Patterico's Pontifications

2/28/2014

Michael Hiltzik: The Obama Stimulus Worked!!!

Filed under: General — Patterico @ 11:11 pm

Michael Hiltzik, with another insipid column:

Once again: Yes, the stimulus worked.

Amazingly, there are still some holdouts in the political and economic community who insist that the Obama stimulus failed–that is, failed to arrest a steep fall in economic output and launch a period of growth in gross domestic product, jobs, stock market valuations, and other metrics that continues to this day.

This is not rocket science, folks. Stimulus money hurts the economy, because it diverts money from uses that benefit the consumer (as determined by market forces) towards uses that do not benefit the consumer (because they are misdirected by government intervention). There is no stimulus program that solely put idle people to work without diverting resources from where they would have most efficiently been used in a free market.

But don’t take my Austrian economics perspective at face value. Let’s look at what we were promised by the proponents of the stimulus. We were told that the stimulus would keep unemployment low, and that the unemployment rate would peak at just under 8 percent in 2009. Here was the Obama projection:

Screen Shot 2014-02-28 at 10.24.43 PM
Above: a chart from a
report cited by Obama to say unemployment would stay under 8 percent with a giant stimulus

Nice dream. In reality, though, unemployment went past 10 percent, and has only recently dipped below 8 percent.

(I hate using the standard unemployment figures because they are meaningless and do not reflect people who go on disability or otherwise drop out of the workforce. But the promises were made in these terms.)

That’s not all. We were also told the jobs would be “shovel ready”; that the stimulus would lift “2 million Americans from poverty”; that the green economy would create millions of jobs; and so on. These promises have not materialized — not any of them.

The Paul Krugmans of the world say that the stimulus just needed to be bigger! If your policy fails, it’s always because you didn’t implement that policy hard enough.) And indeed, that is Hiltzik’s line . . . today:

As we enter year six of the stimulus era, with yet another disappointing reading on GDP, it’s important to keep all that in mind: The stimulus works, it should have been bigger, and the impulse to replace it with austerity measures has done nothing but hurt workers and businesses. Anyone who claims otherwise doesn’t know how to read an economic chart, or doesn’t want to.

Today, Hiltzik says the stimulus should have been bigger. That’s not the tune he was singing in 2009, when he was simply beside himself with glee over the (to him very pleasingly) ginormous size of the stimulus:

In its embrace of the principle of stimulus by deficit spending, the Obama administration is launching a program infinitely more ambitious than anything Franklin D. Roosevelt proposed as a peacetime initiative in his entire tenure in the White House.

The White House is taking to heart one of the most important lessons of the New Deal — that it wasn’t stimulative enough.

. . . .

To a greater extent than most people understand today, Roosevelt was constrained by the political and economic orthodoxy of his era. . . . .

In terms of the scale of the program, the Obama administration and congressional Democrats have demonstrated that, by contrast, they’re uneasy with timidity.

In 2009, Hiltzik was giving a standing O for the huge size of the stimulus. Now that it has failed to deliver on any of the alleged benefits we were supposed to see, all of a sudden it was now too small.

Hey Hiltzik, sorry they archive your old stuff, dude. Oh well. Sucks to be you.

Michael Hiltzik gets paid by the L.A. Times to make outrageously silly claims that leftist failures are actually giant successes. ObamaCare? A huge success! because it makes insurance available to more people through the magic of government subsidies! The web site’s failure? A huge success! because fewer people are using government subsidies, thus saving the taxpayer money! The blatant contradictions are papered over, in a fashion one might suppose is indicative of dishonesty — the sort of dishonesty practiced by, say, a guy who hacks into his co-workers’ emails, or who defends himself on enemies’ Web sites using poorly disguised sock puppets.

Hiltzik is not just dishonest, you see — he’s stupidly dishonest. It’s that much more amusing because he thinks he’s so smart.

Thanks, again, to Dana.

37 Responses to “Michael Hiltzik: The Obama Stimulus Worked!!!”

  1. But his followers are stupidly dishonest, so you see, it sort of works out for him. Almost clever in its own way.

    Former Conservative (6e026c)

  2. I love the description of Douglas Holtz-Eakin as a “dyed-in-the-wool conservative Republican economist.” In the link Hiltzik provides, he describes Social Security as a big “success.”

    Patterico (9c670f)

  3. I’m now listening to him talk about the stimulus. He doesn’t have a philosophical problem with it — he just thinks it wasn’t executed correctly. He is a tinkerer. Perfect McCain advisor.

