New piece at Politico: Obama’s stimulus delayed recovery
Treasury Secretary Timothy Geithner keeps resorting to a familiar excuse for the slow recovery — the financial crisis. “Recoveries that follow financial crises are slower and more protracted, as Carmen Reinhart and Ken Rogoff have famously written. They are slower,” he told the Economic Club of New York last month.
It is an argument President Barack Obama has relied on repeatedly during his presidency. For example, in April 2011, Obama lamented: “[The economy] is not growing quite as fast as we would like, because after a financial crisis, typically there’s a bigger drag on the economy for a longer period of time.”
Thirty-three months since the “recovery” started in June 2009, the unemployment rate has yet to fall below 8.3 percent, far exceeding the previous post-World War II record of 13 months. Worse, most of the drop in recent months has occurred because people have given up looking for work and are thus no longer classified as unemployed. Today, there are 12.8 million unemployed and 43 percent have been out of a job for more than six months, almost twice as high as Americans have ever faced in the past.
But “financial crises” aren’t a valid explanation for the slow recovery.Unemployment actually recovered faster in countries hit by a “financial crisis” than in those that were in a recession for other reasons. . . .