The Other McCain

"One should either write ruthlessly what one believes to be the truth, or else shut up." — Arthur Koestler

Ezra Klein Admits: ‘It Won’t Work’

Posted on | July 16, 2010 | 104 Comments

“Notice that adding new jobs at a rate of 200,000 a month would take us 150 months — or 12.5 years — to get back to normalcy. So far, only April has seen more than 200,000 in non-census jobs growth — and even then, just barely.”
— Ezra Klein, July 16, 2010

Hmmm. Dow Jones Industrial Average down?  What could possibly explain this?

Stocks slumped Friday after earnings reports from two big banks disappointed investors and a survey showed that consumers are becoming more pessimistic. . . .
“It’s mostly about the poor consumer confidence numbers,” said Anthony Conroy, managing director and head trader for BNY ConvergEx Group. “The possibility of a double dip also starts to come to mind” for investors, he said, referring to a phrase that describes the economy falling back into recession.

Wow, who could have anticipated a double-dip recession? How could anyone have foreseen the failure of Obamanomics?

“The unfortunate truth, as sober economists freely admit, is that there is no easy cure for the financial mess caused by the collapse of the housing bubble. . . . Whatever policy Washington pursues, a quick and painless recovery is not going to happen, and the only real question is whether Democrats will delay recovery by implementing liberal policies that make a very bad situation even worse.”
— Robert Stacy McCain, Dec. 8, 2008

“No amount of presidential persuasion, nor any conceivable quantity of federal spending, can repeal the basic economic law of supply and demand. Thus, if Congress should enact this idiotic ‘stimulus’ — a neo-Keynesian pump-priming venture absurdly overbalanced to the demand side of the equation — nothing is more predictable than its failure to spur real recovery.”
— Robert Stacy McCain, Feb. 9, 2009

“Psychobabble about the ‘mood’ of consumers can’t fix the inescapable reality of the capital shortage, a shortage that will only be worsened by the deficit-driven flood of new government debt into the bond market. . . . As if Keynesian theory had not been completely discredited by the ‘stagflation’ crisis of the 1970s, just wait and see what happens now, as unprecedented government deficits siphon already scarce capital supplies away from private-sector investment.”
— Robert Stacy McCain, May 4, 2009

The problem with waiting for vindication in this regard: If liberals were capable of admitting they’re wrong about economics, they wouldn’t be liberals, would they?

UPDATE: Even the Federal Reserve admits it won’t work:

The euro rocketed to a two-month high of $1.29 and sterling jumped two cents to almost $1.54 after the Fed confessed that the US economy may not recover for five or six years. . . .
The Fed minutes warned of “significant downside risks” and a possible slide into deflation, an admission that zero interest rates, $1.75 trillion of [quantitative easing], and a fiscal deficit above 10 [percent] of GDP have so far failed to lift the economy out of a structural slump.

In other words, all those trillions of dollars of neo-Keynesian fiscal stimulus and monetary interventions have accomplished nothing, in terms of real economic growth.

“Aggregate demand! Aggregate demand!”

Idiots.

UPDATE II: A belated welcome to Instapundit readers. You can tell I’m busy off-blog when it takes me two hours to notice a ‘Lanche.

Category: Economics

Comments

104 Responses to “Ezra Klein Admits: ‘It Won’t Work’”

  1. Marty
    July 16th, 2010 @ 5:52 pm

    The left’s embrace of Keynes was never about the economics, which they haven’t the knowledge, intelligence, or willingness to make the effort to understand. All they care about is that an over-simple reading of his General Theory justifies what they want to do, anyway, which is grow the government.

    You can’t use logic and facts to argue someone out of a position they didn’t use logic and facts to get into.

    that’s why the libs never learn.

  2. templar knight
    July 16th, 2010 @ 5:52 pm

    Now..now..give it a chance, folks. It hasn’t quite been long enough to tell whether the plan will work, and I’m with the President on this one. A few more trillion is sure to set everything in order, and now that He’s stopped that silly blowout in the Gulf, He will have time to call the Fed and order some more money printing….uh…quantitative easing…yeah, that’s it. Now what were yall saying?

  3. theBuckWheat
    July 16th, 2010 @ 9:54 pm

    The present monetary and fiscal strategy is right out of the ending of Thelma and Louise: smile and laugh while driving all of us over a cliff.

