海角大神

As others have noted, conservatives who鈥檇 like to bash the President on the economy are having an awfully hard time right now, as the recovery proceeds apace.聽 Too slowly apace, for sure, but no objective observer can miss that the trend is our friend and that even the job market, while still far too weak and with conspicuous downsides (intractable long-term unemployment), is improving.

So, they鈥檙e stuck with 鈥測eah, things are getting better, but if we were in charge, they鈥檇 be even better!鈥�

This, of course, is the flipside of a rap with which I鈥檓 intimately familiar: 鈥渟ure, things are bad鈥攂ut without our actions, they鈥檇 be even worse!鈥�

Neither are convincing to most people, because most people don鈥檛 engage in the economist鈥檚 counterfactual: the path the economy would have taken absent your interventions.聽 It鈥檚 the 鈥渃ompared-to-what鈥� in the above statements.

Thing is, I know and believe, within confidence intervals, my counterfactual.聽 It comes from tried and true modeling based on the historical relationships of how advanced economies respond to stimulus.

Or, if you don鈥檛 like that sort of thing, you can derive a counterfactual from simply projecting the course the economy was on before you did your policy thing, and compare that to the actual path of growth and jobs (you can see that approach 鈥攕ee discussion around Table 3).聽 [Note: the fresh-water economists, who continue to willfully ignore critical lessons of our past, deeply disdain the Keynesian multiplier models鈥攂ut I haven鈥檛 heard their objections to this other, much less theoretical approach, as in Table 3 in the above doc.]

What I don鈥檛 get is their counterfactual.聽 Other than unconvincingly waving hands, muttering how things should be better, how the EPA and OSHA rules are killing businesses, yada, yada鈥攍et鈥檚 see some analysis.

Gov Romney鈥檚 got real economists on his team.聽 If he wants to make the case that things would be better if we followed his plan鈥攚hich actually looks pretty Hoover鈥檈sque to me鈥攅xplicitly anti-stimulus re jobs and liquidate the housing market鈥攍et鈥檚 see the model.聽聽 True, most people won鈥檛 believe it anyway, but those of us familiar with counterfactual analysis would like to see if there鈥檚 anything there, or if this is just disgruntled smoke-blowing.

I鈥檓 not saying we鈥搘hen I was with the admin鈥搊r the Federal Reserve got everything right by a long shot. 聽But what I don鈥檛 see is anything approaching a coherent argument about how things would be better otherwise.