Thursday, June 20, 2013

The Pied Piper of Doom: "I only mentioned a double dip once." BWAHAHAHAHAHA!!!

. - by New Deal democrat

Over at the Great orange Satan, there is presently a little kerfluffle over who or what should get credit for the recovery. I think most people who also read this blog as well won't be surprised that I think the truth is more multifaceted and nuanced.

New Deal and Great Society programs like Social Security, food stamps, unemployment insurance, and disability did not prevent the great recession, and they didn't cause the recovery. On the other hand, they acted as stabilizers, to some extent cushioning the impact of the Hard Times.

Further, it is widely accepted that the 2009 stimulus did have a positive multiplier effect. It certainly helped, but many believe it should have been larger, and some points were poorly designed -- "rim shots" as Atrios called them -- but did help. Tax cuts may not have been the best approach, for example, but spending by the 75th to 95th percentile is where the biggest boost was to be found.

UPDATE: The biggest kudos, though, should probably go to Ben Bernanke. The Fed's quantitative easing program brought long term interest rates down enough and long enough for millions of homeowners to refinance at lower mortgage rates, freeing up money for spending on other items and paying down other debts.

The rest I'll leave to the partisan activists, but I can't let pass without heaping well deserved derision on the Pied Piper of Doom's claim that he only brought up the possibility of a double dip recession once, reporting neutrally on and certainly not embracing or touting ECRI's recession call in September 2011.

Oh, puh-LEEEZE. A cursory google search finds the PPoD heralding the imminent arrival of a double dip recession in August 2009, in January 2010, in July 2010, in August 2010, and as recently as April of last year. That last one is a real gem, because it includes a comment saying:

Which is recommended by the PPoD along with a note that there is no housing recovery -- right at the moment that YoY house prices turned positive and haven't looked back since.