Time Magazine: Listen Up, Dummies! Obama's Stimulus 'Clearly Helped'

By Larry Elder (Archive) · Thursday, September 9, 2010

Americans, says Time magazine, are too dumb to appreciate the wonders of President Barack Obama's $787 billion "stimulus" package.

Gobsmacked by polls that show Americans don't believe government is smart enough to take money from taxpayers and give it to those it considers deserving, Time says: Voters tell "pollsters that even programs that have clearly helped (emphasis added) the economy, like the $787 billion stimulus, did no such thing."

"Clearly helped the economy"?

High-school science teachers say extraordinary claims require extraordinary proof. Where's the proof?

With the economy, we cannot conduct a "controlled experiment." For this, we would need two Americas -- one where Obama signed the stimulus and one where he didn't. If the stimulus economy produced more jobs than the non-stimulus one, then the stimulus "clearly worked."

Obama, through ObamaCare, increased taxes. With new regulations, he has increased the costs of doing business. And he has gone on an unprecedented spending binge, which has dramatically increased the annual deficit and the national debt.

Nearly two years under Obamanomics and its centerpiece $787 billion stimulus, unemployment has climbed and remains stuck at almost 10 percent, with more long-term unemployed jobseekers than at any time since the Great Depression.

Would we have been "clearly" worse off without the stimulus? Apart from our own common sense, we are left with historical examples and expert opinion.

Let's look at historical examples.

President Reagan, in the early '80s, inherited an economy with 13.5 percent inflation, 21 percent prime interest rates, and an unemployment rate that reached 10.8 percent. He addressed this by doing the opposite of what Obama has done. Reagan sharply lowered taxes, dropping the top marginal rate from 70 percent to 28 percent. He slowed the rate of domestic spending. And he continued the deregulation policies of President Carter. Interest rates fell; inflation declined; and unemployment, after nearly two years, started dropping.

President Franklin D. Roosevelt, during the Great Depression, continued the tax-hiking policies of his predecessor. Federal spending soared. The result? Unemployment during the Depression reached 25 percent and remained stuck in the teens until World War II. The subsequent destruction of foreign economies, which America helped rebuild, sparked a domestic boom. The dismantling of ill-advised worldwide trade barriers also helped.

FDR's secretary of Treasury, Henry Morgenthau, who served from 1934 to 1945, wrote in 1939: "We have tried spending money. We are spending more than we have ever spent before and it does not work. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises. ... I say after eight years of this administration we have just as much unemployment as when we started ... and an enormous debt to boot!"

What about the "stimulus worked" experts?

In a study widely cited by the stimulus-supporting media, economists Alan Blinder and Mark Zandi wrote: "We estimate that, without the government's response, GDP in 2010 would be about 11.5 percent lower, payroll employment would be less by some 8 1/2 million jobs, and the nation would now be experiencing deflation."

Case closed? Hardly.

Blinder is a liberal Princeton economist who advised President Bill Clinton and presidential candidates Al Gore and John Kerry. House Democrats happily call Zandi -- with whom they agree and who advised presidential candidate John McCain -- a "conservative Republican economist." Democrats say that if a "conservative Republican economist" says the stimulus worked, why, it must be true! Except Zandi himself says, "I'm a Democrat." Oops.

Zandi explains: "I didn't view (McCain) as a Republican or Democrat." Exactly. Neither did many Republicans. He continues, "I thought he was a very earnest fellow who was willing to take positions that were right but weren't necessarily popular." That's right. "Maverick" John initially opposed the Bush tax cuts because they "benefited the rich." Why, among many other reasons, do you think most Republicans wanted someone else?

Here's the deal. Most economists in academia, where the media go for quotes, are lefties.

In 2001, American Enterprise looked at the political party registrations of faculty in a cross section of big and small colleges, both public and private, in all regions of the country. In every college and university surveyed, liberals in the economics departments vastly outnumbered conservatives. At Harvard, 15 econ faculty members belonged to the Democratic or other left-wing party, and only one was a Republican or libertarian. At Stanford, 21 were "left" and seven "right." At Syracuse University, 15 were left, one right.

NPR interviewed both Zandi and Stanford economist John Taylor about Zandi's study. Taylor said, "I just don't think there's any evidence. When you look at the numbers, when you see what happened, when people reacted to the stimulus, it did very little good."

Is it unfair to be skeptical of the opinions of left-wing economists -- just because they're left-wing? Not if you agree that a) conservatives believe what they see and b) liberals see what they believe.

Clear enough for you?

COPYRIGHT 2010 LAURENCE A. ELDER
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