the juice or smokes it

anyway, what a fucking retard. another obama slave that has never had a real job
 
Let's see here...



I teach in a college Business department, and so keep an eye on these sorts of things. According to the administration's own numbers:

Lowest labor participation rate since the Carter administration (which was when women started to enter the labor force in significant numbers).

More woman and blacks in extreme poverty since before WWII.

Inner city unemployment the highest it's been in decades.

More people on food stamps than ever before.

Manufacturing still in the tank.

Housing, after a minor blip, heading back into the tank.

GDP sluggish and declining.

Middle class buying power continuing down.

Food prices rising sharply.

States like Illinois and California teetering on bankruptcy.

All of this done while doubling the national debt; that is to say, accumulating more debt in just two terms than all the presidents before him combined.​

If you consider this a "saved" economy, I'd hate to think what you consider a ruined one!



 


I teach in a college Business department, and so keep an eye on these sorts of things. According to the administration's own numbers:

Lowest labor participation rate since the Carter administration (which was when women started to enter the labor force in significant numbers).

More woman and blacks in extreme poverty since before WWII.

Inner city unemployment the highest it's been in decades.

More people on food stamps than ever before.

Manufacturing still in the tank.

Housing, after a minor blip, heading back into the tank.

GDP sluggish and declining.

Middle class buying power continuing down.

Food prices rising sharply.

States like Illinois and California teetering on bankruptcy.

All of this done while doubling the national debt; that is to say, accumulating more debt in just two terms than all the presidents before him combined.​

If you consider this a "saved" economy, I'd hate to think what you consider a ruined one!



Please let us know which of the current crop of candidates is promising to do anything at all about any of those issues.
 
America's Economic Decline



I teach in a college Business department, and so keep an eye on these sorts of things. According to the administration's own numbers:

Lowest labor participation rate since the Carter administration (which was when women started to enter the labor force in significant numbers).

More woman and blacks in extreme poverty since before WWII.

Inner city unemployment the highest it's been in decades.

More people on food stamps than ever before.

Manufacturing still in the tank.

Housing, after a minor blip, heading back into the tank.

GDP sluggish and declining.

Middle class buying power continuing down.

Food prices rising sharply.

States like Illinois and California teetering on bankruptcy.

All of this done while doubling the national debt; that is to say, accumulating more debt in just two terms than all the presidents before him combined.​

If you consider this a "saved" economy, I'd hate to think what you consider a ruined one!




You have not documented any of these assertion. We need to trust you when you say that you are a college professor who specializes in these matters.

OK, let's assume that you are a College Professor in business administration, and that these assertion are true.

Most of these indicators got worse under George W. Bush.

-------

The Wall Street Journal Jan 9, 2009

President George W. Bush entered office in 2001 just as a recession was starting, and is preparing to leave in the middle of a long one. That’s almost 22 months of recession during his 96 months in office.

His job-creation record won’t look much better. The Bush administration created about three million jobs (net) over its eight years, a fraction of the 23 million jobs created under President Bill Clinton‘s administration.
http://blogs.wsj.com/economics/2009/01/09/bush-on-jobs-the-worst-track-record-on-record/

The Wall Street Journal Sept. 17, 2010

The inflation-adjusted income of the median household—smack in the middle of the populace—fell 4.8% between 2000 and 2009, even worse than the 1970s, when median income rose 1.9% despite high unemployment and inflation.
http://online.wsj.com/article/SB100...4.html?mod=WSJ_hpp_MIDDLENexttoWhatsNewsThird

The Atlantic SEP 11, 2009

On every major measurement, the Census Bureau report shows that the country lost ground during Bush's two terms. While Bush was in office, the median household income declined, poverty increased, childhood poverty increased even more, and the number of Americans without health insurance spiked. By contrast, the country's condition improved on each of those measures during Bill Clinton's two terms, often substantially.
http://www.theatlantic.com/politics/archive/2009/09/closing-the-book-on-the-bush-legacy/26402/

-------

Do you believe that either party under the leadership of any of the presidential primary candidates can reverse what seems to be a long term and deep seated economic decline? If you do, what are your reasons?
 
One can always maintain that if an economic policy one likes had not been put into effect, the results would have been bad. The problem with such a contention is that we cannot go back in time, not put that policy into effect, and measure the different results.

Median income adjusted for inflation has declined since the inauguration of Barack Obama.

http://www.newyorker.com/news/john-cassidy/chart-explains-american-politics

That makes the Democrats vulnerable on economic issues, and inclines the voters to give credibility to Republican ideas.

Median income adjusted for inflation has declined over the last twenty years through a succession of Republican and Democratic administrations:

http://www.pewresearch.org/fact-tank/2014/10/09/for-most-workers-real-wages-have-barely-budged-for-decades/

Aside from that bit, agreed. We can't go back and see what the effects would have been had Bush not handed $700 billion of taxpayer money to private companies so they could pay out their bonuses as well as having the Fed start QE before he left office.

