Op-ed at RealClearMarkets: Austerity Works: It's Time to Give It a Try

This piece is with my son Sherwin. The graphs are pretty powerful. The piece starts this way:

Austerity or growth, is that the choice facing Americans and others around the world?

The debate never seems to abate. European Union finance ministers last week gave Spain permission to delay cutting some government spending and reducing its deficit, though many such as The Economist magazine fear that even the cuts that will be made go too far. A similar decision may soon have to be made for Greece. Even though the pro-bailout parties won the June Parliamentary election, they too are asking for a two-year delay in cutting spending and reducing their budget deficit.

The Obama administration has put increasing pressure on German Chancellor Angela Merkel to ease up on Germany's austerity prescription. President Obama continually touts more government spending as the cure, and derided Republican "let's cut more" spending strategy as the cause of Europe's economic problems.

Last month, German Finance Minister Wolfgang Schäuble was having none of it, telling Obama to fix the U.S. deficit before giving Europe advice: "Herr Obama should above all deal with the reduction of the American deficit. That is higher than that in the euro zone." . . .

Newest Fox News Op-ed: Two mistakes in Obama's press conference last week

My newest Fox News piece starts this way:

“The private sector is doing fine. Where we're seeing weaknesses in our economy have to do with state and local government,” President Obama claimed on Friday. His solution to fix the public sector was more government spending.
When people started screaming, Obama clarified his remarks and said “It’s absolutely clear economy is not doing fine,” but he just couldn’t bring himself to disown his statement about the private sector generally doing “fine.” His clarification still asserted that there is “good momentum in the private sector.” But private sector employment growth has fallen in each of the last four months, reaching a pitiful 82,000 in May.
President Obama is also wrong about his other claim that state and local governments are doing poorly relative to the private sector. . . .

New piece at Politico: Obama’s stimulus delayed recovery

Politico didn't publish the graphs that I gave them and they were the most powerful part of the whole piece, but in any case, this is how my op-ed with Grover Norquist starts:

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. . . .

New Fox News piece: Where did stimulus money really go?

My newest piece starts this way:

When President Obama signed his economic stimulus plan into law on February 17, 2009, he promised it “includes help for those hardest hit by our economic crisis,” and “As a whole, this plan will help poor and working Americans.”

But the newest data on how the stimulus money was given out across the 50 states and the District of Columbia shows a perverse pattern: The states hardest hit by the recession received the least money. States with higher bankruptcy, foreclosure, and unemployment rates got less money. And lower-income states also received less.

Rather than helping out those in the toughest shape, it looks like Democrats ended up helping their supporters, including unions and many very wealthy supporters.

According to the Obama administration’s Recovery.gov, a total of $504 billion of federal contracts, grants, and loans to states and territories were awarded between February 17, 2009, and December 31, 2011. The amounts vary a lot across states, with the very lowest at $978 per capita in Virginia and the highest at $2,495 per capita in Alaska. The District of Columbia is the real winner at a whopping $7,603.

The transfers to the states having the least economic problems were large. The following relationships were statistically significant: . . .

Newest Fox News piece: Has Your Job Been 'Saved'?

My newest piece starts this way:

During Obama's first two years in office, he passed five stimulus/jobs bills. If you add up the promises, he boldly promised something well over 5.5 million jobs "created or saved." But reality turned out very differently: there are now 2 million fewer people working than when the first Stimulus passed. On top of that, the number of jobs should have increased as the country’s population has grown by almost 5 million. Population growth by itself should have generated more than 3 million new jobs. 

President Obama claims that instead of our economy being short of over 5 million jobs, things would have been even worse without his policies. We would have lost 10.5 million jobs without all his spending. No matter how bad the job numbers get, Obama points to some hypothetical economic meltdown that was avoided by his policies. Thus, no evidence whatsoever, no matter how bad, can be used against him. 

With all the different “Stimulus” and “jobs” programs, it is hard to remember all the promises and to keep track of where all the money has gone. . . .

Newest New York Post piece: Canada's cold proof: Job growth without 'stimulus'

My piece at the New York Post starts this way:

President Obama insists that our sluggish recovery would've been even worse without his $830 billion "stimulus." Last Friday, the White House released a report purportedly showing that passage of the "stimulus" created up to 3.6 million jobs (even though the economy actually lost 1.8 million jobs since then).

But if Obama's program -- including a 28 percent hike in spending since 2008 and more than $4 trillion in deficits -- worked so well, why has our unemployment rate risen more since those policies were adopted than have the rates of the European Union, South America, Japan, Australia or New Zealand?

Just look north: The recession hit Canada hard. Because its economy and ours are connected, our unemployment rates moved similarly from July 2008 until the "stimulus" passed; both countries' rates were 6.1 percent in August 2008 and rose in lockstep through February 2009, to around 8 percent. . . .

Obama's top campaign adviser says that unemployment won't be very important in the 2012 election.

“The average American does not view the economy through the prism of GDP or unemployment rates or even monthly jobs numbers,” Plouffe said, according to Bloomberg. “People won’t vote based on the unemployment rate, they’re going to vote based on: ‘How do I feel about my own situation? Do I believe the president makes decisions based on me and my family?’ ” . . .

Obama's Press Secretary, Jay Carney, expanded on this point:

JAKE TAPPER, ABC NEWS: "Lastly, comments by Senior Adviser David Plouffe were criticized today. Earlier this week, he said, quote, “The average American does not view the economy through the prism of GDP or unemployment rates or even monthly jobs numbers. People won’t vote based on the unemployment rate, they’re going to vote based on how do I feel about my own situation: Do I believe the president makes decisions based on me and my family?”
And Republican front runner Mitt Romney said that those comments were — he suggested they were out of touch, and he said that if Plouffe worked for him, he would fire him."

