It’s Finally Happened: Obama Has Driven the Pundits Insane!Posted: March 4, 2013
Sure, these two guys were a little nutty to begin with, but now they’ve gone around the bend.
First up: Have you seen the latest drivel from Robert J. Samuelson? Seriously, even the Washington Post should be ashamed to publish this guy. Get this — Samuelson says that sequestration is John F. Kennedy’s fault!
Fifty years ago, President Kennedy made a decision that, with hindsight, ranks as the biggest mistake of domestic policy since World War II. In many ways, it led directly to today’s “sequester” debacle.
Good Grief! What’s he talking about? The Bay of Pigs? The Cuban missile crisis?
No silly, President Kennedy decided to stimulate the economy.
In early 1963, he proposed a $13.6 billion tax cut (today: about $320 billion) even though the economy was not in recession and the tax cut would enlarge the budget deficit. Kennedy adopted the theory that government could, by manipulating its budgets, increase economic growth, reach “full employment” (then a 4 percent unemployment rate) and reduce — or eliminate — recessions.
It was a disaster.
High inflation was the first shock. An initial boom (by 1969, unemployment was 3.5 percent) spawned a wage-price spiral. With government seeming to guarantee 4 percent unemployment, workers and businesses had little reason to restrain wages and prices. In 1960, inflation was 1 percent; by 1980, it was 13 percent. The economy became less stable. From 1969 to 1982, there were four recessions, as the Federal Reserve alternated between trying to push unemployment down and prevent inflation from going up. Only in the early 1980s did the Fed, under Paul Volcker and with Ronald Reagan’s support, crush inflationary psychology.
A disaster? Really? I was a kid in the 1960s. The economy was great in those days–until 1973, those were the best economic times I’ve experienced in my lifetime. Unemployment was low, wages were good, people like my parents were movin’ on up to the middle class. But don’t take it from me–let’s see what an actual economist has to say about this. Here’s Dean Baker at the Center for Economic Policy Research (CEPR):
Samuelson’s economic history is even more striking than the linking of Kennedy to the sequester. He notes the fiscal stimulus that was sparked by the Kennedy tax cuts (and the Vietnam War and Johnson’s Great Society programs) and the boom that resulted, and tells us that “it was a disaster.”
Before looking at Samuelson’s horror story here, it is worth noting what happened in the boom, which can be treated as going through 1973, in spite of the recession in 1969. Growth over the 10 years from 1963 to 1973 averaged 4.4 percent, by far the most rapid stretch in the post-World War II era.
The unemployment rate hovered near 4.0 percent for most of this period, as Samuelson complains. This led to large gains in real wages and sharp declines in poverty. The overall poverty rate fell from 19.5 percent in 1963 percent to 11.1 percent in 1973, an all-time low. For African Americans the poverty rate fell from 55.1 percent in 1959 (annual data is not available) to 31.4 percent in 1973. I suspect most folks wouldn’t mind a few more disasters like this one.
As far as the recession story, Samuelson might have told readers that we had the same number of recessions in the 13 years following 1969 as we did in the 12 years preceding 1961. I suppose those recessions were also due to the Kennedy tax cut.
There’s lots more at both links. But you have to read Samuelson’s column to believe it. He goes on to claim that because of JFK’s tax cut, we developed “the loss of budgetary discipline,” and we’re still suffering from that 50 years later. So how does he rationalize the deficit spending under Reagan and W. Bush? He doesn’t.
And over at The New York Times, Iraq War propagandist Bill Keller disagrees with Samuelson: he thinks sequestration is “Obama’s Fault.” And of course he’s still droning on about “entitlements.” Keller admits that both parties agreed on the sequestration cuts, but it’s still really Obama’s fault because he hasn’t completely destroyed the safety net yet. And here’s the best part: Obama refuses to enact Simpson Bowles.
In December 2010 the commission, led by Erskine Bowles and Alan Simpson, delivered its list of spending cuts and revenue increases, plus the entitlement reforms necessary to fortify Medicare and Social Security for the surge of baby-boom retirees.
The Simpson-Bowles agenda was imperfect, and had plenty to offend ideologues of the left and right, which meant that it was the very manifestation of what Obama likes to call “a balanced approach.”
Ummm…no, Bill, the Commission never issued a report. They couldn’t agree on a unified agenda, so Simpson and Bowles wrote up their own report which was never approved by the commission members.
Now here’s where Keller really goes off the rails:
If Obama had campaigned on some version of Simpson-Bowles rather than on poll-tested tax hikes alone, he could now claim a mandate from voters to do something big and bold. Most important, he would have some leverage with members of his own base who don’t want to touch Medicare even to save it. This was missed opportunity No. 1.
That’s really funny. If Obama had campaigned on Simpson-Bowles, Mitt Romney would be president now. Because if you campaign on really really unpopular issues, people have a tendency to like, not vote for you.
There’s much more at the link, but you get the idea.