Credit for avoiding a second Great Depression? A low bar?
Center for Economic and Policy Research (CEPR) poses a question that needs a careful look and response:
In its top of the hour news segment NPR reported that President Obama hoped that voters would give him credit for avoiding a second Great Depression. If this is an accurate representation of what President Obama said then it should have devoted a segment to economists…for trying to set an unbelievably low bar for measuring the success of his economic policy.
The post has no elaboration itself, but readers are knowledgeable. This is more like a topical thread…and of course relates to message and campaigns of the candidates. But the Republican candidates have their own set of rhetorics.
Update: Reader GaryT provides the links to NPR and a CBS News transcript of the interview.
This does sound like a low bar. But remember, obstructionist Rethugs have effective negative control of both houses of Congress (with the filibuster) and are commited to making Obama fail.
If the country goes down in flames, that’s just collateral damage.
Besides, austerianism, which has been contracting global economies for three years now, is still the order of the day. A second great depression is still a distinct possibility, and if the Rethugs win big in the next election will become a near-certainty.
We’re pretty much screwed,
It sounds like a low bar but when you have a completely obstrctionist congress and 60 senate vots are required to pass anything it’s not as bad as it seems. Lots of mistakes can be pointed to but it was a pretty big pile of junk to start off with on January 21 2009. I wonder if most of what Pelosi got passed in the house had made it to law how different things might be.
I agree with jazzbumpa. It sounds like a low bar but when you have a completely obstructionist congress and 60 senate votes are required to pass anything it’s not as bad as it seems. Lots of mistakes can be pointed to but it was a pretty big pile of junk to start off with on January 21 2009. I wonder how different things might be if what Pelosi passed in the house had made it to law.
Welcome to the Not So Great Depression. 😉
Another Long Depression, I fear. 🙁
yes to all that. but if O is expecting the people to give him credit… even if it was true… he is a man without a clue.
As Europe’s leaders roll up their sleeves and prepare to slug it out for the euro’s very survival, German parliamentarian Frank Schaeffler explains to RT why piling new debts on top of old ones can only lead to collapse.
Let’s straight out a few things here…..
First, it wasn’t NPR reporting this, this is an AP article on the NPR website….and a number of other websites…
Second, what the President ACTUALLY said was:
Kroft: With the unemployment [rate at] 8.6 [percent], you’ve still got soft consumer demand. You’ve got no business investment. There’s still a fairly steady downturn in housing prices. Do you see some hope? Do you think that things are gonna get better? Well, do you think that you might have the unemployment rate down to eight percent by the time the election rolls around?
Obama: I think it’s possible. But, you know, I’m not in the job of prognosticating on the economy. I’m in the job of putting in place the tools that allow the economy to thrive and Americans to succeed. And, you know, keep in mind that when I came into office eight million jobs were gone. And things were cratering. Six months later, the economy was growing again. And we’ve now had nine consecutive quarters, two and a half years, in which the economy’s grown. About nine months later, we were creating jobs again. So, does that make people feel better? No. You know, we did all the right things to prevent a Great Depression and to get the economy growing again and to get job creation going again. But it hasn’t made up for the hole that was created in those six, nine, 12 months before my economic policies took effect.
You know, sometimes when I’m talkin’ to my team, I describe us as, you know, I’m the captain and they’re the crew on a ship, goin’ through really bad storms. And no matter how well we’re steerin’ the ship, if the boat’s rockin’ back and forth and people are gettin’ sick and, you know, they’re bein’ buffeted by the winds and the rain and you know, at a certain point if you’re askin’, ‘Are you enjoying the ride right now?’ Folks are gonna say, ‘No.’ And are they gonna say, ‘Do you think the captain’s doing a good job?’ People are gonna say, ‘You know what? A good captain would have had us in some smooth waters and sunny skies, at this point.’ And I don’t control the weather. What I can control are the policies we’re putting in place to make a difference in people’s lives.
Kroft: There’s a general perception that the stimulus was not enough. That it really didn’t work.
Obama: Let me stop you there, Steve. First of all, there’s not a general perception that the stimulus didn’t work. You’ve got John McCain’s former economist and a whole series of prominent economists, who say that it created or saved three million jobs and prevented us from goin’ into a Great Depression. That works. So that’s not true.
It is true that some people have argued, given the magnitude of the crisis we were in, we should have done an even larger Recovery Act. And then, I’m bumpin’ up against the realities of Congress, which is this Recovery Act was twice as large as most people thought was even possible.
