There are some lies, known as zombies, that just cannot be put to rest. One of the biggest lies is that President Obama is a big spender who put the economy in peril because of a Keynesian approach.
This is false, but this lie is being kept alive by the mainstream media, especially by what Paul Krugman calls Very Serious People. These are people whose opinions are taken seriously, even though they are frequently wrong.
(more below the fold)
One of the worst examples of a Very Serious Person who doesn't know what he is talking about is Charles Krauthammer:
Obama faces two massive problems — jobs and debt. They’re both the result of his spectacularly failed Keynesian gamble: massive spending that left us a stagnant economy with high and chronic unemployment — and a staggering debt burden.
The first sentence is correct, though jobs is by far the biggest problem. But the second sentence is sheer...what...idiocy, incompetence or outright lying?
First of all, there WAS NO MASSIVE Keynesian gamble. This is from Paul Krugman, someone who actually has economic credentials (unlike Mr. Krauthammer):
Excuse No. 4: We tried to stimulate the economy, and it didn’t work.
Everybody knows that President Obama tried to stimulate the economy with a huge increase in government spending, and that it didn’t work. But what everyone knows is wrong.
Think about it: Where are the big public works projects? Where are the armies of government workers? There are actually half a million fewer government employees now than there were when Mr. Obama took office.
So what happened to the stimulus? Much of it consisted of tax cuts, not spending. Most of the rest consisted either of aid to distressed families or aid to hard-pressed state and local governments. [...]
So let’s summarize: The economy isn’t fixing itself. Nor are there real obstacles to government action: both the bond vigilantes and structural unemployment exist only in the imaginations of pundits. And if stimulus seems to have failed, it’s because it was never actually tried.
Listening to what supposedly serious people say about the economy, you’d think the problem was “no, we can’t.” But the reality is “no, we won’t.” And every pundit who reinforces that destructive passivity is part of the problem.
And no, President Obama isn't a big spender either (via another Krugman article) :
So what’s the truth? I’ve written about this before, but here’s another take.
The fact is that federal spending rose from 19.6% of GDP in fiscal 2007 to 23.8% of GDP in fiscal 2010. So isn’t that a huge spending spree? Well, no.
First of all, the size of a ratio depends on the denominator as well as the numerator. GDP has fallen sharply relative to the economy’s potential; here’s the ratio of real GDP to the CBO’s estimate of potential GDP:
[...]
A 6 percent fall in GDP relative to trend, all by itself, would have raised the ratio of spending to GDP from 19.6 to 20.8, or about 30 percent of the actual rise.
That still leaves a rise in spending; but most of that is safety-net programs, which spend more in hard times because more people are in distress.
Krugman goes on to say that this spending was more about "maintaining (local) government, not expanding it."
But the worst of Mr. Krauthammer's dribble is saying that the jobs/debt crisis is THE RESULT of Mr. Obama's policies.
That is just outright false.
Here is why: via Politifact
deficits: much of the deficits that are in place were inherited from the Bush administration:
Speaking at a retreat for House Republicans in Baltimore on Jan. 29, 2010, Obama was particularly critical of a question from Rep. Jeb Hensarling of Texas. Hensarling asked Obama, "You are soon to submit a new budget, Mr. President. Will that new budget, like your old budget, triple the national debt and continue to take us down the path of increasing the cost of government to almost 25 percent of our economy?"
"The fact of the matter is," Obama replied, "is that when we came into office, the deficit was $1.3 trillion -- $1.3 trillion. So when you say that suddenly I've got a monthly deficit that's higher than the annual deficit left by Republicans, that's factually just not true, and you know it's not true. And what is true is that we came in already with a $1.3 trillion deficit before I had passed any law. What is true is, we came in with $8 trillion worth of debt over the next decade."
We checked Hensarling's claim in a separate item. Here, we'll look at Obama's claim that he came into office with a $1.3 trillion deficit and $8 trillion worth of debt over the next decade. [...]
Economists we spoke with -- Josh Gordon, policy director for the Concord Coalition, and Brian Riedl, lead budget analyst of the conservative Heritage Foundation -- both said they believe the White House approach is more realistic because it assumes current policy will continue.
So the CBO's estimate is $5 trillion lower than the White House numbers, though economists don't quibble with the White House methodology. It does highlight, however, that when it comes to budget projections, people can have differences of opinion about what to include. In any budget projection there is room for interpretation, but it seems reasonable to assume for a baseline that the Bush tax cuts will continue. Obama's numbers are fairly solid, so we rate his statement Mostly True.
Then if you want to look at the debt:
So President Obama created this problem? What about jobs?
Yes, job growth is, at this time, too slow to drive down unemployment; we need about 200K jobs a month to keep up with new job seekers. But look at it before President Obama had time to enact policies.
President Obama CAUSED this job crisis???
A commenter on Nate Silver's blog said it best:
I read Krauthammer's article earlier today. At first, I thought you were being sarcastic with that final note but I had to read both articles again to get the subtext.
Saying that a "spectacularly failed Keynesian gamble" explains the crisis is like a murderer framing a paramedic. Republicans seem to have gone even further - they're trying to destroy the corpse to rule out any post mortem. Krauthammer seems to be saying that their "golden opportunity" lies in sitting back and watching a downgrade wreak havoc on the economy.
Maybe they're bitter Obama had a well timed financial collapse during the last election.