Barack Obama is claiming credit for “saving” the economy from a full-blown depression based on passage of the stimulus plan.
As with most Obama claims of success, Obama simply is exhibiting his prowess at using strawman arguments.
Obama compares where the economy is now, versus where the economy would have been on some hypothetical downward spiral assuming government did nothing. The “some say doing nothing would be better” paradigm is classic Obama.
But the alternative to the Obama stimulus plan and ramped-up budget deficits was not nothing, but a lowering of the tax and regulatory burdens on businesses and individuals which would have created real, economically sustainable jobs.
Instead, at most, we had subsidies to state governments to perpetuate completely unsustainable budgets drowning in union-related labor costs and pensions, and infrastructure projects notorious for cost overruns. No jobs were created or saved; unless of course the federal government is going to continue to subsidize these jobs indefinitely.
Obama confuses association and causation. Just because two events occurred (the economy did not go into a full-blown depression and Obama passed the stimulus) does not mean that the stimulus saved the economy. It is the intellectually lazy person’s idea of logic, since it is much, much more difficult to compare what was to what could have been.
Now to the point of this post. Using Obama’s logic, I saved the economy.
On February 20, 2009, I wrote The Last Bull Capitulates. In that post I wrote about the damaging effects of Obama deliberately talking down the markets to create a crisis atmosphere necessary to pass the stimulus (as in Rahm Emanuel’s “never let a crisis go to waste”):
For the first time in my adult life [yes, h/t MO], I am convinced that we have a President who sees capitalism and markets as the enemy. There is no other explanation for the hyperbolic rhetoric Obama has used to create a sense of economic crisis far in excess of reality. We are in a recession, but as others have documented extensively, to compare the current economy to the Great Depression is damaging.
The result of my analysis was that the time had come to take some money off the investment table until Obama stopped talking down the markets (which he did in fact do in April 2009 when he needed to pass his expansive budget).
But I recognized that I probably was a counter-indicator, the so-called “last bull” capitulating, and that my capitulation probably signalled we had hit bottom:
There’s an old saying on Wall Street that a bear market has not bottomed out until the last bull capitulates. News flash. The last bull has capitulated. Me….
I hope I’m selling at the bottom, because that will mean the markets and the country will have recovered from the worst economic policies since the Great Depression.
And so it came to pass.
I capitulated, and the economy did not sink into depression. Therefore, I saved the economy.
So please give credit where credit is due.
Unless, of course, we continue to stay at or near 10% unemployment, in which case it’s all Bush’s fault and there was nothing I could do about it.DONATE
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