The recurring challenge is always gonna be, even if we’ve done the right things, if people’s reality right now is still difficult, they’re gonna be frustrated. And they should, because I’m frustrated. The question in the election–
if you read carefully you will find that you are arguing against someone who is not here.
no one said “obama said..” and it is a reasonable inference from what you say he said that “he hopes…”
and i still don’t think anyone is going to give him credit… even if it were true.
me, i’m mad at him about other things. and no, i don’t think his “stimulus” was well targeted. and yes, i think the “payroll tax holiday” is a crime against the people.
oh, to answer your other questions…
are his policies responsible…? hard to tell. there are other factors. if they are responsible, are they responsible for not being enough?
If the result is NOt another recession…? no one gets credit for something that didn’t happen. but there are those who argue that that we are still in a recession/depression. i guess you can parse out whether we are in “another” one.
Um, actually coberly, it is Dean Baker that IS “there” making the claim about the “bar”, so yes, there is someone talking about what the President said.
The problem is that Dean Baker decided to make the bet back in June that we were headed into a depression. So far, he is losing that bet, so anyone (including the POTUS) who says otherwise, reminding Dean of this fact, will get this kind of reaction from him.
“are his policies responsible (for the increasing employment and GDP since they went into effect) ..? hard to tell. there are other factors. if they are responsible, are they responsible for not being enough?”
What a silly comment! You decide to definately NOT answer my question (after beginning with a statement claiming you would) and then ask a vague rhetorical question to top it off!
You ought to be in politics, it is your calling.
Well hate to burst anyone’s bubble. ..I give him credit.
i was having a little fun with you, but I see that you are really delusional. Can’t do much with that.
But best I can see, Dean Baker is not here. And I did answer your question. Didn’t give you the answer you wanted, but well that happens sometimes.
as for having to answer if they are responsible are they responsible enough… sorry, that was a bit subtle for you.
Obama: “And, you know, keep in mind that when I came into office eight million jobs were gone. And things were cratering. Six months later, the economy was growing again.”
He can’t really take credit for that, can he? That’s too short a time frame. Bush and the Fed are responsible for their share.
Also, he sounds defensive to me. Not a good sign for his reelection.
Somewhere you got the idea that my initial comments were directed towards you.
They were not, so there was no reason for you to feel the need to take any of it personallly or to respond to me in any manner. You took it upon yourself to make the error of confusing yourself about to whom I was responding.
My comments were directed towards the original post and it is strange that you, an obviously bright young thing, didn’t pick that up. Perhaps you are not as bright as you let on. i mean, you now do see that there is a person who DID comment about a “bar”, and you do see that my comments were directed towards those made by Dean Baker…..and yet you decide to transfer yourself into his shoes and then lob ad-hominems at me…….calling me “delusional”…the IRONY!
I never assumed Dean Baker was “here”, I was responding to a posting HERE where a statement of his exists. I am VERY conscience of the fact that he is not here and I don’t believe that I had made any indication otherwise. How it is that you came to some other conclusion is beyond me. I have noticed that you do often enjoy going off on tangents like this, which I find strange.
I’ll try to help you again, my confused bright thing……rhetorical questions are not answers…at all.
You should have learned that in Debate 101.
Now IF you feel the need to respond to my comments, do so by direct means, not by false assumptions, misdirection and rhetorical games.
Schaeffler is way late to recognizing debt politics.
The German pol should have realized in 2007, his banksters could not make it in the euro environs lending to their customers, forever.
Hitler used stukas, today the Germans are using euros.
When they “own” all their production they might as well send in the gestapo.
Krugman says we are in a depression. So, I believe him, since I am a wild-eyed socialist like him. No one likes a President who hasn’t stopped the pain. And, this one hasn’t. He concentrates on the wrong stuff (SS instead of jobs) and doesn’t get particularly worked up about getting out of Afghanistan which is a waste of human life–forget the money we’re throwing away.
The Republicans don’t care who the President is as long as he’s a Republican and they’re picky even about that–not just any old white guy will do. Meanwhile, they’ve found a way to control the government without being a majority. The country is going to hell in a handbasket so I’m calling it a depression. Sure depresses the hell out of me. NancyO
this has gone on longer than it’s worth. your snotty attitude is what provoked my first response. i think i am right on the facts… about ‘oo said what to ‘oo. if i’m wrong no big deal. but if i’m right you might think about reading the actual words and not the ones you see between the lines. and the difference between a rhetorical question and a point of logic.
Nancy, Brad DeLong back in the Spring decided that he’d call this the Little Depression rather than the Great Recession. That works for me because I associate a depression with high unemployment and low economic output relative to potential ouput for a prolonged period, whereas we have an accepted a definition of recession that focuses on negative GDP growth rates. And by these metrics our depression is “little” compared to the the Great Depression.
Obama takes credit for avoiding another Great Depression. I give more credit to FDR (and maybe LBJ) for strengthening the safety net–imagine, for example, that we had not sent out those Social Security checks and covered those medicare/medicaid bills. But sometimes I do consider a low bar for a President or Congress by asking whether they made things worse, which is something they can do quite well. Imho Obama overall hasn’t made things worse and has prevented Congress from doing as much as they threatened to do to make things worse.
