Stimulus vs. Austerity: USA

I keep seeing a certain political sentiment expressed. It goes a little something like this, from James Pethokoukis of the New York Post:

So what’s the problem with the Obama recovery? Why is it the weakest since the Great Depression?

Maybe it’s the Obama policies, like a stunning disregard for the trillion-dollar deficits that are likely already a dead weight on growth. Or maybe it’s the Obama guarantee of more tax hikes and regulation that makes US business too worried to hire and invest.

But it’s not too late to start shrinking unproductive government, cut debt and reduce penalties on work and investment — just like in those recoveries that we used to know.

Then there are the political cartoons, things like this:

Here’s the structure of the idea:

The economic recovery has been insufficiently strong
Therefore, we should do the opposite of what Obama has done
Ergo, vote Romney/Ryan 2012

The first point is correct, the other two points are simplistic and anti-intellectual, and I intend to illustrate both how and why.

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Obamacare and Pizza Shops

Background: recently, pizza shop CEO John Schnatter decided to raise his pizza prices by up to 20 cents giving this reason:

If Obamacare is in fact not repealed, we will find tactics to shallow out any Obamacare costs and core strategies to pass that cost onto consumers in order to protect our shareholders’ best interests.

In other words, the provision in the recent health reforms that private enterprises with in excess of 50 full time employees provide health insurance or pay a penalty has convinced Schnatter that he must raise his pizza prices in order to maintain present profit margins. Today I’d like to investigate whether or not the Affordable Care Act should be opposed on this basis.

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Misconceptions: “Medicare is Going Bust”

Lately it has become fashionable among political pundits to declare that the US Presidential election has devolved into a negative slug fest in which both Obama and Romney are equally culpable, lying and distorting and refusing to accept fundamental realities. This is a sort of professional centrism–taking it as an article of faith that both sides are equally to blame. The trouble is that this centrism doesn’t reflect reality and consequently, in order to maintain it, these “centrists” have resorted accepting blatantly false claims from the American political right. Chief among these is the claim that “Medicare is going bust” and that Paul Ryan’s proposal to turn Medicare into a voucher system is some kind of bold, serious solution. Today I set out to examine and refute that claim.

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Oversimplifications: “Obama is a Socialist”

How many times have we heard this one? “Obama is a socialist”, they say, “he’s just like [insert Communist boogie man here]”. There’s an obvious thing being missed by the right when they call Obama a socialist, and that’s that there are endless variations on socialism. So that brings us to our question for today–if Obama is a socialist, what kind of socialist would he be, and who should the right be comparing him to?

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The Immense Obstinacy of Ed DeMarco

There’s an important fight going on in the Federal Housing Finance Agency that you may not have heard about. Actually, you might not even have heard of the FHFA. They’re the guys who oversee Fannie Mae and Freddie Mac, the state-run mortgage buying businesses. Here’s the trouble–Fannie and Freddie possess a lot of mortgages for which the owners of these mortgages are “underwater”. Not that there’s been any flooding, of course.

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