  4. theBuckWheat
    July 16th, 2010 @ 5:54 pm

    The present monetary and fiscal strategy is right out of the ending of Thelma and Louise: smile and laugh while driving all of us over a cliff.

  5. DensityDuck
    July 16th, 2010 @ 10:02 pm

    The problem with this sort of thing is that it would be so wonderful if it *did* work that people just can’t help but want to try it.

    And people seem to invariably follow this reasoning process:

    1) Those other guys tried it and it didn’t work, but
    2) I’m smarter than those guys, so
    3) When *I* try, it *will* work.

  6. DensityDuck
    July 16th, 2010 @ 6:02 pm

    The problem with this sort of thing is that it would be so wonderful if it *did* work that people just can’t help but want to try it.

    And people seem to invariably follow this reasoning process:

    1) Those other guys tried it and it didn’t work, but
    2) I’m smarter than those guys, so
    3) When *I* try, it *will* work.

  7. Bill Peschel
    July 16th, 2010 @ 10:03 pm

    Boy, I thought Dave Kansas was going to have to wait a few months before eating crow.

    The Wall Street Journal: “Why the Doomsayers are Wrong”:

    http://online.wsj.com/article/SB127880219326915593.html

  8. Bill Peschel
    July 16th, 2010 @ 6:03 pm

    Boy, I thought Dave Kansas was going to have to wait a few months before eating crow.

    The Wall Street Journal: “Why the Doomsayers are Wrong”:

    http://online.wsj.com/article/SB127880219326915593.html

  9. Jim,MtnViewCA,USA
    July 16th, 2010 @ 10:09 pm

    I believe the standard figure is that you need new job creation of about 300K to keep even. Over 300K, you start to reduce the u/e rate.

  10. Jim,MtnViewCA,USA
    July 16th, 2010 @ 6:09 pm

    I believe the standard figure is that you need new job creation of about 300K to keep even. Over 300K, you start to reduce the u/e rate.

  11. Fresh Air
    July 16th, 2010 @ 10:11 pm

    RSM–

    But it’s just frustrating that, 30 years after the Keynesian debacle, these idiots still can’t seem to recognize the glaring flaw in their theory:

    They recognize the flaw alright; they simply deny its existence. This is mental contortion of every liberal/progressive alive: They reify fantasies that then become, through a sort of secular transubstantiation, reality.

    There are mountains of evidence now of the Soviet Gulags. But who on the left except for Anne Applebaum even cares? Zero was and is a complete non-entity and a nitwit, a Chauncey Gardner-like figure on the world stage. But to the absorbed lefty a revisitation of Christ or something.

    Leftism is a brain disease. It can be cured, but first the suffer must be aware of its existence in order to fight it.

  12. flataffect
    July 16th, 2010 @ 10:11 pm

    If I had been wrong as repeatedly as these people have, I’d quit predicting for fear of being charged with fraud.

    Of course, this being basically a repeat of the Carter administration, you can count on stagflation as the Dems allow the Bush tax cuts to expire. Just what you want to spur a sluggish economy, tax increases.

  13. Fresh Air
    July 16th, 2010 @ 6:11 pm

    RSM–

    But it’s just frustrating that, 30 years after the Keynesian debacle, these idiots still can’t seem to recognize the glaring flaw in their theory:

    They recognize the flaw alright; they simply deny its existence. This is mental contortion of every liberal/progressive alive: They reify fantasies that then become, through a sort of secular transubstantiation, reality.

    There are mountains of evidence now of the Soviet Gulags. But who on the left except for Anne Applebaum even cares? Zero was and is a complete non-entity and a nitwit, a Chauncey Gardner-like figure on the world stage. But to the absorbed lefty a revisitation of Christ or something.

    Leftism is a brain disease. It can be cured, but first the suffer must be aware of its existence in order to fight it.

  14. flataffect
    July 16th, 2010 @ 6:11 pm

    If I had been wrong as repeatedly as these people have, I’d quit predicting for fear of being charged with fraud.

    Of course, this being basically a repeat of the Carter administration, you can count on stagflation as the Dems allow the Bush tax cuts to expire. Just what you want to spur a sluggish economy, tax increases.

  15. Fresh Air
    July 16th, 2010 @ 10:13 pm

    P.S. Did you just a receive a visit for the esteemed Charles Johnson? Must have gotten his prescription refilled.