    Patterico (9c670f)

  4. He just said that no administration would have not done something like what Obama did.

    What a dyed-in-the-wool conservative!

    Patterico (9c670f)

  5. He also downplays the stimulus response and says the initial Fed actions stablized the fall far more than TARP or the stimulus.

    Patterico (9c670f)

  6. The standard excuses are:
    1) it didn’t work because we didn’t spend enough;
    2) it didn’t work because we didn’t have the best people leading the effort.

    If Progs could ever learn from history (a seven-letter word meaning what has happened in the past), and developed an ability to reason, they just might come to the conclusion that most have us intuitively know:
    There isn’t enough money, and even the best people are imperfect.

    askeptic (2bb434)

  7. ON the basis of GDP per capita, constant dollar, the economy has just now reached the 2008 numbers:

    Year GDP-US $ per capita 2005

    2008 43,282
    2009 41,588
    2010 42,227
    2011 42,682
    2012 43,308
    2013 43,325

    Even if you count from 2009, it’s only 1% real growth per year. But I guess if you work for the Times, numbers aren’t all that important.

    Kevin M (dbcba4)

  8. “dyed-in-the-wool conservative Republican economist.”

    This from a guy who probably things Gerald Ford was a crazed reactionary.

    Kevin M (dbcba4)

  9. BTW, if you ignore inflation and you ignore population growth (304M to 318M), the GDP gain is only 2.5% annualized from 2008-2013.

    And if, by some chance, the inflation rate is misstated, we’ve never come out of recession.

    Kevin M (dbcba4)

  10. Socks Hiltzik knows Stimulus was a rip off, he’s just spiffing up his resume. He’s on the short list for the Walter Duranty Award and wants to demonstrate his bona fides.

    ropelight (6b92cb)

  11. Hiltzik – those are lies, and you are a liar. Period. End of story.

    JD (4ebc00)

  12. teh Hiltzik Award
    goes to runner-up who lost
    teh Darwin Award

    Colonel Haiku (eaeaae)

  13. no surprises folks
    Hiltzik’s just another guy
    Goes full malaka

    Colonel Haiku (3add38)

  14. “the Obama administration is launching a program infinitely more ambitious than anything Franklin D. Roosevelt proposed as a peacetime initiative in his entire tenure in the White House.”

    And yet the results are remarkably similar.

    Unexpectedly.

    gary gulrud (e2cef3)

  15. I just want to focus on the promise that Sheriff Joe was going to keep track of where the money went and put it up on the net for all to see.

    If Sheriff Joe didn’t do that, there was no stimulus, just money that disappeared from the “Treasury” negative numbers on the ledger.

    MD in Philly (f9371b)

  16. Hiltzik is not just dishonest, you see — he’s stupidly dishonest. It’s that much more amusing because he thinks he’s so smart.

    There must be a genetic component to the leftism of people like Hiltzik. After all, he can’t be excused for suffering from youthful naivete, and he’s presumably had decades to observe the world for the way it really is. So perhaps willful stupidity is no less an innate facet of human biology than is, say, Tourette’s Syndrome, color blindness or mental retardation.

    Actually, I do recall a study of identical twins in which researchers concluded that a person’s political slant was innate, inherent, tied to the way a person’s brain was wired. Similarly, the fact a high percentage of, for example, homosexuals shares the trait of liberal biases and compulsions would be worth studying when trying to figure out what is nurture, what is nature.

    Mark (c04b2c)

  17. And yet the results are remarkably similar.

    I’m intrigued when various supposedly savvy economists through the decades have scratched their heads in puzzlement about the inability of FDR’s New Deal to truly jumpstart the economy. My own ignorance about that period of time was slapped out of me not too many years ago when I learned the basic yet very telling truth about how income tax rates were pushed to an absurdly high level during the 1930s, starting with Republican Herbert Hoover and taken to the next level by his Democrat successor.

    I will say that as foolish as most liberals are in the 21st century as they were in the last one, it does seem a good number of them at least aren’t as enamored with the idea of ratcheting up taxes as they might have been in the past, as their predecessors were, or even squishes like Herbert Hoover were.

    Nonetheless, will the debacle of Obamacare and its imposition of new costs, new taxes, upon the US economy of today be sort of a variation of what occurred with government-imposed edicts back in the 1930s, 1940s?

