I have a piece up at The Nation discussing this morning’s job numbers as well as a the entire year of 2011 – a wasted, lost year.
It is also a response to Jonathan Chait’s argument that liberals are unreasonable when it comes to Obama and the economy. The piece covers the range of economic ideas motivating the government this year – from “Win the Future” to the failed Grand Bargains behind the debt-ceiling fight. A sample:
…So the administration spent much of 2011 engaging in the wrong analysis of the economy, one that looked like that of the far right. Early in the year the administration brought in new advisors, notably Bill Daley as chief of staff, in order to repair relationships with business in the wake of financial reform. This incorrectly diagnosed the problem as a liberal government beating up on unappreciated job creators, instead of weak income and mass unemployment among workers. In his 2011 State of the Union, Obama argued that we needed to “win the future” by investing in education and bringing “discretionary spending to the lowest share of our economy since Dwight Eisenhower was president.” Recent college graduates are suffering from high unemployment and there’s no real reason to worry about government debt levels, but you wouldn’t understand that from that speech.
During the debt ceiling showdown this past summer, when the administration was trying to drum up support for long-term deficit reduction, economic advisors like Gene Sperling argued that new confidence in deficit reduction itself would help the economy, ignoring the fact that the markets, with negative real interest rates, were screaming for the government to run a bigger deficit. Meanwhile, President Obama made references to “structural” issues in the labor market, as if the pain of unemployment wasn’t shared broadly across all occupation, industries and types of workers.
Thus the Democrats spent 2011 – which could have been a crucial year for the recovery – in a futile debate with the Republicans over the budget.
Regular readers will note that it formalize a lot of points that have been floating around this blog over the year. There’s also sections on the battles over monetary policy and housing/foreclosure fraud in 2011 – check it out!