The great Obama/Pelosi/Reid-Keynesian government stimulus experiment is not so great
The U.S. economy may return to its pre-crisis peak next quarter after a recovery former Federal Reserve official Peter Hooper calls “surprisingly strong, historically weak,” which has seen corporations and the rich prosper while small companies and the unemployed struggle.
The economy has expanded an average 3.7 percent a quarter since the middle of last year, two-and-a-half times more than the median forecast of 58 economists surveyed in June 2009 by Bloomberg News. That still left first-quarter GDP shy of its previous pinnacle, according to Commerce Department data — the only time since 1955 the U.S. hasn’t gained back all the ground lost in a recession during the first nine months of a rebound.
The advance has “substantially exceeded expectations but remains well behind the norm,” said Hooper, chief economist for Deutsche Bank Securities in New York.
It would seem to me that, in the words of our benevolent Democrat overlords, “the greatest economic crisis since the Great Depression” would require an even greater response, one that would not only work, but grab the economy by the scruff of the neck and haul it to some serious growth.
But we have none of that.
And when you start from economic contraction, any move to the upside can be spun as great and be seen as “coming back from the brink”. Which is why the administration can blabber on with nebulous phrases like “moving in the right direction” and so forth.
But it’s all a crock. The normal ebbs and flows, the peaks and troughs of the economic cycle will see growth and contraction on its own. The job of any economic policy is to encourage the peaks and minimize the troughs.
As the experts are saying, to the extent that the stimulus had any effect on the economy, the results are less than inspiring. No matter how the White House’s propaganda machine tries to spin them.