Obama's Failures

The author of a book about it doesn't agree with you:



The historical record is clear,” write the Romney campaign’s economists. “Our economy usually recovers quickly from recessions, and the more severe the recession, the faster the subsequent catch-up growth.” The paper they’re relying on here is “Deep Recessions, Fast Recoveries, and Financial Crises: Evidence from the American Record,” by Michael Bordo of Rutgers University and Joseph Haubrich of the Federal Reserve Bank of Cleveland. So I asked Bordo whether he agreed that this recovery had been inexplicably sluggish, and whether a different set of policies could have dramatically shortened it.
“This recession is really quite different,” Bordo said. But he didn’t see government policy as the obvious cause. “We found that a lot of the difference between what would’ve been predicted by the normal behavior of recessions and what we observed now is explained by the collapse of residential investment. Put another way, if residential investment were what it was in a normal recovery, we would have recovered already.”
That is to say, what Bordo found was fairly consistent with the rest of the literature on this topic: Recessions associated with a housing bust tend to have very slow recoveries. That’s rather different than the Romney campaign’s interpretation of Bordo’s paper, which is that the features of this particular recession couldn’t explain the slow recovery, and thus you had to conclude that “America took a wrong turn in economic policy in the past three years.”

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What "real" criteria?

Wait, so your argument is that Obama's reaction is better than 19th century Presidents? So what? It falls short by the much more applicable, pertinent comparison, which is the track record of Presidents in the 20th and 21st centuries. Compared to those, it's a failure.

And the argument, again, was about the comparison to Reagan. And the facts are clear: Obama's recovery isn't in the same stratosphere as Reagan's.

And if Bush were on the ballot, this might mean something.

I'll respond anyway, though: he promised 2.60 million jobs in 2004, and we got 2.05 million. Oh, the horror. Unemployment was 5.6%, by the way, so the objective situation was way better. Obama's, let me see...carry the one...yeah, 9 million jobs off of his projection. So...not really relevant or comparable, I'm afraid.

Actually, he doesn't agree with you. He says this is an ordinarily slow recession, so if you want to cite him, you're basically abandoning all the half-hearted, half-baked arguments you've tried to toss out to defend the weakness of the recovery. You have to shift stances to "the recovery isn't that bad" to "Obama can't do anything about how bad the recovery is." Is that your new position?

That's Bordo suggesting a possible exception, not Bordo contradicting the idea that deeper recessions generally correlate with swifter recoveries. They do, and they do even after financial crisis. In fact, Bordo wrote an op-ed for the WSJ saying as much.

But onto the substance of the claim: is the sluggish recession due to the housing crash? Well, as it so happens, those same two fellows from the last video talk about housing uncertainty as it relates to the recession:



Of course, even if you wanted to both change your position and deny the arguments Taylor makes, that'd still leave you to explain why the Obama administration thought it could fix this crisis at a reasonable speed, given that you're now arguing that they had no chance. So which is it, and what does it say about them if they were promising far more than they could actually deliver?

When I said recession, I wasn't talking about garden variety recessions. And that guy didn't say this was an ordinary slow recession. It isn't. It has the same ingredients that led to the Great Depression and other severe economic crisis of the 19th century. Call them recessions, depressions, crisis, panics, whatever, they last for many years and don't turn around quickly. None of the big meltdowns of two centuries ago had fast recoveries. I am not arguing Obama had no chance. He probably took measures that prevented a greater economic meltdown. Was he too optimistic about how fast the recovery would be? Probably, but presidents usually do that. Bush did it. If by some miracle Romney becomes president I guarantee his promises for a speedy miracle recovery won't happen either. And we all know Newt Gingrich was blowing smoke when he claimed electing him would quickly bring gas prices down to two dollars. And Hoover promised a chicken in every pot.

David Axelrod just confirmed that " Obama's enthusiasm stems from his loins" .
No wonder the democrats are running such a mushy campaign.

Your argument's really jumped the shark if you're citing meltdowns from two centuries ago when pressed for comparisons. Even so, the Roberts/Taylor videos still note two examples from the late 19th century/early 20th, and they follow the same basic shape. And Bordo (who, again, contradicts your earlier arguments about how the recession isn't all that bad) says there's no evidence that financial crisis make them deeper or longer.

Your universe of excuses keeps getting whittled down, and each time you just discard the last one and bring out another as if nothing happened. First, you try to make the case that the recovery isn't so bad, and I show you that it is, because it'll take us a decade to get back to where we are. Then you say it's comparable to Reagan's; I show you that it isn't in terms of GDP or employment, even if you cherry-pick the start date. Then you pull a complete 180 and say it is bad, but that's because it's a special kind of recession that's bound to be really slow, which is completely at odds with your previous excuses. This is just argumentative flailing.

