Supposedly Respectable Conservatives Going Over the Cliff

Pres Obama took office in 2009

Wow.  Someone sent me this piece from Peter Ferrara at Forbes magazine:

The record of President Obama’s first three years in office is in, and nothing that happens now can go back and change that. What that record shows is that President Obama, with his throwback, old-fashioned, 1970s Keynesian economics, has put America through the worst recovery from a recession since the Great Depression.

I told my correspondent who sent me this that I was planning to parse the piece on this blog, but reading it just exhausts me- it's so densely packed with poor reasoning, misleading arguments, and the like that I can barely face it.  But I'll give it a try, and see if I can slog through the whole thing.

Ferrara starts by noting that

What that history reveals is that before this last recession, since the Great Depression recessions in America have lasted an average of 10 months, with the longest previously lasting 16 months.

He then notes that Obama entered office when "the recession was in its 13th month", i.e. it was already over the average and only three months from the record before he was even in office.  In the end the recession lasted 18 months- i.e. it was over five months after Obama took office.  What could a president possibly do in his first five months in office that would improve that?  Ferrara goes on to take some gratuitous shots at Keynesian theory, which doesn't really merit a response from me- there aren't any facts to respond to.  But he also goes over lots of legitimate stats about how weak the recovery has been, and how unemployment continues to be at a very high level.

Ferrara notes that economists say that recessions resulting from financial crises are worse than other recessions, but then completely ignores that point when talking about how great Ronald Reagan's recovery was compared to Obama's.  But of course the recession of the late '70s was wholly a creation of the Federal Reserve Bank, intentionally inflicted to beat back inflation, and followed during the Reagan years by lowering interest rates.

What's needed when one criticizes the results of government policy, moreover, is to create a narrative explaining what should have been done.  Without explaining the mistakes, you don't have a credible argument and you're just left repeating the same thing- "look at the results!  Lalalalalalalala!"  I didn't see much of that until later in the piece.  But think about the issue with respect to the 1980s vs. the 2008 recession- tax rates are lower now than they were then.  Hell, Reagan increased taxes later in the decade!  Where's the explanation of what Reagan did right that BHO did wrong?  Instead we get this:

Indeed, exactly none of President Obama’s policies have been well designed to restore economic recovery and traditional American prosperity. They have consistently been the opposite of everything that Reagan did to end the American decline of the 1970s, and restore booming growth for 25 years.

Wow!  The opposite of Reagan!  That's serious!  I wonder what he means by that?  Sorry, the reader can keep wondering, because there's not a single example given.  The writer goes on to talk about the looming tax increases in 2013 and how they're going to really screw us up.  But of course that just points out again that taxes have been cut during the Obama years so far- the Magic Reagan Formula- and these are the results.

So next comes the Jeremiad against the tax rates scheduled to increase in 2013, tax rates that are essentially the same as existed during the Clinton years, which coincided with greater prosperity than was ever seen in the 2000s during the last conservative Golden Age.

Finally there's a screed about how "the Obama administration is in the process of imposing a blizzard of new regulatory costs and barriers that will be building to a crescendo by 2013 as well".  The examples given are Dodd-Frank (not yet implemented significantly) and the Health Care bill (also not yet implemented).  No examples of any expansion of regulation so far- so how is it that we've had this terrible recovery?  Taxes are lower, regulation hasn't changed.  The one thing that conservatives usually criticize, the exploding deficit, isn't mentioned here- I guess even a cynical hack like Ferrara can't bring himself to blame the lack of growth on a defict, which clearly has nothing to do with it.

And of course we know that the President is going to get the credit or blame for whatever happens in the economy, but supposed intellectuals writing for highbrow magazines ought to at least acknowledge that in fact presidents don't have absolute power and can't dictate policy- that's why it takes more than a view from 50,000 feet to explain why a recovery isn't taking hold.  Why not?  Would it be different if Congress had passed the jobs bill Obama proposed last year?  Did the Republicans propose something in particular that would have helped?  I guess Ferrara would say that we should have cut taxes more, but that argument is patently ridiculous given that the US currently has the lowest tax rates it's had since WW II, which didn't stop the recession from rocking us badly.

Anyway, what a piece of drivel.

UPDATE: This piece by Jon Chait makes some of these same points.