Tuesday, February 10, 2009

Everyone’s an Economist in D.C., Even Mullah Mitch McConnell

The other day, as he introduced a team of outside economic advisers, President Obama bemoaned the economic and historical illiteracy of certain obstructionists responsible for crafting economic policy in the Congress: “You’ve got some economists and some folks who think they’re economists. By the way, these days everybody thinks they’re economists.”

The President’s criticism was more pointed in his brilliant press conference on Monday:

“And in fact there are several who have suggested that FDR was wrong to intervene back in the New Deal. They're fighting battles that I thought were resolved a pretty long time ago.”

No kidding.

Evidently, the memo didn’t reach the Republican insurgents’ leader, Mullah Mitch McConnell, pictured below.

McConnell, who is still navigating the murky waters of New Deal denialism (rather than reading, say, A HISTORY BOOK!) said on the Senate floor before voting against the President’s stimulus bill:

“But one of the good things about reading history is you learn a good deal. And, we know for sure that the big spending programs of the New Deal did not work. In 1940, unemployment was still 15%. And, it's widely agreed among economists, that what got us out of the doldrums that we were in during the Depression was the beginning of World War II."

Let the experts -- one historian and one Nobel Prize winining economist -- answer this STUPIDITY. Jonathan Alter, a senior editor at Newsweek and author of “The Defining Moment,” about FDR’s first 100 days, said:

It’s ridiculous. [McConnell] needs to spend a little time in the library in Kentucky and read more than the right wing critiques. What was he imagining, that tax cuts got us out of the Depression? It was GOVERNMENT SPENDING that got us out of the Depression. First, FDR was able to cut the unemployment rate from 25% to 14%. Now they might not consider that successful (unless) you were in that group of millions and millions of Americans that were put to work and had their hope restored. Overall the New Deal was tremendously successful.”

Noting that FDR certainly wouldn’t have been reelected carrying all but two states (and elected for a third term) if the people didn’t believe his programs were working, Alter concluded with a word to the wise that will surely fall on deaf ears: “Republicans would do well to remembers this.”

Nobel Prize winner for Economics Paul Krugman minced no words in stating that FDR should not have taken his hand off the accelerator when he listened to those on the other side who argued for a balanced budget in 37-38:

“Note in particular that in 1937-38 FDR was persuaded to do the “responsible” thing and cut back — and that’s what led to the bad year in 1938, which to the WSJ crowd defines the New Deal.

Implications for Obama: be inspired by FDR, but don’t imitate him slavishly. In particular, your economic policy should be bolder, not more cautious.

Incidentally, WWII economic policy was precisely the largest infusion of government spending in the history of the Republic, to that date. Speaking of historical revisionism, the President addressed the McCains and McConnells of this world, still wedded to the fantasy of Reagan/Bushonomics:

“First of all, when I hear that from folks who presided over a doubling of the national debt, then, you know, I just want them to not engage in some revisionist history. I inherited the deficit that we have right now and the economic crisis that we have right now.”

And so, to Mullah Mitch McConnell, representing millions of trickle-down snake oil (VOODOO) economics salesmen, including Reagan wunderkin David Stockman who recanted Reaganomics as a fraud and now faces jail time (on unrelated charges):

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