Saturday, August 27, 2011

Dean Baker is Puzzled by the Resounding Silence

The press normally loves to pick over flaws and faults and gaffs and errors of politicians, but as Dean Baker points out in his Beat the Press blog, there is an odd silence about Obama's abysmal ignorance of the depth of misery and suffering in the current depression:
Obama Says He Just Found Out How Bad the Economy Was in 2008, Where Is the Ridicule?

The media love to jump on politicians when they say something stupid or inaccurate about their personal lives.They will fill pages and pages of print, and take up hours on radio and TV, talking about the comment. They will bring on experts (i.e. political reporters and gossip columnists) to tell the public what the gaffe means and why it makes that person inappropriate for elected office.

However they somehow don't get the same urge when a political figure makes an incredibly foolish remark about a policy matter. This is striking because most people are perfectly competent to assess the appropriateness of a statement about a personal matter based on their own lives' experience. In other words, they really don't need the "experts" to tell them how important or unimportant a particular remark is. On the other hand, most people do not have expertise in the various areas of public policy, so they could benefit from having an expert tell them when a political figure makes an especially off the wall comment.

In that spirit, the Washington Post absolutely should have included a heavy dose of expert ridicule when it reported that President Obama said:
“I have to admit, I didn’t know how steep the climb was going to be. Because we didn’t realize — we just found out a week ago that the economy that last few months in 2008 was even worse than we had realized.”
It is true that the Commerce Department just revised down the GDP data to show that the decline at the start of the recession was even steeper than had previously been reported. However, by far the most meaningful measure of the steepness of the climb needed for recovery is the employment to population ratio (EPOP):the percentage of the working age population with jobs. This is reported monthly and is not subject to substantial revision.

President Obama's team always knew exactly how far the EPOP had fallen since the start of the downturn and therefore knows how many people must be put to work to get the economy back to full employment. The lower than previously reported GDP is an interesting piece of information, but tells us almost nothing new about how much ground must be made up.

The Post should have included the comments of economists ridiculing the idea that President Obama has just now discovered how bad the downturn was. It might even be worth a separate article or two. If the statement is actually true (i.e. President Obama just realized how bad the downturn was) then it is deserving of far more attention than his comment about working class whites being bitter and clinging to gun and religion before the Pennsylvania primary.
Obama can't be ignorant of the facts. He has met with Paul Krugman and Krugman has been repeating since 2008 that the downturn was worse than was being reported, that Obama's response was pitifully small compared to the need, that the government needed additional programs, and that Obama was playing political games by insisting that his stimulus in March 2009 was "just right" and that it was "working just fine" and that the US economy was "recovering" from the downturn. Instead, Krugman has been insistent that the US is stuck in the decades long "liquidity trap" like Japan suffered. In fact, Wikipedia notes:
On February 9, 2009, in warning of the dire consequences facing the United States economy after its housing bubble, U.S. President Barack Obama cited the "lost decade" as a prospect the American economy faced.
But Obama's policies have not responded to this reality.

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