Well no, not probably. Demonstrably. And yeah, you are in fact arguing that the nature of the recession means the recovery is bound to be slow. If you're not, then it isn't defending his policies. Either it was bound to be slow regardless of what he did, or it didn't have to be, and therefore he failed to speed it up. It's one or the other.

This is a false equivalence. All politicians promise too much; that's expected. Obama's projection is 9 million jobs off. That's not being too optimistic. That's being fundamentally wrong about the efficacy of your policies. That's not missing the bullseye. It's shooting yourself in the foot.

Yes, unemployment was only 5.6. And when he entered office it was 4.2. Six months into his term it reached 6.5. So it dropped down a percentage point in four years. What a remarkable achievement. His solution was tax cuts and it didn't create the job growth it promised. The Republican solution is the same. Where is the evidence that is going to create tremendous job growth using the Bush example? Under Obama twice the number of jobs has been added.

Financial crisis don't invalidate the correlation between depth of recessions and speed of recoveries. The Taylor/Roberts videos demonstrate this clearly, and Bordo says the same, even though he shifts to a different excuse about housing, instead.

Your "real" criteria is subjective and ad-hoc, and conspicuously non-specific, too. And even using it to cherry-pick the start date with Ford's recession, Obama's recovery still isn't comparable to Reagan's.

Economic policy centuries ago had a lot less empirical data to drive its decisions. Obama doesn't deserve credit for avoiding the utter ineptitude Presidents of the distant past may have shown in the face of economic turmoil. Saying "hey, he didn't screw it up as badly as Presidents 200 years ago" isn't a serious defense. And the point can't even be argued unless you say something specific, anyway.

If you want to retreat to conveniently subjective ground where you make the case that this was a Super Special Recession where the normal expectations of recovery do not apply, you can do that. But that's not an empirical claim that you can support with evidence or data. And it does nothing to defend the Reagan comparison or Obama's ridiculous promises about fixing it.


Yeah, as I said before, Reagan's unemployment rate wasn't held down by roughly 3% by lower participation rates. And he saw a huge surge in GDP growth at the end of his first term, too. It isn't close.


will's talking economic data! Cue the .

Where to begin? First, unemployment peaked at 6.3% early in his term, not 6.5%. And it wasn't six months into his term, it was 30 months. It happened just as the '03 tax cuts went into effect, actually. And after they did, unemployment dropped all the way to 4.4%, and it was below 5% for two straight years. Which means, immediately following the tax cuts, it dropped almost 2% and actually held around there. The cuts boosted growth and brought unemployment way down, exactly as they were supposed to. They succeeded. If you want to pretend this a coincidence, be my guest.

More importantly, Bush's promises have literally nothing to do with defending Obama's. It's just another transparent attempt to change the subject. Even so, your whole argument on this front is trying to turn "promise" into a binary judgment, so that you can pretend being off 600,000 jobs and being off 9 million jobs is the same thing. Even though, in the former case, it was a slightly too rosy estimate of a policy that worked and was working, and in the latter, it's an insanely off-base estimate of a policy that didn't even come close to achieving its aims. That's not being overly optimistic in both cases; that's being a little optimistic in one case and completely wrong in the other.

Yeah, talking about Bush you are forgetting what happened at the end of his term, this mess started under him, not Obama, and it wasn't his tax cuts that resulted in unemployment dropping so low but the insane specularion and shenanigans in the housing market. It was the wrong kind of growth. Dropping down to 2% isn't a good thing when it is fueld by unsafe business practices, which regualtors under Bush did nothing about.

Actually, there was pressure on 19th century presidents to do something about the economic meltdowns of that era, but the presidents during them were laizses faire types who believd in letting the market take care of it which sometimes meant it could take up to seven years.

It dropped by 2%, not to 2%. And where's your evidence that this is what caused it? The housing sector can't account for all this itself.

And I would absolutely love to hear you explain how the tax cuts caused the financial crisis. You've made this allusion before (and so has the President, gallingly, never explaining the mythical connection), and I've asked you to explain it before. So by all means, please explain how this is supposed to have worked.

Again, you avoid specifics like the plague, probably because every time you try to make a specific claim the data smack it down. Make an argument, and we can examine its truth and find out if "the market" was actually unimpeded, or responsible for the delay in recovery.

