The economy is improving whether conservatives like it or not(Read article summary)
Conservatives who would like to bash Obama on the economy are having an awfully hard time right now, as the recovery proceeds apace.
As others have noted, conservatives whoâ€™d like to bash the President on the economy are having an awfully hard time right now, as the recovery proceeds apace.Â Too slowly apace, for sure, but no objective observer can miss that the trend is our friend and that even the job market, while still far too weak and with conspicuous downsides (intractable long-term unemployment), is improving.
So, theyâ€™re stuck with â€śyeah, things are getting better, but if we were in charge, theyâ€™d be even better!â€ť
This, of course, is the flipside of a rap with which Iâ€™m intimately familiar: â€śsure, things are badâ€”but without our actions, theyâ€™d be even worse!â€ť
Neither are convincing to most people, because most people donâ€™t engage in the economistâ€™s counterfactual: the path the economy would have taken absent your interventions.Â Itâ€™s the â€ścompared-to-whatâ€ť in the above statements.
Thing is, I know and believe, within confidence intervals, my counterfactual.Â It comes from tried and true modeling based on the historical relationships of how advanced economies respond to stimulus.
Or, if you donâ€™t like that sort of thing, you can derive a counterfactual from simply projecting the course the economy was on before you did your policy thing, and compare that to the actual path of growth and jobs (you can see that approach hereâ€”see discussion around Table 3).Â [Note: the fresh-water economists, who continue to willfully ignore critical lessons of our past, deeply disdain the Keynesian multiplier modelsâ€”but I havenâ€™t heard their objections to this other, much less theoretical approach, as in Table 3 in the above doc.]
What I donâ€™t get is their counterfactual.Â Other than unconvincingly waving hands, muttering how things should be better, how the EPA and OSHA rules are killing businesses, yada, yadaâ€”letâ€™s see some analysis.
Gov Romneyâ€™s got real economists on his team.Â If he wants to make the case that things would be better if we followed his planâ€”which actually looks pretty Hooverâ€™esque to meâ€”explicitly anti-stimulus re jobs and liquidate the housing marketâ€”letâ€™s see the model.Â Â True, most people wonâ€™t believe it anyway, but those of us familiar with counterfactual analysis would like to see if thereâ€™s anything there, or if this is just disgruntled smoke-blowing.
Iâ€™m not saying weâ€“when I was with the adminâ€“or the Federal Reserve got everything right by a long shot. Â But what I donâ€™t see is anything approaching a coherent argument about how things would be better otherwise.