Turns out the Obama administration and his economic advisers did better than any European nation in their anti-recession efforts (graph).
The unemployment rate in the United States has been steadily falling, while the unemployment rate in the euro zone has climbed to its highest level since the currency was introduced more than a decade ago. There is still some double-dip talk in the United States, but in many European countries it is a reality.
In the United States, the Institute for Supply Management said this week that its survey of manufacturers showed continued improvement. As a group, companies say that overall business is better and that new orders are doing very well. They say they expect to continue adding workers. In the euro zone, a similar purchasing managers survey indicated that conditions were deteriorating. ...NYT
Key points -- according to financial reporter, Floyd Norris, writing in the Times: the bank bailouts helped, unpopular though they were, and even the bailouts of Fannie and Freddie contributed to the improvement, in spite of what the right would like to think.
... There are politicians proclaiming that those two government-sponsored enterprises were the sole cause of the financial crisis. They were not, of course. Most of the really bad loans were made by privately financed lenders who believed they had little reason to care if the loans were good, since they planned to sell them immediately to investors. ...NYT
Raising the amount of capital banks are now required to hold has also been a good, if unpopular move. And the Federal Reserve's efforts to maintain liquidity paid off. "As of now," Norris writes, "there can be little doubt that the American government handled the problems of the last year far better than did its European counterparts."
Which is not to say that our socioeconomic situation is anything to boast about. And the way some still talk about our economy is, well, sick.
The takeover of half our political spectrum by the 0.01 percent is, I’d argue, also responsible for the degradation of our economic discourse, which has made any sensible discussion of what we should be doing impossible.
Disputes in economics used to be bounded by a shared understanding of the evidence, creating a broad range of agreement about economic policy. To take the most prominent example, Milton Friedman may have opposed fiscal activism, but he very much supported monetary activism to fight deep economic slumps, to an extent that would have put him well to the left of center in many current debates.
Now, however, the Republican Party is dominated by doctrines formerly on the political fringe. Friedman called for monetary flexibility; today, much of the G.O.P. is fanatically devoted to the gold standard. N. Gregory Mankiw of Harvard University, a Romney economic adviser, once dismissed those claiming that tax cuts pay for themselves as “charlatans and cranks”; today, that notion is very close to being official Republican doctrine.
As it happens, these doctrines have overwhelmingly failed in practice. ...
... The key to economic recovery lies in finding a way to get past that minority’s malign influence. ...Paul Krugman