    Mark (c04b2c)

  18. and it’s not like we can even trust the GDP numbers (or any others) coming out of DC…

    they have the half-life of a promise from JEFH.

    http://www.zerohedge.com/news/2014-02-28/revised-q4-gdp-tumbles-26-initial-estimate-24-personal-consumption-hit

    redc1c4 (abd49e)

  19. But I guess if you work for the Times, numbers aren’t all that important

    If you work for the Times, truth isn’t all that important.

    Dirty Old Man (1adf95)

  20. It’s not the results that count, it’s how you feel about the results. Don’t you know anything?

    Glenn (647d76)

  21. Darkness has fallen, and the long night just begun, it has!

    Yoda (557254)

  22. When Bush was President, Hiltzik did nothing but trash the economy even when there was full employment.

    He’s such a left wing hack.

    Elephant Stone (6a6f37)

  23. Hiltzik’s article links to this article which shows a graph with two lines, one showing GDP growth rate and the other showing ARRA spending which appear to coincide to an impressive degree:

    Consider Figure 1; notice that ARRA spending is exactly at the same time as the recovery’s beginning. I think that reasonable people would say the burden of proof lies on those who assert the beginning of the recovery is due to anything, anything (Fed balance sheet expansion, TARP — both implemented six months earlier –, sunspots, or the return of Ancient Aliens) but the policies implemented by the Obama Administration.

    However the graph shows the ARRA starting in the 4th quarter of 2008. I checked a graph of GDP growth elsewhere to be sure that he hadn’t just mislabeled the time axis.

    Based on the standard neo-Keynesian models and the size of the stimulus, most economists repeatedly predicted significantly higher growth than actually occurred. Therefore the idea that it was actually too small means all those economists’ models were erroneous, except they were basing it on the exact thing that Hiltzik and that loony website are: the standard neo-Keynesian models. That is in fact the only way to judge a model, i.e., whether it accurately predicts what happens.

    Aside from the rather enormous fatal flaw of the drawing of the graph, there is no obvious reason to expect the growth rate of the economy to mirror the growth rate of the stimulus. I doubt that the Keynesian calculations would even predict that.

    Thus even if the ARRA graph was accurately drawn, his claim that the burden of proof lies on those who assert the beginning of the recovery is due to anything…but the policies implemented by the Obama Administration is utter baloney. How does anyone “prove” anything in science? By showing that a result conforms to the model’s prediction. Thus he has to first show how the models predicted that GDP and ARRA growth would coincide like that. Only then is there some burden of proof on those who dispute the claim. Of course the idiot doesn’t do that. But they do not at all coincide anyway.

    The article likens people who deny the stimulus worked with birthers and of course climate change deniers (and the warmists have the same problem as the Keynesians here, i.e. their predictions don’t pan out).

    Gerald A (bfbd30)

  24. I wouldn’t take the graph of the ARRA spending at face value either.

    Gerald A (bfbd30)

  25. #24

    I mean as far as the slope of the ARRA spending line.

    Gerald A (bfbd30)

  26. Food stamp participation increased 50% during Obama’s “successful” stimulus.

    PerfectSense (4d5c72)

  27. He’s such a left wing hack.

    left wing hack is redundant.

    redc1c4 (abd49e)

  28. I’m intrigued when various supposedly savvy economists through the decades have scratched their heads in puzzlement about the inability of FDR’s New Deal to truly jumpstart the economy. My own ignorance about that period of time was slapped out of me not too many years ago when I learned the basic yet very telling truth about how income tax rates were pushed to an absurdly high level during the 1930s, starting with Republican Herbert Hoover and taken to the next level by his Democrat successor.

    Did not the Depression end in 1933?

    Michael Ejercito (906585)

  29. So, “the stimulus should have been bigger”, eh?

    That not-quite-trillion dollars was more-or-less $3500 from each person in the country. And it wasn’t enough?

    Well, then, Mr. Economist Hiltzik (and all the other Kenyansians who believe Our Great Big Government should spend more-more-more) –> why don’t YOU –yourself, personally– pony up whatever-it-takes until YOU believe enough has been spent?

    (Sorry I can’t help you out with your Guv-Bux fantasy endeavor, Mr. Hiltzik (et al.); I’m kinda tapped out right now. Gotta scrape together this month’s mortgage payment.)

    A_Nonny_Mouse (b1c949)

  30. Too many on the left are economic dullards. Jon Stewart thinks he believes in socialism. While living in a Manhattan penthouse. How can the ‘you first’ rich socialists not see the absurdity? Or the audience that gives these folks ‘credit’ for their ‘brave’ opinions. How can opinions that carry no visible consequences be ‘brave’, anyway?

