Grover Norquist and John Lott, Jr. lay waste to the economic claims of Obama-backer, stimulus defender, and New York Times columnist Paul Krugman in their new, hard-hitting book, Debacle: Obama’s War on Jobs and Growth and What We Can Do Now to Regain Our Future.
Grover Norquist, who is the President of Americans for Tax Reform, and economist John Lott marshal a mountain of economic data that reveal that, contrary to Krugman’s Keynesian claims, President Obama’s 2009 stimulus plan has made the American economy worse, not better.
Their refutation makes for fascinating and sometimes humorous reading.
Consider, for example, the prediction Krugman made the day Obama signed the original stimulus bill into law: “I am still guessing that we peak out at around 9% [unemployment] and that would be late this year .” Furthermore, Krugman declared that double-digit unemployment was “not the most likely event.” As Norquist and Lott note, unemployment hit 10.1% and remained above 9% two years after Krugman predicted it would peak.
Once it became clear that President Obama’s stimulus plan had failed to ignite the economic recovery he promised, Krugman and others began scrambling for excuses to explain why Obama’s spending spree hadn’t worked. One explanation Krugman offered was that right-wingers had erroneously claimed government spending had increased when it hadn’t:
So as I said, the big government expansion everyone talks about never happened….And federal aid to state and local governments wasn’t enough to make up for plunging tax receipts in the face of the economic slump….[T]here’s a widespread perception that government spending has surged, when it hasn’t–is that there has been a disinformation campaign from the right, based on the usual combination of fact-free assertions and cooked numbers.
As Norquist and Lott reveal, Krugman’s claims rely on a slippery game of sleight of hand; Krugman cherry-picks the only year when total government spending dropped, which was from 2009 to 2010, “and even then, it was still much higher than just a couple of years earlier.” In point of fact, note the authors, government spending has grown 12 percent since 2008 and 20 percent since 2007.
In one of the more outrageous examples of Paul Krugman’s Keynesian illogic, Norquist and Lott showcase the New York Times columnist’s bizarre contention that an alien space invasion could help stimulate America’s floundering economy:
Paul Krugman: If we discovered that space aliens were planning to attack and we needed a massive buildup to counter the space alien threat and really inflation and budget deficits took secondary place to that, this slump would be over in 18 months. And then if we discovered, oops, we made a mistake, there aren’t any aliens, we’d be better off.
“Would we really be better off paying workers to dig ditches and then fill them back up?” write Norquist and Lott sardonically. “Or, how about paying people to build massive defenses against imaginary space aliens?”
Debacle also brings in Krugman’s contention that the 9/11 terrorist attacks were an economic winner for America for a well-earned drubbing:
Krugman also thought that the 9/11 attacks “could even do some economic good” by stimulating the economy because “all of a sudden, we need some new office buildings” and “rebuilding will generate at least some increase in business spending.” Unfortunately, this is the cornerstone of Obama’s Stimulus program. The examples also highlight how inconsistently these arguments are used by the president and his defenders. The 9/11 attacks or natural disasters in the United States were supposedly beneficial for the U.S. economy because they increase spending, but the earthquake in Japan was detrimental
Grover Norquist and John Lott offer numerous data-laden refutations to Paul Krugman’s myriad Keynesian claims. It would all be humorous were it not for the fact that Krugman’s big spending philosophy forms the intellectual foundation of Barack Obama’s economic policies.
The result: the Obama economy has been an unmitigated debacle.