Tuesday, December 9, 2014

Recovery at Last

Paul Krugman's op-ed in yesterday's NY Times is an interesting mix of ideology and philosophy fallacies.  He is writing about the jobs report from Friday, noting that we finally have a good report.  Maybe we have recovery at last.  It still isn't great and the stimulus package from early in the Obama Administration was not enough, as he repeatedly argued, but finally we get good news.  Also the report refutes critics who said that the slow economic recovery was due to regulations and new programs like Obamacare.  Since Obamacare is in place and we now get the good news, clearly it didn't have a negative effect.  Here is the fallacy where because one thing precedes another there is a relationship among them.

More than this, Krugman never considers the possibility that the economy's self-correcting tendency eventually would generate recovery.  The last recession was particularly difficult and the buffers people have were depleted in some cases.  The drop in housing prices impacted many households.  Further, we had over built residential construction in the run up to the recession, so time would have to pass before a real recovery in housing could take place.  The improving economy has little to do with government activist policies and much to do with the natural tendencies in a market economy.

One more related note.  I saw a clip of Pres. Obama this morning talking about all the jobs he has created over the last 50+ months.  I don't care whether a Republican or Democratic president uses such language--it is wrong.  Presidents don't create jobs.  What a president along with Congress can do is create an environment in which people and businesses can flourish.  But the only jobs they create are government jobs.

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