Archive for June 3rd, 2012

I’m sorry, I didn’t know Keynesianism had a “whites only” sign on the door.

Jun 03, 2012 in Politics

How do Republican presidents get out of recessions? By growing the government, of course.

“After there was a recession under Ronald Reagan, government employment went way up. It went up after the recessions under the first George Bush and the second George Bush,” Obama said last month on the campaign trail. “So each time there was a recession with a Republican president, compensated — we compensated by making sure that government didn’t see a drastic reduction in employment. The only time government employment has gone down during a recession has been under me.”

More broadly, federal spending growth under Obama has been remarkably low by historical standards. The pressure from the GOP and D.C. political elites, who have been hostile to Keynesian economics in recent years, has put the administration in a tough spot.

The Keynesian theory holds that government spending is necessary help lift the economy when it’s under-performing. Data shows that Republicans tend to accept it when they’re in power and that they benefit from it. But they’ve relentlessly attacked Obama’s efforts to stimulate the economy in the wake of the Great Recession, and have led the charge against financially helping cash-strapped states avert layoffs of public employees like teachers and police.

And Mitt Romney has already danced out of the likelihood that he would have the balls to go full-tilt with the disastrously fraudulent Paul Ryan plan. Of course, when a Republican Congress puts it on his desk, he’ll sign it, and then when things go south it’ll be Obama’s fault via some convoluted horseshit logic. Who knows? By then Republicans will probably be saying the stimulus was too small.

We’ve seen private jobs grow at a pretty good rate since Obama became president. The main drag on employment right now is the Teapublican Austerity Disaster: the absolute refusal to allow Obama any significant action on the economy coupled with the slashing of public jobs. Fewer and fewer people are able to spend (lower demand) and the “job creators” have no incentive to increase supply. Would you build a new factory if you still had inventory?

The more Republicans get to wage war on the middle class in favor of the ultra-wealthy, the weaker our economy will become. The less we notice how far the goalposts have moved since Reagan, the more they get away with.

-hw