  16. Fresh Air
    July 16th, 2010 @ 6:13 pm

    P.S. Did you just a receive a visit for the esteemed Charles Johnson? Must have gotten his prescription refilled.

  17. William
    July 16th, 2010 @ 10:24 pm

    But think of the bike paths, Stacy!

  18. William
    July 16th, 2010 @ 6:24 pm

    But think of the bike paths, Stacy!

  19. dr kill
    July 16th, 2010 @ 10:59 pm

    How’d the wedding go? Well I hope.

    You said it in #4. Ain’t no easy way out.

  20. dr kill
    July 16th, 2010 @ 6:59 pm

    How’d the wedding go? Well I hope.

    You said it in #4. Ain’t no easy way out.

  21. Fen
    July 16th, 2010 @ 11:05 pm

    doubleplus ungood because Ezra didn’t vet this through Journolist first.

  22. Fen
    July 16th, 2010 @ 7:05 pm

    doubleplus ungood because Ezra didn’t vet this through Journolist first.

  23. Mike T.
    July 16th, 2010 @ 11:14 pm

    Six Years? Well, that’s pretty predictable, as the ultimate Keynsian, FDR, sank the US economy for six extra years, and was set for another six when Dolph and Hideki stimulated the supply side, as it were, and encouraged increased American savings — of the world, but be that as it may.

    Say now! Anybody thinking that this six year hole in the road is going to end badly, too?

  24. Mike T.
    July 16th, 2010 @ 7:14 pm

    Six Years? Well, that’s pretty predictable, as the ultimate Keynsian, FDR, sank the US economy for six extra years, and was set for another six when Dolph and Hideki stimulated the supply side, as it were, and encouraged increased American savings — of the world, but be that as it may.

    Say now! Anybody thinking that this six year hole in the road is going to end badly, too?

  25. Robert Stacy McCain
    July 16th, 2010 @ 11:26 pm

    The Wall Street Journal: “Why the Doomsayers are Wrong”

    In fairness to Dave Kansas, it’s hard to judge long-term prognostications in the short term. Just about every time I pronounce that we’re finally sliding into the ultimate double-dip meltdown, the next day the Dow gains 100 points. So I feel his pain. But the fact we haven’t gotten back to the late-April level of Dow 11,200+ after nearly three months is the real telling argument against the optimists. We still haven’t felt the full impact of the commercial real-estate crunch, and there are all kinds of government-policy bummmers coming down the pike over the next year, including expiration of the Bush tax cuts.

    WSJ, like nearly all financial journalism, has a built-in bullish bias. Now matter how bad things really are, bearish gloom-and-doom is never popular on Wall Street. Go back and read WSJ from early 2007 (i.e., the eve of the housing decline) and you’ll find almost zero pessimism about the future — certainly no indication of the near-catastrophe that hit in October 2008. If we’re now six months or a year away from another disastrous meltdown, you can’t expect to find those warnings on the front page of the WSJ.

  26. Robert Stacy McCain
    July 16th, 2010 @ 7:26 pm

    The Wall Street Journal: “Why the Doomsayers are Wrong”

    In fairness to Dave Kansas, it’s hard to judge long-term prognostications in the short term. Just about every time I pronounce that we’re finally sliding into the ultimate double-dip meltdown, the next day the Dow gains 100 points. So I feel his pain. But the fact we haven’t gotten back to the late-April level of Dow 11,200+ after nearly three months is the real telling argument against the optimists. We still haven’t felt the full impact of the commercial real-estate crunch, and there are all kinds of government-policy bummmers coming down the pike over the next year, including expiration of the Bush tax cuts.

    WSJ, like nearly all financial journalism, has a built-in bullish bias. Now matter how bad things really are, bearish gloom-and-doom is never popular on Wall Street. Go back and read WSJ from early 2007 (i.e., the eve of the housing decline) and you’ll find almost zero pessimism about the future — certainly no indication of the near-catastrophe that hit in October 2008. If we’re now six months or a year away from another disastrous meltdown, you can’t expect to find those warnings on the front page of the WSJ.

  27. Seerak
    July 16th, 2010 @ 11:28 pm

    The general lot of mankind has been poverty and endless toil, a condition ameliorated only in a few fortunate nations that embraced free-market capitalism and the Rule of Law.