As for actually turning things around, this article explains my depression:
” since I am a wild-eyed socialist like him.” Nancy O.
I doubt seriously that Krugman would accept that description of his personal economic ideology. Socially progressive ideals Prof Krugman may have, and he’s not affraid to display them. He is more likely described as an economist that can support capitalism, but also recognizes the need for economic activity to be regulated in order to assure a free market free from fraud, dishonesty and gross malfeasance. And there is no law of economics that requires that a capitalist economy exclude any and all efforts to provide for all members of the society within which that economy functions. In other words, capitalism and social responsibility need not be mutually exclusive phenomenon.
It’s welfare capitalism that results in the economic catastrophies that we witness from time to time. Whether or not welfare for capitalists can be excised from capitalist ideology is a question that remains unanswered, but as yet there is little evidence that such surgery is possible without significant re-education of the populace. The capitalists certainly seem unwilling to give up their place at the government trough. Yes, I mean to imply that the average capitalist is inclined to gorge themselves at the expense of all others.
Krugman says what I think. In that regard, I think as he does. I do not think he is a socialist. And, I know perfectly well that capitalism is compatible with several economic models any of which would permit attention and care to the well-being of all citizens. You know, the kind of capitalism we used to have back in the 50’s.
I suspect I’m older than you and have argued this subject longer than you–but, no matter. Of course, the average capitalist in this best of all possible “Back to the Future” worlds is more avaricious even than his 19th century predecessors. There’s more now to steal. So, in this year of living dangerously, the question is, “What should we do?” NancyO
I’m not a Marxist either, but I think Marx said that capitalists just couldn’t help themselves, so under any “capitalist” system this is what we get. Unfortunately we have seen that a “socialist” system is no protection.
One hopes that we still have enough Democracy left that when people vote their pain they will not vote for the clowns .. on the other hand if they vote for O they are likely to be disappointed.
coberly: “One hopes that we still have enough Democracy left that when people vote their pain they will not vote for the clowns .. on the other hand if they vote for O they are likely to be disappointed.”
But don’t you see that this choice means Democracy is already gone. Clowns vs. status quo???
I am afraid I agree with you.
No President is our friend. Sigh. NancyO
But….it wasn’t “welfare capitalism” that caused this recession or the Great Depression, it was VERY loose lending (low reserve requirements) and unregulated MBS/CDO markets.
So when does he get credit?
The economy has continued to grow since June of 2009, albeit slowly, meaning no recession or depression, which was the bar set by Baker.
Again, it is a “low bar” if the POTUS sets it…..so what kind of bar is it if Baker sets it?
“it was VERY loose lending (low reserve requirements) and unregulated MBS/CDO markets.”
A suspension of what ever regulation may have been in place, together with a persistent refusal to enact meaningful regulation, is a primary form of welfare capitalism. The bailout that followed is a more pure form of welfare capitalsm, more directly recognizable as welfare for those who need control rather than a bailout.
“Welfare capitalism” (I thought) basically referes to company/corporations providing pension/benefits to their employees…..at least that is the “old school” definition.
What you seem to be talking about is “socializing the losses” of the banksters….and again, that did NOT cause the Great Depression or Bush’s recession, it was a resultant action to save the US (world) credit market from the crisis of 2008.
Welfare capitalism is when the capitalsts receive welfare.
That is not the standard definition of “Welfare Capitalism”, you are describing something that coroporations have recieved for decades at fed and state levels…..which still had near nothing to do with the crashes of ’29 or ’08.
Cmon folks, lets keep the context of Jack’s argument in mind:
“It’s welfare capitalism that results in the economic catastrophies that we witness from time to time.”
Again, this state support of corporations was NOT the cause of this or the ’29 crash. It was in large measure the lack of regulating out-of-control markets.
These false arguments are getting into the parallel CRA myth…..which was NOT state support of corporations.
I’ll wait for any supporting evidence of corporate support from govt that causes crashes…..
Frankly I had not heard the term, welfare capitalism, use in the popular media as Gary T defines it, but he appears to be correct regarding the established/formal understanding of the term. Strangely enough though he is correct, a review of the references to the term often point out that it is a paternalistic character of capitalism that is “dying out” of late.
It would certainly been instructive to review current references to the term, welfare capitalism, in order to determine its meaning in popular usage. It is definitely as Gary says in formal use, but I’d never seen it referred to as such until I made an effort to find a definition.
And I was not referring to “state support of corporations” per se, but rather to the structuring of laws and regulations so as to benefit corporations in addition to the direct grants of money for various reasons such as farm subsidies and the oil depletion allowance.