One of the themes amongst critics of ARRA was expressed by Mish today. He said:
The dotted lines (in a jobs chart) tell the real story about how pathetic a jobs recovery this has been. Bear in mind it has taken $trillions in stimulus to produce this.
Paul Krugman has a different starting viewpoint from Mish and believes that the "stimulus" was simply not large enough.
What about a different point of view from both the above? What if the poor jobs recovery was and continues to be due in good measure to the "stimulus" and all the misguided government intervention? Remember the sharp rebounds from the 1973-5 and 1981-2 recessions? Other than the Fed easing up on anti-inflationary efforts, I don't recall it taking extraordinary measures. Neither do I recall the Federal government making massive interventions.
While it is not possible to run a controlled experiment with reality, I continue to believe that the practical and morally best solution for the economy is a large dose of freedom. If governmental statistics are to be trusted, the American economy produces at least $43,000 per person per year in economic output. Thus a family of four proportionately (allegedly) on average has over $170,000. This number is so much more than people need to live that there is no justification for government and the Fed taking extraordinary lengths to goose it up a bit even if they had the capacity to do so.
Since they manifestly lack that ability, it's past time for government to do little more intervention than helping the truly needy. The free market really does work. However, when the authorities interfere with necessary price signals and reward failure, they worsen matters.
There is a correlation between the amazing weakness of the current economic "recovery" and the Bushbama Continuity of bailouts of the companies that took the lead in causing this mess. It may be that Christina Romer's unemployment predictions would have been correct if President Obama had shown up President Bush as a futile, pro-big business interventionist, and the economy had recovered just as JFK's economy recovered from the 1960 recession with a tax-cutting program (and low deficits). But instead we got what we got.
It's time for real change. But as the old Mets used to say, you gotta believe. In this case, the faith should be in the proven ability of free markets to meet the needs of the people better than central planners can do.
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