    “Fortunate”? What, you mean that nobody knew for a fact that free markets were good, but just kind of blundered into them?

  28. Seerak
    July 16th, 2010 @ 7:28 pm

    The general lot of mankind has been poverty and endless toil, a condition ameliorated only in a few fortunate nations that embraced free-market capitalism and the Rule of Law.

    “Fortunate”? What, you mean that nobody knew for a fact that free markets were good, but just kind of blundered into them?

  29. Robert Stacy McCain
    July 16th, 2010 @ 11:32 pm

    How’d the wedding go? Well I hope.

    The Darling Daughter’s wedding was wonderful, although enormously stressful to Mrs. Other McCain and myself. The newlyweds seem just as happy as newlyweds should be. Of course, no wedding can be pronounced entirely successful until we get some grandchildren out of the deal, but . . .

  30. Robert Stacy McCain
    July 16th, 2010 @ 7:32 pm

    How’d the wedding go? Well I hope.

    The Darling Daughter’s wedding was wonderful, although enormously stressful to Mrs. Other McCain and myself. The newlyweds seem just as happy as newlyweds should be. Of course, no wedding can be pronounced entirely successful until we get some grandchildren out of the deal, but . . .

  31. Robert Stacy McCain
    July 16th, 2010 @ 11:44 pm

    “Fortunate”? What, you mean that nobody knew for a fact that free markets were good, but just kind of blundered into them?

    Well, the influence of English common law, and Adam Smith’s refutation of mercantilist fallacies, put the English-speaking world at a distinct advantage. Burke’s denunciation of the French Revolution also helped inoculate the English-speaking world against the radicalism that had such a disastrous influence elsewhere. So, yes, America and a few other nations have been fortunate — “blessed,” if you prefer — in avoiding the worst effects of anti-capitalist ideas that blighted so much of mankind’s history.

  32. Robert Stacy McCain
    July 16th, 2010 @ 7:44 pm

    “Fortunate”? What, you mean that nobody knew for a fact that free markets were good, but just kind of blundered into them?

    Well, the influence of English common law, and Adam Smith’s refutation of mercantilist fallacies, put the English-speaking world at a distinct advantage. Burke’s denunciation of the French Revolution also helped inoculate the English-speaking world against the radicalism that had such a disastrous influence elsewhere. So, yes, America and a few other nations have been fortunate — “blessed,” if you prefer — in avoiding the worst effects of anti-capitalist ideas that blighted so much of mankind’s history.

  33. Berend de Boer
    July 17th, 2010 @ 12:18 am

    We need another war. That should do it.

    Because abolishing the Federal Reserve is clearly not going to happen.

  34. Berend de Boer
    July 16th, 2010 @ 8:18 pm

    We need another war. That should do it.

    Because abolishing the Federal Reserve is clearly not going to happen.

  35. Dobby
    July 17th, 2010 @ 12:29 am

    A Haiku…..

    Obama has failed
    The worst President ever
    Jimmy Carter grins!

  36. Dobby
    July 16th, 2010 @ 8:29 pm

    A Haiku…..

    Obama has failed
    The worst President ever
    Jimmy Carter grins!

  37. Occam's Beard
    July 17th, 2010 @ 12:52 am

    It’s a fact that in all these wingnut blogs people have not much original stuff to say nowadays.

    We don’t need originality. We need grasp of economics, something sorely lacking on the left.

  38. Occam's Beard
    July 16th, 2010 @ 8:52 pm

    It’s a fact that in all these wingnut blogs people have not much original stuff to say nowadays.

    We don’t need originality. We need grasp of economics, something sorely lacking on the left.

