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The Obama team made 2 major miscalculations; the first was that they underated the severity of the recession, they didn't think they need something huge, that the economy would bounce back like it always does, boy, were they wrong. The second was that they thought they would be able to come back and do a second stimulus, not realizing that there was no rationality left in the Republican party, they were perfectly willing to let the economy collapse in order for them to get elected and win back majorities in both houses.
Ezra Klein goes into more detail, here's an excerpt:
Ten percent unemployment and a terrible recession ended up discrediting the people trying to do more for the economy, as their previous intervention was deemed a failure. That, in turn, empowered the people attempting to do less for the economy. So rather than a modestly sized stimulus leaving the door open for more stimulus if needed, its modest size was used to discredit the idea of more stimulus when it became needed.
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2 comments:
Hmmm.... Yeah, the critics don't realize how many more jobs could've been lost at banks and car factories and such. Now, that would've been disastrous.
But, isn't the biggest problem the economy is having that most jobs have gone abroad? From IT to manufacturing the jobs keep leaving North America to cheaper markets.
I don't believe that there is a stimulus package that can stop the drainage of jobs going to China, India, The Philippines and other places.
Seriously, it seems that, nowadays, everything from computer programs to pursues is done abroad, and here we're just consuming cheap stuff and making no money.
Having jobs shipped overseas is part of the problem but not the main part. Large economies are very complicated, those for free trade would say that because of all those jobs going overseas Americans have been able to live better because they can buy cheaper products.
I think the balance has gone way too far over to losing jobs really hurting us, though. We were supposed to become a service economy, then they started sending service jobs over to India.
The problem is that ever since Reagan we've been going more and more to an economy that favors the very rich and damages the middle class. We are now reaping the results of the last 30 years of Reagans voodoo economics.
Most don't even realize that we are in desperate shape. Those in charge have done everything they can to destroy the power and scope of government so now we actually have our infrastructure falling down around our ears because no money has been spent on it for 30 years.
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