Therefore, since things seemed to be working (or the bribes were big enough), the taxpayer has been burdened with carrying the ever increasing load of fiscal stimulation without a commensurate increase in pay.
 
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Median income adjusted for inflation has declined over the last twenty years through a succession of Republican and Democratic administrations:

http://www.pewresearch.org/fact-tank/2014/10/09/for-most-workers-real-wages-have-barely-budged-for-decades/

Aside from that bit, agreed. We can't go back and see what the effects would have been had Bush not handed $700 billion of taxpayer money to private companies so they could pay out their bonuses as well as having the Fed start QE before he left office.

Therefore, since things seemed to be working (or the bribes were big enough), the taxpayer has been burdened with carrying the ever increasing load of fiscal stimulation without a commensurate increase in pay.

Thank you for posting that website. it tells me what I have long believed. Most paychecks never really recovered from the recession of 1974. Pay checks declined under Reagan, and rose somewhat under Clinton. Nevertheless, the rich keep getting richer.

This would be a good political environment for class war and the politics of envy. Unfortunately, the Democrats cannot exploit those issues because lower income whites do not trust the Democrats on racial issues. Also, the Democrat Party is in favor of more immigration. Immigrants compete for jobs, and lower wages.
 
If real income for most Americans continues to decline, the electorate is likely to respond in one of two ways.

First, voters may choose economic distribution. This choice will benefit the Democrats. Bernie Sanders represents this option.

Second, the white majority may decide to economically disenfranchise non whites. This decision will benefit the Republicans. Donald Trump represents this decision.
 
If real income for most Americans continues to decline, the electorate is likely to respond in one of two ways.

First, voters may choose economic distribution. This choice will benefit the Democrats. Bernie Sanders represents this option.

Second, the white majority may decide to economically disenfranchise non whites. This decision will benefit the Republicans. Donald Trump represents this decision.

LOL what?

Care to back that up with something or are you just talking out your ass?
 
If real income for most Americans continues to decline, the electorate is likely to respond in one of two ways.

First, voters may choose economic distribution. This choice will benefit the Democrats. Bernie Sanders represents this option.

Second, the white majority may decide to economically disenfranchise non whites. This decision will benefit the Republicans. Donald Trump represents this decision.



blame your obama, the obama wants slaves not to free people

Bernie sanders is one fucked up asshole. he's the last thing America needs. it would be like putting Enron CEO as POTUS
 
I am not predicting the future. I am speculating. What do you think will happen if economic trends continue?

Either we quit putting establishment pol's (either party it doesn't matter) in office or the beatings will continue until morale improves.


If whites economically disenfranchise non whites (yea right, is this before or after WWIII??) it wouldn't just benefit republicans, the democrats love that plan....hard to keep control of slaves when they aren't dependent on the welfare program you're selling as 'help'.
 
Either we quit putting establishment pol's (either party it doesn't matter) in office or the beatings will continue until morale improves.


If whites economically disenfranchise non whites (yea right, is this before or after WWIII??) it wouldn't just benefit republicans, the democrats love that plan....hard to keep control of slaves when they aren't dependent on the welfare program you're selling as 'help'.

The welfare system preserves those who would otherwise die from hunger and disease.
 
The welfare system preserves those who would otherwise die from hunger and disease.

To what end?

Toooooooooo keep them from grabbing pitch forks and torches?

Like I said, it's hard to keep the slaves in check when they get hungry.
 
To what end?

Toooooooooo keep them from grabbing pitch forks and torches?

Like I said, it's hard to keep the slaves in check when they get hungry.

There is a widespread Republican fantasy that if the welfare checks stopped coming welfare recipients would get jobs and join the middle class.

Sorry. The middle class is no longer taking applications. Few people enter the middle class any more. Large numbers are falling into the proletariat. This happened under George W. Bush. It is happening under Barack Obama.
 
There is a widespread Republican fantasy that if the welfare checks stopped coming welfare recipients would get jobs and join the middle class.

Sorry. The middle class is no longer taking applications. Few people enter the middle class any more. Large numbers are falling into the proletariat. This happened under George W. Bush. It is happening under Barack Obama.

So you're telling me BOTH Reps and Dems suck? I KNEW it! EVERYBODY sucks! **does touchdown dance** **sucks at it**
 
So you're telling me BOTH Reps and Dems suck? I KNEW it! EVERYBODY sucks! **does touchdown dance** **sucks at it**

Still and all, they don't suck equally. W's policies led us into a recession that could easily have become a depression; Obama's stimulus package -- which I very much doubt a McCain Administration would have put through -- staved off the depression and shortened the recession.
 
Obama cant hide how the economy affects individuals, and people vote how theyre affected by laws and policies. Life is sweet for 1/4th and sour for the rest.

40% of Americans earn less than 20K, 50% earn less than 30K. And these numbers don't include the unemployed.
 
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