Specifics-free as these arguments are becoming, right off the top of my head I can tell you that myths like this surround the event you keep comparing the current recession to, the Great Depression. People suggest that Hoover's allegedly "lassez faire" policies caused or worsened it, but again, the facts contradict the conventional wisdom they mindlessly repeat. Hoover did a complete 180 on economic policy in response to the crisis, raising taxes, increasing spending (FDR even denounced him for overspending!), increasing tariffs to try to keep jobs in America, and handing out Federal loans. Kinda sounds like what's being done and proposed right now, doesn't it?

This mess started decades ago, sir, probably when banks decided to ignore Glass Steagal in the 1960s.

All the 19th century presidents did nothing. Hoover was a little more proactive. I didn't mention Hoover. But did he actually raise taxes or was it tariffs, which may not have been a good if, but is a little different than a straight tax as the real goal is not adding revenue. Hoover had to increase spending even though Roosevelt criticized him for it. Roosevelt did it a lot more. As for Bush and the tax cut, it can't work both ways. Would have all that massive specialization and crazy quilt bundling of toxic loans have occurred without tax cuts? Then the economic boon had nothing to do with Bush's tax cuts. Or did tax cuts in an economy that was shipping more manufacturing jobs overseas than creating them encourage channeling the extra money into innovative, exotic risky practices?

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His political opponants blamed Buren heavily for the crises. His refusal to involve the government in the economy was said by some to have contributed to the damages and duration of the Panic. Jacksonian Democrats blamed the banks' irresponsibility, both in funding rampant speculation and by introducing paper money inflation. This was caused by banks issuing excessive paper money (unbacked by bullion reserves), leading to inflation.


Van Buren advocated did indeed act: He advocated lower tariffs and free trade, and by doing so maintained support of the South for the Democratic party. He succeeded in setting up a system of bonds for the national debt.

Okay, so that is what Van Buren did. I am sure you would approve. And it was a depression, not recession, that lasted a mere six years.

Aye, you didn't mention Hoover, but he's the one who oversaw the Great Depression, which you say is the best comparison for the current recession. And he's a great, controlled experiment in all the arguments we're still having today about how to respond to them.

Hoover did both, by the way: raised taxes and increased tariffs, because he wanted to penalize people who did business overseas. Sound familiar? And he issued Federal loans to try to prop up struggling private businesses. That should sound familiar, too. He did pretty much the exact same things the Obama administration's been doing, and says we should keep doing.

The first argument only holds if you first establish that the economic boom is wholly explained by an increase in specialized securities. You're skipping over all the parts where you have to make a specific, data-driven case for anything.

And what on earth does outsourcing have to do with any of this? The unemployment rate surveys American workers.

"This was caused by banks issuing excessive paper money." A panic caused by expansionary monetary policy is a government failure, not a market failure. And while I certainly support lower tariffs (well, none, but lower rather than higher), that doesn't make them the solution to inflation. I support tax cuts, too, but that doesn't mean I think they would fix a problem with, say, draconian regulations.

And holy crap, did you just cite Yahoo! Answers as a source?

Sure, saves reading a bunch of stuff, and is accurate.

Well, it was a market failure because it was individual banks issuing the money, it wasn't official government money. It wasn't government official policy for that to happen. They allowed it to happen. Not really a good lidea to let private banks issue their own money. But that could be keeping with the idea of an unregualted economy. There wasn't much the feds could do to cut taxes. No income taxes in those days. Tariff was their main source of income.

the idea of an unregulated economy - hmmmm

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“The gladdest moment in human life, methinks, is a departure into unknown lands.” – Sir Richard Burton

Nobody's advocating that private entities should be allowed to issue their own currency, for crying out loud. As is generally the case with "market failure" arguments, this ends up being an argument against the straw man of total anarchy, or in favor of the most bare-bones regulations upon which even the Ron Pauls of the world usually agree. It's got nothing to do with the actual regulations being argued today, nor anything that is commonly thought of as free market ideology, nor how to respond to recessions. Which was the actual topic.

So, I'll assume we're done pretending the Panic of 1837 has something to tell us about the current recession. Which means we're back where we started when I first posted my critique:

1) The "recovery" is abysmally, unacceptably slow, and in some places isn't even advancing at all.

2) Reagan's recovery was insanely better by common measurements, and significantly better even by cherry-picked ones.

Neither point is really arguable if you bother to look at the data. But this isn't something a lot of Obama supporters seem interested in doing, which is why we have to go through and systemically disprove these facile talking points first.

I personally think that 4 years is enough time to at least change the tide. I mean for the better. This election to me is almost like taking the hammer out of the box to kill a fly - or is it taking out the fly to kill the hammer?

Either way - something needs to happen, the devil I do know is pissing me off.