1. Bold government action staved off a Depression, saving or creating 1.5 million jobs.
“Just remember,” Treasury Secretary Tim Geithner said on November 1, 2009, “a year ago today, last year, you had markets around the world come to a stop. Economic activity just stopped, came to a standstill, like flipping a switch.”
Geithner implies that the American business climate improved substantially in the first year of the Obama administration. In fact, nearly every indicator, from employment to freight transport to rents to retail sales to real estate, has headed steadily south. In some cases, such as unemployment, the numbers have been far worse than the Obama economic team’s worst-case projections. In others, such as real estate, the weakness of the market is masked by expensive government support, including but not limited to the unkillable First-Time Homebuyer Credit, an assault on loan underwriting standards (see Lie No. 2) by the Federal Housing Authority and the government-run mortgage giants Fannie Mae and Freddie Mac, and the completely opaque $75 billion Home Affordable Modification Program (HAMP).
The $787 billion in stimulus spending authorized by the American Recovery and Reinvestment Act of 2009 is now best known for its inflated and unsupportable job creation numbers. At press time, Council of Economic Advisers Chairwoman Christina D. Romer (who, confusingly, made her academic reputation proving that fiscal stimulus did not help the U.S. economy during the Great Depression and World War II) was giving the stimulus credit for 1.5 million American jobs in 2009. All efforts at checking her claims, however, have turned up very different numbers.
There’s a lot more.
The Great Depression wouldn’t have been a Depression in the first place, if Hoover had been as hands-off about the economy as conventional wisdom now claims.
As it was, he lost in 1932 to a man who promised to do the same kinds of crap Hoover had been doing, only harder. Which just goes to show, being a Democrat Lite never works.
How about this? Given how successful Cash for Clunkers was, how about we have something similar for homes? We can call it “Dough for Dumps”. If a home is too energy inefficient, poor quality, damaged, or deeply underwater (that is, more money is owed to a bank that the Obama adminstration like than the home is worth), then have the government buy it and destroy it in a economic and ecologically sound manner. I figure a modest three trillion dollars would cover it.
McGehee, we’ve created a society where no person or entity is allowed to fail. The moral hazard created by the attitude will haunt us for generations.
I don’t know which is more frightening:
The administration of commandante zero
1) actually believes this;
2) believes the public will believe this;
3) believes they have the economic ‘proof’ to prove this.
I find myself intrigued by the remark about 3-4 million homes coming onto the market in the next few years from loan defaults. Current existing home sales are around 5 million a year. So while that’s a lot of homes to come out to the market, it’s a fraction of the total volume. The real issue, I think, is how the failures are concentrated geographically and by financial institution. I suspect the problems are in regions that saw the most run up in house prices.
When’s Jim going to come in here and comment that TG is right, and the numbers are really not what this article says, and that we won’t admit that the economy is better because hate Obama’s skin color but loved GWB to his very essence?
Jim?
OOOhhhh, Jiii, iiiim?