  39. It’s FDIC Failed-Bank Friday! : The Other McCain
    July 16th, 2010 @ 8:56 pm

    […] as of March 31.So, six more bank failures, the Dow drops 261 points and even Ezra Klein admits Obamanomics can’t produce a real recovery.All in all, a great day for pessimists! var addthis_append_data='false';var […]

  40. Thomas Hart
    July 17th, 2010 @ 1:17 am

    Isn’t time to consider selling off assets? Start with the Post Office and all of its real estate. Slash budgets, and eliminate departments. Get rid of the Departments of Agriculture, Education, and so forth. http://tinyurl.com/29u3vsr

  41. Thomas Hart
    July 16th, 2010 @ 9:17 pm

    Isn’t time to consider selling off assets? Start with the Post Office and all of its real estate. Slash budgets, and eliminate departments. Get rid of the Departments of Agriculture, Education, and so forth. http://tinyurl.com/29u3vsr

  42. JorgXMcKie
    July 17th, 2010 @ 1:46 am

    “Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded- here and there, now and then- are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty.This is known as “bad luck.” Robert A. Heinlein

  43. JorgXMcKie
    July 16th, 2010 @ 9:46 pm

    “Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded- here and there, now and then- are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty.This is known as “bad luck.” Robert A. Heinlein

  44. Obama Time Machine: Destination? Prosperity!! « The Rhetorican
    July 16th, 2010 @ 9:57 pm

    […] 16, 2010 Posted by Jehuda in Uncategorized. Tags: Economics, media bias, News, Politics trackback If only! The midterm congressional elections could come down to “a choice between the policies that […]

  45. jr565
    July 17th, 2010 @ 3:41 am

    We spent trillions but we did get a few thousand temporary census jobs out of the deal. So who says Obamanomics doesn’t work?

  46. jr565
    July 16th, 2010 @ 11:41 pm

    We spent trillions but we did get a few thousand temporary census jobs out of the deal. So who says Obamanomics doesn’t work?

  47. Estragon
    July 17th, 2010 @ 5:57 am

    What do you mean ” 30 years after the Keynesian debacle …”? Don’t forget the ’30s – Keynesian policies PROLONGED the Great Depression in America, according to liberal economists at UC-Berkeley, of all places. Amity Schlaes delivered an excellent accounting of the details and the whys in her book, “The Forgotten Man.”

    The fact is that “Keynesian economics” isn’t really a coherent “theory” in the academic sense anyway. Keynes set out to present justifications for central planning – coincidentally the very idea of which Western governments were becoming enamored anyway around the turn of the 20th Century. His formulae have never been born out in the real world except for the occasional short-term success (which might just as likely be due to random variation than concrete policies).

  48. Estragon
    July 17th, 2010 @ 1:57 am

    What do you mean ” 30 years after the Keynesian debacle …”? Don’t forget the ’30s – Keynesian policies PROLONGED the Great Depression in America, according to liberal economists at UC-Berkeley, of all places. Amity Schlaes delivered an excellent accounting of the details and the whys in her book, “The Forgotten Man.”

    The fact is that “Keynesian economics” isn’t really a coherent “theory” in the academic sense anyway. Keynes set out to present justifications for central planning – coincidentally the very idea of which Western governments were becoming enamored anyway around the turn of the 20th Century. His formulae have never been born out in the real world except for the occasional short-term success (which might just as likely be due to random variation than concrete policies).

  49. John Skookum
    July 17th, 2010 @ 7:28 am

    Keynesian economics is popular among the government crowd for the same reason as global warming panic: it provides an excuse for high taxes, high spending, aggrandizement and aggregation of unaccountable governmental power, and most importantly, huge numbers of handsomely paid government sinecures for useless shit-head parasite social science graduates to dole it all out and lord it over the people in this country who actually do the productive work. If Keynes never lived, some other parasite government fellator would have invented him. These morons couldn’t change a tire, much less do anything that puts food in a single mouth. They are the enemies of all that our forefathers shed their blood for.

    Soon the whole scheme collapses. I hope we end up with sovereign state militias hunting down these worthless government bastards with packs of dogs for crimes against humanity. America is over.

  50. John Skookum
    July 17th, 2010 @ 3:28 am

    Keynesian economics is popular among the government crowd for the same reason as global warming panic: it provides an excuse for high taxes, high spending, aggrandizement and aggregation of unaccountable governmental power, and most importantly, huge numbers of handsomely paid government sinecures for useless shit-head parasite social science graduates to dole it all out and lord it over the people in this country who actually do the productive work. If Keynes never lived, some other parasite government fellator would have invented him. These morons couldn’t change a tire, much less do anything that puts food in a single mouth. They are the enemies of all that our forefathers shed their blood for.

    Soon the whole scheme collapses. I hope we end up with sovereign state militias hunting down these worthless government bastards with packs of dogs for crimes against humanity. America is over.

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