“The Propaganda of Incompetents”

That’s what Investors Business Daily calls the Obama administration’s attempts to put a positive spin on the economy. To be fair, of course, we can’t blame the administration for optimism–it would remiss not to adopt a positive tone. At the same time, the administration’s combination of dissociation from reality and ongoing attempts to blame others for the failure of its own policies is unattractive at best. IBD editorializes:

As the “recovery summer” turns into a nightmare, one thing has become painfully clear: This is the most economically incompetent administration since the Great Depression.
Two years into the Obama era, when the U.S. should be enjoying a booming recovery from the 2007-08 meltdown, with millions of new jobs and higher incomes for all, all we see is economic wreckage from the unbelievably foolish policies pursued by the White House and the Democrat-controlled Congress.

That last is a significant point. Historically, rebounds from short, shallow recessions have been unspectacular. But a deep recession should produce a correspondingly sharp recovery. The fact that we have not had such a recovery, as for example in the early 1980s, can reasonably be attributed to the Washington Democrats’ job-destroying policies. IBD continues:

Friday’s frightening jobs report was only the latest in a series of releases indicating the “recovery” is faltering. Unemployment in July was unchanged at 9.5%, but a net 131,000 jobs were lost on top of 97,000 more than first accounted for in May and June. …
[Secretary of Labor Hilda] Solis … repeated — with the stock market selling off 100 points as she spoke — the bogus claim made by the White House and uncritically parroted by its media pals that timely action “saved or created more than 2.5 million American jobs.”
As we’ve said, this is utter nonsense. Completely made up. And, by the way, the official who made it up — Council of Economic Advisers chairwoman Christina Romer — quit on Friday to return to academia, her reputation for accuracy in tatters.
Here’s the real record: America has lost 4.1 million jobs since Obama took office and 7.7 million since the recession began in December 2007. So most of the jobs lost have been under this administration. Whatever else you might call Obamanomics, “successful” isn’t it.

PAUL adds: I agree with IBD that this administration has not handled economic issues well and that its inadequacy has contributed to our ongoing economic woes. But IBD overlooks other possible (and, in my view, likely) explanations for the dire jobs picture.
First, many economists believe that, for various structural reasons, the employment picture improves more slowly now during an economic recovery. Employment has always been a “lagging indicator,” but in recent recoveries, these economists say, it has lagged longer. They point to the “jobless recovery” phase of the economic recovery of the early 2000s.
Second, the recession of 2008-09 was associated with a banking crisis. Some economists warned that the recovery would, as a result, be less robust than the normal recoveries we have experienced.
It’s easy to overestimate the impact of government policies on short-term economic developments. I believe IBD does so here.


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