Monday, June 11, 2012

Just The Facts, Please

The far right all too frequently bloviates as if what they're saying is true and based on facts, but all too frequently it's not the case.

Examples: they favor lower tax rates to boost the economy, and yet we have Clinton's eight years versus GW's eight years. Another is they endorse the Austrian school of economics over Keynesian when in a recession or depression, and yet we have the Great Depression versus the New Deal.

They often point to Ayn Rand's Atlas Shrugged as if it's non-fiction. Folks, it's a novel, and a poorly written one at that. It's not factual or based on real-life events.

Granted, I didn't offer a huge sample size above, but unfortunately when it comes to sheer numbers of events to support a given contention, history does not provide numerous recessions or depressions, for example (thankfully!). However, Clinton's eight years do in many ways effectively counter GW's eight years when it comes to tax rates, economic growth and creating jobs. The New Deal versus the Great Depression does in many ways highlight what works and what doesn't work when it comes to rejuvenating a left-for-dead economy (spending or fiscal stimulus works, austerity does not).

Sure, they try every so often to come up with what they believe to be a gotcha moment, where they think they finally have something that's based on fact. The latest being Reagan's recovery versus Obama, and Latvia as some kind of austerity success story. It didn't take long for both to be exposed as loaded examples at best.

Paul Krugman, Michael Tomasky and conservative David Frum, among others, have been explaining that the Reagan recession and recovery was quite different than Obama's much-worse predicament, and yet you'll hear the far right attempt to make the apples/apples comparison. Krugman's column on the subject is particularly illuminating, and his blog post offers a graphic that all but puts to rest any justification for equating the two periods.

As you can see, during Reagan's recession, total spending occurred at a 14% clip, or more than double that of Obama's relatively anemic 6% rate (yes, The Gipper was a big-time Keynesian!). And yet Obama inherited not a Fed-induced recession as did Reagan, but rather a consumer-driven depression with much worse structural difficulties to overcome -- a more severe level of unemployment being one of them. As these authors point out, Reagan at least had an opposing party willing to help and compromise for the good of the country. In contrast, Obama has had nothing of the sort as Republicans have firmly refused to give in on any meaningful measures to boost the economy. In addition, they've invoked the filibuster more than at any time in history, stone-walling most of what this administration would've liked to accomplish.

I would also add that another big difference of now versus then that is getting no mention is the gap between the rich and poor. In the early 1980s, the inequality gap was nowhere near as large as it is now which made for a much healthier, dynamic and resilient economy, one more readily able to bounce back from a downturn. Thirty years later, this gap has exploded into a massive chasm. As a result, more Americans have less in real dollars and therefore demand has remained stunted. Government spending typically serves as a temporary fix as it fills in for the lack of demand, helping to spur and lift the economy out of its doldrums. But as already mentioned, spending under Obama is less than half that which occurred under Reagan, despite the fact Reagan's recession was far less deep. So today (vs. early 1980s) you have a greater percentage of people with less inflation-adjusted money and you have less governmental economic aid in the form of real per capita spending. I won't even ask why we haven't felt the effects of trickle-down job creation from the super-wealthy, a group that is the richest to ever inhabit the planet.

As for Latvia, again it's already appearing to be a bit dubious as the poster child of what austerity can achieve during tough economic times. I will just say that Latvia is hardly representative of a G20-type economy, meaning one more akin to the U.S. Austerity has been ongoing in Ireland for years and we've yet to see it work its magic there, and mind you Ireland's economy is more of a relevant comparison to the U.S. than that of Latvia.

I actually applaud the right wingers in trying to come up with anything fact-based to support their beliefs. It will be refreshing to (finally) see some actual evidence that plausibly makes one nod and say, "You know what, they might actually have something here...." But I'm not holding my breath.

1 comment:

K said...

This was eloquent.