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He Said/She Said on the Economy at NPR

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Tuesday, 17 April 2012 06:54

Is today Tuesday? Some people say it is and others say it isn't. It's just so hard to decide.

That is pretty much what NPR told us about President Obama's record in turning around the economy this morning. It cited Alan Blinder, an economist who has served in past Democratic administrations, saying that President Obama's policies helped the economy. It then cited Douglas Holtz-Eakin, who served in the Bush administration and was the chief economic advisor to John McCain saying that his policies harmed the economy.

It would have been helpful to give us the assessment of neutral observers such as the Congressional Budget Office. It also would have been helpful to try to evaluate the claims of the Romney campaign that the stimulus harmed the economy.

NPR reported that the Romney campaign said:

"The president made the recession worse, the statement says, 'by pursuing a series of disastrous, partisan policies that created uncertainty, discouraged investment and stifled job creation.'"

There is a simple claim that can be evaluated here. The Romney campaign says that investment would have been higher had it not been for Obama's actions. This can be evaluated by comparing the path of investment with what might have been predicted absent the bad policies from President Obama.

Investment in equipment and software is currently close to 7.5 percent of GDP. It was 7.9 percent before the downturn in 2007. Given the huge amounts of excess capacity in large sectors of the economy, it is difficult to envision a scenario in which investment would have been much higher than it is today. If the Romney campaign is to be taken seriously in this claim then it should have to present some evidence that would establish its counter-factual as being credible. On it's face, it is not.

This piece also included a very misleading assertion from Holtz-Eakin. Referring to Holtz-Eakin the piece reported:

"He says any president would have acted to stop the economic free fall in 2009. The issue, he says, is the quality of the president's responses."

Actually, the free fall begin in September of 2008. President Bush did nothing to stop the free fall in the last four months of his presidency. Perhaps he would have eventually taken some action to boost the economy had he been in office longer, but given President Bush's track record it is far from clear that any president would have taken action to stop the free fall.

Comments (11)Add Comment
...
written by azimir, April 17, 2012 8:01
This is why I don't give any money to NPR. O wait, my wife says that I do....
...
written by Jonah, April 17, 2012 8:12
"The president made the recession worse, the statement says, 'by pursuing a series of disastrous, partisan policies that created uncertainty, discouraged investment and stifled job creation.'"

That's true. One of my sales reps called in a HUGE order yesterday. Record breaker. Only way I could fill it would be to hire another guy to work the assembly line. I could have made a handsome profit on this deal .... but Obama's partisan policies left me uncertain about hiring him. So, I passed on the deal. Maybe I'll run my business smarter when there's not a black guy in office.
The BIG Lie (Surprisingly Not Called Out)
written by Paul, April 17, 2012 10:05
Referring to Holtz-Eakin the piece reported:

"He says any president would have acted to stop the economic free fall in 2009."

The essence of conservative economic theory is that markets must be left alone so that the Invisible Hand can do its job of rebalancing everything. Conservatives say that government "interference" in the economy only makes things worse.

Keynes obviously disagrees and advocates that the government adopt fiscal policies to counteract recessionary forces, which is what Obama did.

So are conservatives now Keynesian too? Why are they allowed to lie about their well known economic policies?
NPR policy
written by Sean, April 17, 2012 10:31
Didn't NPR just rewrite their internal policies and promise to stop the he said she said nonsense?
Nobody could have predicted...
written by tom allen, April 17, 2012 11:11
... that an inadequate stimulus would be used as an argument against further stimulus. Nobody could have predicted that Americans would be angry at stagnant -- even worsening -- unemployment numbers. Nobody could have predicted that pivoting toward the deficit during a depression was an awful idea.

Of course Romney's wrong. So is Obama. Stop covering for him.
Obama Equally Wrong as Romney?
written by Paul, April 17, 2012 12:09
Obama has not significantly reduced the deficit despite his "pivot"; 3,000,000 new private sector jobs have been created under Obama with many hundreds of thousands more to come; the "inadequate" stimulus was based on widely held assumptions about the depth of the recession that every economist got wrong - it was a much deeper decline.

The equivalence argument is BS, which was Dean's point well made.
People think the President has more power than he has
written by Floccina, April 17, 2012 12:18
People think the President has more power than he has on economic matters. Never the less I have heard that Obama has not moved quickly enough to filled positions at the Federal Reserve which can be blamed on him but most of the blame should be on the federal reserve and the politicians who created the federal reserve and structured it as it is, and those earlier politicians who took over currency issuing during the civil war. The monetary system does not function very well to stabilize the economy in a downturn. Note most politicians loved the housing bubble while it was going string (to name 2 reasons: higher property taxes and home owners vote).

IMO the Fed has not done enough. The federal reserve should adopt NGDP targeting.
NPR - now as good as CNN
written by Hayduke, April 17, 2012 1:07
Yeah, NPR said they were changing their policy away from the 'he said - she said' type of reporting which it had perfected. Old habits die hard as I can't tell any difference. But it does provide an instructive example of bad journalism as I drive my son to high school in the mornings. Anymore we just laugh at it rather than get annoyed.
Bailing Out
written by J, April 17, 2012 3:19
How often are we going to let pundits and candidates bail out congress by throwing the presidential office under the bus? The past administration aside, the current policy failures are the responsibility of congress. Obama is a lame duck president because the Democratic party does not know how to coordinate and communicate.

Anyone who ignores the point that congress dictates policy should have their high school diploma or GED stripped away. What's the point of even having a congress without them accepting accountability for developing and implementing policies to help their constituents?

Given the length of the recession and impact upon so many people it makes you think what motivates them to act as an institution other than political contributions and post-office consultation/public speaking gigs.
owner
written by mel in oregon, April 17, 2012 3:22
as poor of a job as obama has done, romney would be pathetic. he has no conception of what is necessary to stop america's decline. like all wealthy people he hides his money offshore. he bought bain capital, fired the workers & patted himself on the back for making it "profitable". america is no democracy, well over 70% of our citizens want to end the invasions of iraq & afghanistan yesterday. we'll be there for decades. again, well over 70% of americans want prosecution for the crimes committed by wallstreet financial entities such as goldman sachs. nope, possible a few token fines, but there will be no prosecutions from the justice dept or the state's attorneys generals. occupy movements? no because all the local police departments have oodles of money for the best military hardware. they will crush any dissent, look for a ton of police brutality at the demo & rep conventions. but then america was never meant to be a democracy in spite of the malarkey you're taught in school. it was a republic, now it's an empire. the "founding fathers" didn't trust native americans, blacks & white serfs coming over from europe. they wanted an aristocracy made up only of landholding men. nothing's changed except technology & the still mistaken belief by most americans that we are the "chosen people". no we aren't, like all empires, the sun has set on ours.
The Eight Year Right Wing Black Hole
written by FoonTheElder, April 23, 2012 11:10
The right wing mind has an eight year black hole of nothingness called the Bush/Cheney Administrations.

Try as they might, they can't anything from those eight years with the exception of some vague event going on around 9/11/01.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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