JAY CARNEY: "Well, I understand that we’re engaged in the – or rather, the Republicans are engaged in a primary campaign, trying to get some media attention. I don’t know where, you know, the voters that some other folks might be talking to — but — or — but most people do not sit around their kitchen table and analyze GDP and unemployment numbers. They talk about how they feel their own economic situation is. And they measure it by whether they have a job, whether they have job security; whether their house – whether they’re meeting their house payment, whether their mortgage is underwater; whether they have the money to pay for their children’s education or they don’t; whether they’re dealing with a sick parent and can afford that, or whether they can’t.
They do not sit around analyzing The Wall Street Journal or other — or Bloomberg to look at the — you know, analyze the numbers. Now, maybe some folks do, but not most Americans. I think that’s the point David Plouffe was making; that’s the point the president was making just moments ago in his statement in the Rose Garden."

A copy of Obama's remarks from today is available here. Can't Obama say something new once and a while? Meanwhile the Obama administration has "new talking points" and is blaming Congress for the slow recovery.

"This jobs report and the last one should be calls to action, let's stop with the bickering, let's do at least those things we can agree on," White House economic adviser Austan Goolsbee said on MSNBC.

When President Obama appeared in the Rose Garden Friday to address the latest jobs report, he was a little more circumspect and lighter on the blame.

To get serious on jobs, Obama said Congress should create an infrastructure bank, pass three trade agreements, pass patent reform and extend the payroll tax cut.

"I urge Congress not to wait," Obama said.

Goolsbee, sounding way more exasperated, echoed the same points on cable later but took it further, blaming "bickering" by "folks in Washington."

"My point is, if we get numbers like the ones we've seen, which reiterate how important it's going to be that we get the growth rate back up to what it was for the previous 15 months so we can add millions of jobs, we need to stop with the bickering," he said. . . .

Just take the trade agreements. Obama could get these passed by just forwarding them to Congress, but OBAMA HASN'T FORWARDED them. He wants to have a side piece of legislation that would give money to those who might lose their jobs from foreign competition. But Obama failed to mention his role in not getting this passed.

What will the new GDP numbers show this week?

The gross domestic product estimate for the first quarter of 2011 is due Thursday. For the first six quarters after the recovery under Obama, GDP growth has averaged about 2.95 percent. Under Reagan, given what was probably at least as bad of a recession, GDP growth averaged 6.63 percent, more than twice as much. Already the poor growth numbers expected to be released on Thursday are being explained away by high oil prices. With prices reaching $3.896 per gallon on April 20th, they are indeed quite high. But this is akin to leaving out oil and food price increases in measuring inflation. Obama blames speculators for the high prices, while Obama should look at government for responsibility.

Newest Fox News piece: The Stimulus, Not Oil Prices, Is Hammering Consumers

My newest piece at Fox News starts this way:

U.S. crude oil prices soared by 8.5 percent Tuesday, stunning financial markets. The financial media fretted that the oil price shock from the Middle East turmoil would slow or stop the fragile economic recovery. Crude oil prices soared even though gas prices at the pump are already the highest in any February since 1990. The reaction was swift, with the Dow Jones Industrial Average falling more than 178 points (1.4 percent) and NASDAQ and S&P 500 both also falling by more than 2 percent. This morning, with Libya teetering on the brink of civil war, gas prices continued rising.
While the media clearly and instantly understands the detrimental impact that higher oil prices have on the economy, the impact is really no different than President Obama's stimulus or his deluge of new government regulations, from the EPA to health care to financial markets.
The logic for how higher oil prices will harm economic growth is pretty simple. . . .

Discussing the Obama Administration’s effort to create jobs in the United States

New Fox News piece: Americans very gloomy about the economy

My new piece starts off this way:

All the economic numbers being thrown around as the year draws to a close are bewildering. Some are positive, some are negative, but for many this week it is hard to get an overall feel for how well the economy is doing.
On the upside, GDP is rising, though slowly, and economists have raised their forecasts for next year's economic growth. Retail sales this holiday season increased by 5.5 percent over last year. Inflation has remained low, just 1.1 percent over the last year. And the stock market has rebounded.
Yet, there are major negatives. Most seriously, the very high and long-lingering unemployment rate. Unemployment is not only rising, but it has set a post-World War II record with unemployment remaining at least at 9.5 percent or higher for 18 months.
Adding to job-seekers' problems, the new employment consists almost exclusively of temporary service sector jobs, a poor replacement for the lost permanent ones. Home prices also fell again last month. Yale Professor Robert Shiller who collects these data, warned on Tuesday: The outlook has become steadily more pessimistic over the last few months." Huge deficits at the federal and state level add to long-run concerns.
So what do all these numbers mean for the average American? New Consumer Confidence numbers were released on Tuesday and they aren't encouraging, . . .

Economists say that the Stimulus didn't help economy

It is disappointing that only 73 percent of National Association for Business Economics respondents had no impact of the recovery. I wish that some more of them had said that it had harmed the recovery.

The [National Association for Business Economics] April 2010 Industry Survey report presents the responses of 68 NABE members to a survey conducted between March 25, 2010, and April 10, 2010, on business conditions in their firm or industry and reflects first-quarter 2010 results and the near-term outlook. . . . The vast majority (73%) of respondents reported the fiscal stimulus enacted in February 2009 has had no impact on employment to date. While 68% also believe a jobs bill, such as the one recently enacted into law, will have no impact on payrolls, 30% do believe it will boost payrolls moderately.