Apparently, I didn’t explain things in a way so Jeff Rosenberg could understand them. I’ll type slower this time in an attempt to help walk him through the Bush policies and the failure of the Obama stimulus. First, here’s Mr. Rosenberg’s snarky, yet amateurish comments about my post:

That damn Barack Obama! Things were great until he came along and ruined things! As you may recall, Michele Bachmann made a similar claim earlier this year. It seems it took months for her long-discredited talking points to make their way down to Gross.

First, here are the annual unemployment rates of the Bush administration:

Unemployment by year:
2001 — 4.7
2002 — 5.8
2003 — 6.0
2004 — 5.5
2005 — 5.1
2006 — 4.6
2007 — 4.6
2008 — 5.8

The annual unemployment rate for 2009 was 9.3%. The unemployment rate for 2010 was 9.6%.

I’ll explain this clearly so Mr. Rosenberg can understand my point. The event of the credit crisis must be seperated from the Bush administration policies. It’s important to not that the Bush administration’s policies were passed in budgets, though his tax cuts were passed through reconcilliation.

The credit crisis wasn’t caused by Bush administration policies. It happened during his administration but it wasn’t his policies that caused the collapse.

The poliicies that led to that collapse were in place for over a decade. Subprime mortgages, borrowing 125% of a home’s inflated value and mortgage-backed securities weren’t the result of the Bush administration’s policies.

Now that we’ve cleared that up, it’s important to note that huge job losses did happen as a result of the crisis. By the time the Obama stimulus went into effect, the huge monthly job losses were coming to an end:

2008:

October: 554,000
November: 728,000
December: 673,000

2009
January: 779,000
February: 726,000
March: 753,000
April: 528,000

If Mr. Rosenberg wants to claim that the stimulus was responsible for stemming the job losses, that’s his right. It just isn’t based in reality. In fact, let’s look at the job losses of the next few months:

May: 387,000
June: 515,000
July: 346,000

Statistics aside, the reality is that the stimulus postponed, to put it gently, a real recovery. Cash for Clunkers didn’t increase car sales. It just shifted the purchase date. The minute the money ran out, the sales dropped precipitously.

This year, we found out from President Obama himself that there weren’t as many shovel-ready jobs as he initially talked about during Recovery Summer:

Job creation and economic growth have been minimal at best during this administration. President Obama is now forced to argue that ‘it would’ve been worse if not for my stimulus’, an uphill fight if ever there was one.

Besides being the wrong question, there’s the ability to prove his claims with anything other than assertions. Let’s stamp a big We don’t know that on that argument. In fact, it isn’t just unknown; it’s unknowable.

The right question, in fact, is whether a different package would’ve strengthened the economy and fixed our problems. Again, that’s unknowable but there’s at least a possibility that it would’ve been.

What is known is that businesses don’t incur the costs of Obamacare, most notably the tax increases, if they don’t hire people. Likewise, regulatory compliance costs don’t exist if new employees aren’t hired.

That’s why capital is on strike. Executive after executive, study after study, show that Obamacare is a major reason why entrepreneurs aren’t putting their companies’ capital at risk. Their capital will remain on strike until President Obama’s either changes his policies or a new president is elected and changes President Obama’s policies.

I sincerely hope Mr. Rosenberg understands this explanation. Nonetheless, I’m not holding my breath that it’ll sink in.

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2 Responses to “Setting Jeff Rosenberg straight”

  • You’re somehow presenting unemployment numbers while simultaneously ignoring them. They say the exact opposite of what you say they do.

    You wrote “By the time the Obama stimulus went into effect, the huge monthly job losses were coming to an end.” But the first significant decrease in job losses came two months after the stimulus passed.

    Sure, you can argue that it was just a coincidence. But it seems like an incredible coincidence that unemployment just so happened to turn around about a two months after the stimulus went into effect.

    As to your other arguments, the problem with our economy isn’t “capital on strike.” Supply-side economics has always been based on magical thinking. What’s killing our economy is a lack of consumer demand — yet the right continues to insist that the middle-class and the poor must sacrifice to pad the pockets of the wealthy.

  • Gary Gross says:

    It can’t be argued that the stimulus was the reason for decreasing the job losses. It’s substantially easier to make the case that TARP played the major role in stabilizing the economy. I’d argue that 6 months is time enough for TARP to work.

    Considering the fact that there weren’t many shovel-ready jobs at the time, it isn’t likely that the stimulus would have an effect, albeit a temporary positive effect, until a year later.

    If that’s your definition of the stimulus working, then you’re on the opposite side of that issue than the public.

    Then again, that’s why Democrats will suffer another national thrashing this cycle.

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