Obama's economic record - positive or negative?

[Jas09]

@adaher

This is a habit that needs to really be broken, this idea that liberals decide what the facts are, and any disagreement constitutes partisan hackery or outright dishonesty.

Nothing was resolved, there is no way to empirically prove that the economy was better off with stimulus, or that stimulus has ever been helpful to reviving an economy. It’s all theory, and 80 years after Keynes, it remains theory.

Is there, to your mind, any way that this theory could be proven? If not (and one would assume that you feel the same about other economic theories like the Austrian school ones), then how should we make economic political decisions?

[adaher]

We make economic political decisions based on what we do know, which is not everything that we need to know.

The only way economic theory can be proven is for it to be tried in many different places and have similar results. The actual record of stimulus around the world and throughout history is all over the map. But if you just assume it always works and an economy would have been even worse off without it, then you have a hypothesis that can never be disproved.

[Hentor_the_Barbarian]

@adaher

This is a habit that needs to really be broken, this idea that liberals decide what the facts are, and any disagreement constitutes partisan hackery or outright dishonesty.

Nothing was resolved, there is no way to empirically prove that the economy was better off with stimulus, or that stimulus has ever been helpful to reviving an economy. It’s all theory, and 80 years after Keynes, it remains theory.

That was the result of multiple models conducted by different individuals. That is empirical, actually, rather than anecdotal or going with your gut.

Another way to test a model is to make predictions based on the model, and evaluate the accuracy of those predictions in regards to the real-world outcomes. On that score, Keynesian models have been quite well validated, and others have failed miserably. e.g. Not the Treasury view...: Which (macro)-economists are worth listening to?

Of course, when the models don’t say what you want, you can just reject them in favor of your gut, and then not bother to make predictions or check outcomes.

Finally, I’m not deciding what the facts are. I’m looking at the facts and coming to conclusions about them. I’d recommend that you give it a try.

[PrettyVacant]

@adaher

Looking at the example of Europe, is there any connection whatsoever between differing levels of economic growth and differing fiscal stimulus policies? if fiscal stimulus works, then countries that did stimulus should grow substantially faster than countries that did not.

Not really. It depends to what the stimulus is in response.

Keynes never stated the correct response to a Lehman Brothers debacle.

[Hentor_the_Barbarian]

@adaher

We make economic political decisions based on what we do know, which is not everything that we need to know.

The only way economic theory can be proven is for it to be tried in many different places and have similar results. The actual record of stimulus around the world and throughout history is all over the map. But if you just assume it always works and an economy would have been even worse off without it, then you have a hypothesis that can never be disproved.

Or you could just make statements up with no reference to any sort of evidence or fact or anything, like “[t]he actual record of stimulus around the world and throughout history is all over the map.” [citation needed]

Then you can sell a point without having to work at it, and hope that nobody comes by to call you out on it.

[Hentor_the_Barbarian]

@adaher

That’s based on a model, not empirical evidence. THe predictions about where the economy would be without a stimulus were also based on a model. Who is to say which model is the right one?

Looking at the example of Europe, is there any connection whatsoever between differing levels of economic growth and differing fiscal stimulus policies? if fiscal stimulus works, then countries that did stimulus should grow substantially faster than countries that did not.

You can easily look at growth by austerity measures: Austerity And Growth, Again (Wonkish) - The New York Times

Austerity measures have led to poor growth or to further retraction.

[Airbeck]

@adaher

We make economic political decisions based on what we do know, which is not everything that we need to know.

The only way economic theory can be proven is for it to be tried in many different places and have similar results. The actual record of stimulus around the world and throughout history is all over the map. But if you just assume it always works and an economy would have been even worse off without it, then you have a hypothesis that can never be disproved.

OK, whats the actual record of trickle down, tax cuts for the rich type actions on economic recovery? Better or worse than Keynesyan stimulus? Got any statistics on that? I’m sure you’ve compared and contrasted the options right?

How did Bush’s tax cuts for the wealthy affect the employment rate? Can you point to anything positive from them other than the affect on the wallets of the wealthy?

Would it be a good idea to bury our heads in the sand and do nothing during a recession, just because neither theory can ever be proven to the satisfaction of the opposition? Would the ostrich technique be the best then? Or would actually trying to help the situation by doing something be better?

[adaher]

I’ve never endorsed supply side economics, which isn’t even based on any real economic theory.

Now, models are not empiricism. The stimulus did not affect economic growth or the unemployment rate as predicted, therefore the model was wrong. THe CBO measured it a different way, going by what the difference in economic growth and employment would be, which makes their model untestable.

And Paul Krugman’s arguments are faulty. He’s cherry picking data and calling examples of non-austerity austerity. Austerity involves cuts in spending, not slower increases than Paul Krugman would like to see. Nor does austerity involve tax increases, that’s not austerity, that’s tax and spend, and it’s a policy supported by Krugman and the President.

As of right now, the only real example of austerity is Estonia, and despite Krugman’s protestations and further cherry picking of data, they are doing better than most other European states in terms of growth:

Estonia’s growth so far in 2012: 7.6%.

http://www.cato.org/publications/commentary/austerity-works

The Cato article also cites other countries doing austerity and doing well as a result.

[Hentor_the_Barbarian]

@adaher

I’ve never endorsed supply side economics, which isn’t even based on any real economic theory.

Now, models are not empiricism. The stimulus did not affect economic growth or the unemployment rate as predicted, therefore the model was wrong. THe CBO measured it a different way, going by what the difference in economic growth and employment would be, which makes their model untestable.

