Is it really that hard to understand that unproductive public spending lowers productivity?

Is there anyone anywhere who actually believes that the present recovery in the US has anything to do with Obama? Actually there are lots of people just as ignorant as that, amongst whom is Obama himself. I get the same level of irritation when I read how economic “managers” here in Oz wonder why productivity growth is so pathetic and real wages are falling even as they see before their eyes the construction of streetcars in Sydney, trains in Melbourne and the diversion of tens of billions of dollars into preventing a non-heating planet from heating. Anyway, this is Trump v Obama on why the American economy has been rising since Obama left the presidency.

President Trump fired back Monday after former President Barack Obama, in a subtle swipe at the commander in chief, claimed credit for the economic gains in both their terms.

Obama tweeted Monday morning to note the anniversary of his signing the 2009 economic stimulus package.

“Eleven years ago today, near the bottom of the worst recession in generations, I signed the Recovery Act, paving the way for more than a decade of economic growth and the longest streak of job creation in American history,” Obama tweeted, alongside a photo of his signature on the bill.

But, the Trump campaign, in a statement to Fox News, countered that the economy was recovering only because of the actions Trump took to undo his predecessor’s policies.

“President Trump reversed every single failed Obama-era economic policy, and with it, reversed the floundering Obama/Biden economy,” Trump campaign national press secretary Kayleigh McEnany said. “Obama and Biden orchestrated the worst economic recovery in modern history.”

Actually, everyone else did more or less the same as Obama, Australia included, with more or less the same results. Modern macro is about as disastrous as a policy can be, although we may yet see Modern Monetary Theory given a try by one of the socialists now running for President as a Democrat.

This entry was posted in Classical Economics, Economics and economy, Economics on the left. Bookmark the permalink.

22 Responses to Is it really that hard to understand that unproductive public spending lowers productivity?

  1. mh

    This short doco captures the zeitgeist of the last year of Obama’s second term.

    It’s a lefty Guardian journo visiting struggling American workers and seeing what the fuss is about with Trump entering the political scene.

  2. Nob

    The only way from the lowest point of the GFC was up.
    There is no advanced economy that didn’t recover to whatever extent.

    Obama was extremely lucky that the low point happened in the run up to the election.

    Trump is clever characterising it as “worst recovery” – i.e. not denying that a recovery happened but implying that it was inevitable and could have been much much better.

  3. Tom

    Imagine that: America’s only Marxist president, whose main achievement was concealing who he really was in his ascent to the White House, claiming credit for the economic performance of his successor, a businessman who ran for office only to repair the damage done by his predecessor and “make America great again”.

    The legacy of the Obama presidency has now been virtually erased and 2008-2016 will be remembered only as a warning about electing a nation-wrecker to the highest American office.

    Obama’s subversion of the security state to launch a bureaucratic coup against the Trump candidacy and then the Trump presidency and his opening of the US border to allow a human flood from the Third World into America brought the republic to the brink of extinction.

    Obama will probably escape jail, the fate instead of his useful idiots, Comey, Clapper, Brennan, McCabe, Strzok and the rest.

    It will take America decades to recover from the Obama presidency.

  4. A metaphorical “lynchin’ in the town square” of the banking grubs would have done more for economic confidence than anything BO did.

  5. Eyrie

    “A metaphorical “lynchin’ in the town square” of the banking grubs would have done more for economic confidence than anything BO did.”

    A literal one even better.

  6. Mother Lode

    No politician is going to admit that waste lowers productivity until they think the public will applaud it.

    It is against their instincts, their personal interest (they benefit fro being seen to blow money on ‘worthy causes’), and the soup-dish shallow grasp of their advisers.

    So, how do you make the argument to the public?

  7. Mother Lode

    I like how Obama’s signature emphasises ‘BO’.

    I wonder if a hand writing expert has ever looked at what that signature tells us. Not that it is big deal – Obama is what he is, the expert would only be labeling what we already see.

    My take (as a complete amateur) is that the the person with the gigantic initial lettering like that (which he surely does not write with ordinarily) sees it as honouring themselves. It is actually a bit like a grafittist’s tag. The ‘bama’ beginning halfway across the ‘O’ make it look like deliberate styling.

    Like a dog he is pissing on the document to say ‘ME’.

  8. Mother Lode

    One for the economists: I get that governments will increase public spending to fiddle the GDP equation and speak of growth and recovery and all that rot.

    My strong suspicion is that it was a major factor in Obama’s ‘recovery’, and maintaining GDP after that. I saw nothing but strangulation other than that, and explosion in government control and coercion.

    How much was this the case?

  9. iamok

    Nice signature there. Ego on full display and I’m sure analysts would have a field day. Reading it on my computer BO stands out most clearly.

  10. JohnA

    Hmm, sounds like the next stage in the anti-Trump campaign.
    Well, the impeachment attack didn’t work so it’s time to undermine the economic recovery.
    “Recovery” oh, yes the Recovery Act 2009. That was the brilliant strategy of our President, so we could claim that we did all the hard yards, couldn’t we?