    East Bay Jay (a5dac7)

  31. 18. Again, these numbers are provided by the jailors:

    http://www.usgovernmentrevenue.com/federal_budget_estimate_vs_actual_2013

    Please note tax receipts, their trend, and the difference between budgeted and actual(the blue, current year can be toggled backwards) acknowledging that the Wreckovery has taken hold and things are getting better, GDP is always positive, just, and business is making record profits.

    gary gulrud (e2cef3)

  32. 28. And without “Lend Lease” would have continued into 1943.

    Pooter and Jinping are tacit allies.

    gary gulrud (e2cef3)

  33. I get it that Republicans think those I find adequate to represent as too boring, or too divisive and counterproductive, or simply ‘whose time has past’.

    But, just for the record, why do you need me to help pleasure yourselves?

    gary gulrud (e2cef3)

  34. From Investopedia:

    Definition of ‘Gross Domestic Product – GDP’

    The monetary value of all the finished goods and services produced within a country’s borders in a specific time period, though GDP is usually calculated on an annual basis. It includes all of private and public consumption, government outlays, investments and exports less imports that occur within a defined territory.

    GDP = C + G + I + NX

    where:

    “C” is equal to all private consumption, or consumer spending, in a nation’s economy
    “G” is the sum of government spending
    “I” is the sum of all the country’s businesses spending on capital
    “NX” is the nation’s total net exports, calculated as total exports minus total imports. (NX = Exports – Imports)

    GDP is commonly used as an indicator of the economic health of a country, as well as to gauge a country’s standard of living. Critics of using GDP as an economic measure say the statistic does not take into account the underground economy – transactions that, for whatever reason, are not reported to the government. Others say that GDP is not intended to gauge material well-being, but serves as a measure of a nation’s productivity, which is unrelated.

    Note that GDP includes all government spending. Now, if all government spending came from taxes collected and money borrowed internally, GDP would be a (fairly) accurate measure of a nation’s production.

    However, if the government is borrowing and spending a trillion dollars a year — think FY2009, 2010, 2011 and 2012, and half of that borrowing came from external sources, then our GDP was artificially and falsely inflated by two trillion dollars over that four year period. GDP would up overstating our actual production by half a trillion every fornicating year!

    But, it gets worse. Since GDP includes all government spending, it includes the interest payments and redemptions of treasury bills. With 32% of our total debt (and 46% of the debt held by the public) held by foreigners, roughly 32% of interest payments and debt service (roughly $135 billion in FY2013) counts as part of GDP but is actually money paid out to foreigners and isn’t production at all.

    The economist Dana (af9ec3)

  35. 34. China has nothing on us for redonkulous economic data.

    We are exceptional.

    gary gulrud (e2cef3)

  36. 23. The article likens people who deny the stimulus worked with birthers and of course climate change deniers (and the warmists have the same problem as the Keynesians here, i.e. their predictions don’t pan out).

    Comment by Gerald A (bfbd30) — 3/1/2014 @ 5:36 pm

    The warmists/Keynesians have the same problem as all cultists. There is no amount of failure that can shake their faith in the absolute truth of their cult.

    It’s like evangelists like Harold Camping who say they can predict when the end of the world, Judgement Day, will arrive.

    Or primitive cults who believe that throwing virgins into volcanoes will end a drought and make it rain.

    Like Hiltzak, if it doesn’t rain they’ll claim opponents didn’t let them throw enough virgins into the volcano to please the weather gods. The “stimulus” wasn’t big enough.

    When it finally rains, they’ll claim that as proof that throwing virgins into volcanoes works.

    Steve57 (2991b6)

  37. “C” is equal to all private consumption, or consumer spending, in a nation’s economy
    “G” is the sum of government spending

    Keep in mind how this effects how salaries are reflected in GDP.

    If the Department of the Interior hires a geologist to discover and study oil deposits on federal land at $100k/year, then that $100k is added to GDP.

    If Shell hires a geologist to discover and study oil deposits at $100k/year, then that $100k is not added to GDP.

    Because that private sector geologist has to produce $100k a year in oil first (C = consumer spending).

    So this is why the stimulus was an even bigger failure then the numbers would indicate. By appropriating money that might have done some good had it been invested in productive private sector activity and instead wasting it on the parasitic public sector, the GDP numbers hide the impact of the theft on people’s actual quality of life.

    Steve57 (2991b6)


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