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.