And Paul Krugman’s arguments are faulty. He’s cherry picking data and calling examples of non-austerity austerity. Austerity involves cuts in spending, not slower increases than Paul Krugman would like to see. Nor does austerity involve tax increases, that’s not austerity, that’s tax and spend, and it’s a policy supported by Krugman and the President.

As of right now, the only real example of austerity is Estonia, and despite Krugman’s protestations and further cherry picking of data, they are doing better than most other European states in terms of growth:

Estonia’s growth so far in 2012: 7.6%.

http://www.cato.org/publications/commentary/austerity-works

The Cato article also cites other countries doing austerity and doing well as a result.

Wait, is Estonia the only country “doing austerity” or are other countries doing it as well? You seem confused.

Also, what would be helpful would be, rather than bald assertions, some evidence based consideration of the facts.

As for cherry-picking, the “you forgot Estonia” is the worst kind of cherry picking, especially when it is and isn’t the only country employing austerity.

For data based evaluations:

Quick take:

http://krugman.blogs.nytimes.com/2012/06/06/estonian-rhapsdoy/

More involved discussion if you are interested in what is actually happening in Estonia in detail:

http://fistfulofeuros.net/afoe/estonias-long-awaited-recovery-may-still-be-delayed-yet-awhile/

If, however, like me you suspect that neo-classical steady state growth is some sort of metaphysical hocus pocus (or what they call a “necessary assumption to get the argument going”) with little empirical support, then you will not be terribly convinced by all those numbers blindly and slavishly churned out by the current generation of models, and will look more to the facts on the ground. In particular, when we come to the neo classical growth theories which normally underpin the sort of optimistic analyses we see of the Estonia situation (yes John, there are academic economists on both sides), I tend to think these are flawed due to some initial erroneous assumtions Solow himself made about the impact of population dynamics on growth (see this extended argument here), and I think it is important to remember here that Estonia, along with Hungary, Latvia and Bulgaria, is one of the countries on Europe’s Eastern flank where population as well as ageing is actually falling. So I suggest you treat any analysis which talks about a steady recovery in internal demand but does not explicitly explain how this point has been taken into account……. well I suggest you treat it with more than a pinch of salt.

[adaher]

Krugman’s data is faulty. He includes countries that primarily did “austerity” by tax increase, or who didn’t cut spending at all.

[Hentor_the_Barbarian]

@adaher

Krugman’s data is faulty. He includes countries that primarily did “austerity” by tax increase, or who didn’t cut spending at all.

For example? Further, what was the Impact of removing such “faulty” data points from the trend line?

[adaher]

I’d have to manually remove every country, like Britain and France, that did not actually impose austerity.

The effect of removing such nations from the trendline is that you wouldn’t have much data, since very few nations actually cut spending in the 2009-2011 period. And Greece doesn’t count because their level of distress was so acute there was no plausible fiscal policy that would help them.

[Buck_Godot]

@adaher

I would give the President a neutral on the economy, while an overwhelmingly negative on the deficit.

When I think of what John mcCain would have done differently, the only big change would be no stimulus, so you figure we get the same result we have now, just with a somewhat lower deficit.

Would McCain have bailed out the auto industry? If not, GM and Crystler probably wouldn’t be around any more along with a lot of their suppliers and that has got to hurt the economy.

[adaher]

Maybe. I don’t think demand for cars would change, so logically GM and Chrysler’s loss would be Ford’s gain. Although I suspect McCain would have probably bailed them out.

[Hentor_the_Barbarian]

@adaher

I’d have to manually remove every country, like Britain and France, that did not actually impose austerity.

The effect of removing such nations from the trendline is that you wouldn’t have much data, since very few nations actually cut spending in the 2009-2011 period. And Greece doesn’t count because their level of distress was so acute there was no plausible fiscal policy that would help them.

Britain is not engaged in austerity? I think either you don’t know what the word means or are intentionally using a tortured definition that you refuse to share.

[adaher]

Show Me the ‘Savage’ Spending Cuts in Europe, Please | National Review

The UK has not cut spending. Nor has France or Italy.

[BrainGlutton]

@denquixote

Considering the obstacles confronting him in the form of the Republican party it is nothing short of miraculous. When Mitch McConnell, the Minority Leader of the Senate, says his number one goal in Congress for the next four years, as of 2008, is to insure that Barak Obama would be a one term president, you must marvel at what has been accomplished. McConnell’s goal was not to fight for improved ealth care, not to fight unemployment, not to end successfully the wars we were and are fighting, not to reduce taxes, not to balance the budget, not to improve the quality of education in the country, not to improve the economy etc. etc. etc. Rather his goal was to make the President of the U.S. as near a failure as he was able. Given the cooperation of the Republicans, that is, no cooperation, Obama is an extraordinary president.

This X10.

[Really_Not_All_That_Bright]

@adaher

Maybe. I don’t think demand for cars would change, so logically GM and Chrysler’s loss would be Ford’s gain.

Well, yes, assuming we imposed a protective tarriff on automobile imports. In all probability, GM and Chrysler’s loss would have been Toyota and Honda’s gain.

[adaher]

Maybe. Someone would have bought those plants, and Ford would have been primed to buy the best product lines and infrastructure. And competition to Ford would emerge, if new airlines can come up new car companies can as well. If there’s demand for a product, a company will emerge to provide that product.

[BrainGlutton]

@MemoryLeak

Had the President and his team (I include the party as part of the team) spent as much time and effort on the fiscal mess in which we’re currently mired in . . .

It is not a fiscal mess. The federal budget deficit is not the problem.