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Wednesday, June 16, 2010

"Government to the Economic Rescue"

Alan Blinder says (correctly) that the "government—including two administrations, Congress, and the Fed" saved "us from falling into the abyss":

Government to the Economic Rescue, by Alan S. Blinder, Commentary, WSJ: ... It seems that more Americans believe that "Barack Obama's economic policies" (the pollsters' exact words) have made economic conditions worse (29%) than better (23%), and another 35% of Americans think his policies have "not had an effect so far." So only 23% of the public thinks the president's policies have helped while 64% thinks they have failed. ...
The 64% are wrong. You can certainly argue that the administration has not done enough, or that other policy choices would have been better. ... But to say that the president's policies either had no effect or were harmful flies in the face of both logic and fact. ...
While it's certainly too early for historical perspective on the stunning events of 2007-2009, I venture to guess that, when the history of the period is written, it will read something like this: For a host of reasons the U.S. economy was struck by a calamitous financial crisis followed by a vicious recession. The government—including two administrations, Congress, and the Fed—marshaled enormous resources to save the financial system and to fight the recession. It worked.
Specifically, I would point to three policy landmarks, two of which were and remain terribly unpopular—and which probably account for the negative polling results. The first was the much-maligned Troubled Asset Relief Program (TARP)... The second ... was the fiscal stimulus package that President Obama signed into law..., the third ... the "stress tests" of 19 big financial institutions...
So the next time you see Chairman Bernanke, congratulate him... And the next time you see members of the House and Senate who voted for TARP and the stimulus package, give them a hug and say thank you for taking two monumentally tough votes that helped keep us from falling into the abyss.

    Posted by on Wednesday, June 16, 2010 at 12:42 AM in Economics, Fiscal Policy, Monetary Policy | Permalink  Comments (29)


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