Tuesday, September 01, 2009

Ahead of the Curve

Time to toot my own horn here...

Case #1, Honduras motivations

Me, July 21st:
Maybe they feel they can score a "win". In doing so, they risk further alienation of friendly Latin American nations.

Mary O'Grady in the Wall Street Journal, August 30th:
This administration needs a win. Or more accurately, it can't bear another loss right now. Most especially it can't afford to be defeated by the government of a puny Central American country that doesn't seem to know its place in the world and dares to defy the imperial orders of Uncle Sam.

Case #2 - Stimulus Payback

Me, August 7th:
Let's cut the "stimulus" in half and pocket the rest of the money for debt reduction. We're gonna need it.

House Republican Whip Eric Cantor in USA Today, September 1:
Over $400 billion committed toward 'stimulus' will not be spent this year. Let's redirect that money to reduce the deficit and start to get our financial house in order.

Ok, so I'm not the first person to suggest cutting our losses on the badly implemented stimulus. But I was there weeks ahead of Cantor. And I'm pretty sure I was on the leading edge with that Honduran "win" analysis.


Anonymous said...

The Wall Street Journal today:

"U.S. Economy Gets Lift From Stimulus

...Economists say the money out the door -- combined with the expectation of additional funds flowing soon -- is fueling growth above where it would have been without any government action....


The problem is you believed the GOP talking points that said the stimulus didn't work when only a fraction of it had been in the pipeline and that anyone with a brain can tell that it can take months to tell what is going on via the usual metrics. But, the GOP decided it had failed BEFORE those metrics were due.

Funny that.

JoeCollins said...

The headline oversells what's actually in the article. In the very second sentence you get this:

But there's little agreement about which programs are having the biggest impact. Some economists argue that efforts such as the Federal Reserve's aggressive buying of Treasury debt."

I argued that some time ago.

Most of the vague citations of "economists" and "forecasters" support the headline. Fewer of the direct quotes of actual people do---

Dave Anderson, chief financial officer of Honeywell International Inc., said the stimulus package actually froze business activity at first as firms tried to figure out how they could benefit from the government spending. The $787 billion package "created actually a slowdown in order activity in terms of the flow that we would normally have anticipated," Mr. Anderson said at a conference sponsored by Morgan Stanley. "We anticipate that that's going to actually pick up in the second half of the year. I think it's not unreasonable to see several hundred million dollars of orders." (emphasis added)

Hardly an unalloyed endorsement.

"I don't think the stimulus was necessarily as effective as people claimed it to be or claim it will be," said Joseph LaVorgna, chief U.S. economist with Deutsche Bank Securities Inc.

Funny, that.

One big question: Will the boost evaporate once the programs end?

Stuart Hoffman, chief U.S. economist for PNC Financial Services Group, said the stimulus package "caused this bit of a concentrated burst [that] probably will exaggerate the pace of economic growth," since some areas, such as auto sales, could fall back to low levels.

If the stimulus is timed to kick in in 2010, as the article admits, the recession will already be two years old by then (NBER points to Dec 2007 as the start), which is when it the economy might be expected to be growing on its own without any centrally planned stimulus spending.