Thursday, December 26, 2013

The Not So Beneficent Hand(s)

Economist John Taylor did a regression analysis on retail sales throughout the 2007-2009 recession and found that the trend line proceeded accordingly/modestly and that it only bottomed out when Bush, Paulson, and Bernanke a) started talking about another great depression and b) foisted upon the American public and taxpayer the Troubled Asset Relief Program. This stat coupled with the fact that lending in both the individual and business sectors was never in any sort of death spiral has led many of the saner American economists (Lee Ohanian, Edward Prescott, Taylor, etc.) to conclude that this current economic downturn was never in fact a financial crisis but a policy crisis (a crisis that has been made all the more worse by the fact that Obama has pretty much doubled down on Bush's interventionist policies). And I wholeheartedly agree.


dmarks said...

"...started talking about another great depression..."

Selling fear, Chicken Little doomsday scenarios in order to justify what is probably the single example of corporate welfare in history. And yet there are still so many (oddly, I find them most among Progressives) who are so gullible and buy into this, and also vigorously defend the auto-industry handout as well.

Les at RN has an interesting post concerning crony capitalism over there. His and my rage at this seems to match, even though I think we agree only 80% on the culprits.

Will "take no prisoners" Hart said...

If I had to pick the worst I would probably go with Greenspan in that it was his FED policies that really poured the most gas on the fire.