  11. Entropy

    My strong suspicion is that it was a major factor in Obama’s ‘recovery’, and maintaining GDP after that. I saw nothing but strangulation other than that, and explosion in government control and coercion

    There was a lot of spending and massive Quantitate Easing, aka printing lotsa money. What that does is mean all that extra money in the system requires more money to buy stuff, as there is not more stuff, at leas tin the short to medium term. Great if you already own assets. Sucks if you are a little guy. The theory is that the asset holders feel all good about themselves and use that extra wealth to buy more stuff. Of course most of them bought holdings in the Bahamas or comparatively unproductive stuff like Teslas. They weren’t building factories.

  12. iamok

    I know plenty who idolise the guy. Their flawed idealogy runs rampant, confirmation bias and a severe lack of analysis at what goes on under the fake news headlines have us on the same slippery slope.

    Down here in Victoriastan Big Ears is running at about 53% approval rating, the opposition is impotent and A Bandit is on the rise (though he will fall quickly I believe).

    If I wrote 1,000 great things our society has done and one bad thing and gave it most people under 30 they would extrapolate the one bad thing as the end of humanity. As. We. Know. It. And gloss over the 1,000 great things.

    They are being brainwashed into their own extinction and no amount of logic or reason can get though their moronic fog.

  13. Iampeter

    Is it really that hard to understand that unproductive public spending lowers productivity?

    About as hard to understand as the self-crippling consequences of tariffs but here we are.

    the American economy has been rising since Obama left the presidency.

    If you believe the arbitrary metrics used then the economy was already rising BEFORE Obama left the presidency.
    But taking credit like Trump is doing is incredibly short sighted. He will now need to also take credit for any bust that occurs on his watch.

    President Trump reversed every single failed Obama-era economic policy, and with it, reversed the floundering Obama/Biden economy

    I’m old enough to remember Fox news being a serious news organization that wouldn’t be afraid to hold republicans to account if needed. Now they’re a mindless state broadcaster making CNN look competent.

    The only thing the Trump admin has done is continued with growth of government spending and regulations. Introduced disastrous left wing policies like Tariffs, which have already destroyed sections of the economy, followed up with record breaking bailouts to the farmers destroyed by the tariffs.

    I thought the Cat was meant to be a right wing blog, not an InfoWars style outlet for politically illiterate leftists of the conservative movement to pretend to be covering topics they don’t really understand whatsoever.

    Or maybe it’s all a parody in which case I applaud the effort!

  14. Mother Lode

    Thanks, Entropy.

    And in your honour I am going to apply to apply for government money to provide Gibbs Free Energy.

    They will doubtless say “We don’t know who this Gibbs guy is, but free energy has to be a vote winner we can sell as fighting climate change!”

    Needless to say you will be receiving a consultant fee, along with Kelvin Enthalpy.

  15. Spurgeon Monkfish III

    I get that governments will increase public spending to fiddle the GDP equation and speak of growth and recovery and all that rot

    Governments can never create wealth, they can only ever destroy it. Mainly through extortionate taxation and hideously wasteful public spending, of which our beloved pollies are now among the world’s best.

    See also Einstein’s definition of insanity.

  16. Mother Lode

    Governments can never create wealth

    Indeed, they have long since passed the point where they contributed to wealth creation in the form of maintaining the courts, police and defence forces and have taken to trying to run board rooms, all funded by money taken permanently out of the cycle of wealth creation.

    And now the Defence forces have been neutred and turned into a political organisation, the police prey on citizens for the slightest infraction of ridiculous and labyrinthine laws, and the judges have taken to punishing people for obeying the laws that exist instead of the ones they think should exist, so the meagre contribution they are supposed to make they are now withdrawing even that.

    Punks.

  17. H B Bear

    Black holes of public health and education.

    Might as well burn $50 notes.

  18. max

    the present recovery is based on central bank fiat money and debt

  19. duncanm

    Barry ‘you didn’t build that’.

  20. PeteD

    You’d think a self-proclaimed small government type would be quick to credit the 2017 tax cuts, a textbook centre right policy of the current US administration, which along with EPA regulation cuts seem to have lit a fire under the US economy.

    But no. Just a whinge about tarrifs.

  21. Elderly White Man From Skipton

    President Donald Trump on Thursday pardoned former New York City Police Commissioner Bernard Kerik (guilty of failing to pay his taxes and lying to White House officials) and financier Michael Milken (guilty of securities fraud). He also commuted the sentence of former Illinois Governor Rod Blagojevich (guilty of federal corruption).

  22. Iampeter

    President Donald Trump on Thursday pardoned former New York City Police Commissioner Bernard Kerik (guilty of failing to pay his taxes and lying to White House officials) and financier Michael Milken (guilty of securities fraud). He also commuted the sentence of former Illinois Governor Rod Blagojevich (guilty of federal corruption).

    More perfect and flawless moves.
    Draining that swamp.

Comments are closed.