New Economic Data Shows that Right Wing Economic Theory Is Simply Wrong.

[dtotire]

New Economic Data Shows that Right Wing Economic Theory Is Simply Wrong.


Robert Creamer

Political organizer, strategist and author
Posted: August 14, 2009 10:09 AM




Even as Republicans blather on about the evils of a so-called "government takeover of health care," economic news has provided two new key illustrations that the intellectual foundation of right-wing economic orthodoxy has collapsed.

First, the most recent economic numbers on changes in Gross Domestic Product (GDP) and employment made it increasingly clear that -- as The New York Times reported last Saturday -- the Obama economic stimulus and the massive government intervention in the financial markets were the critical medicine needed to prevent complete economic collapse.


It is now clear that, left to their own devices, there can be no doubt that private financial markets would have pulled the entire economy into another Great Depression. Though job losses continued, last month they continued to shrink from their massive January highs. At the same time, the contraction of the GDP dropped to its lowest level since Lehman Brothers collapsed last September.

Even as the right continues to rail against the Obama stimulus package, there is now near-universal consensus that the $700-billion-plus stimulus bill is largely responsible for beefing up the GDP in the last quarter. Studies by the private research firms IHS Global Insight and MoodysEconomy.com concluded that it is already responsible for saving 500,000 jobs.


Everyday there is fresh evidence that government spending to stimulate demand was critically necessary to pull the country out of the economic tail spin caused by the reckless risk-taking of essentially unregulated private financial markets. Contrary to right wing theory, private consumer demand and new business investment are not leading the way out of the Great Recession -- in reality, government demand was an absolute necessity.

But the second piece of economic news tells even more about the bankruptcy of right wing economic thought. Throughout the heyday of Reagan's "supply side revolution" and Bush's tax cuts, the Republicans and the right wing intellectual establishment have hung fast to their foundational belief that tax cuts for business would create private sector jobs.


more:

http://www.huffingtonpost.com/robert-creamer/new-economic-data-shows-t_b_259540.html

[damntexdem]

1. Then it shows the same thing that the old economic data did.

As well as what logic tells us.

[bemildred]

2. It was always dogma, never based on evidence or observation. But yeah. nt

[louis-t]

3. There is a reason it's called the Laffer curve.

Other than the fact that it was the guy's name.

[Demeter]

4. Prevent? Doubtful. Delay? For 6 months, anyway

Time will tell if this was a cure, or just an aspirin of a stimulus for a major concussion.

[KakistocracyHater]

5. Free Market dogma proven failure

shout it out from everywhere & endlessly post this.

[HamdenRice]

6. To be balanced, "Let it Fail," Trotskyite, Doomer, "Limbaugh Left" economic theory also proved wrong

by the stimulus and bailout.