Friday, July 8, 2011

Slow Down, Everyone

Item: Tim Pawlenty has a lousy few weeks; NYT wonders if he's about to drop out.

Item: an awful jobs report is released; people start digging Barack Obama's grave.

Item: everyone has already condemned whatever is going to be in the budget deficit deal. Which doesn't, yet, exist.

Slow down, everyone. Yeah, the jobs report stunk. Does it mean that the economy will be awful next spring? No, not really. It's bad news, to be sure, and it's a hint about the future, but that's all. There's every possibility it could get worse...but it also could improve.

Yeah, Tim Pawlenty really did have a lousy couple of months: his polling numbers, fundraising totals, and debate performances were all underwhelming. The case for him, however, remains just what it's always been. He is, to be sure, legitimately hurt by Rick Perry's (still half-committed) campaign, but he remains a viable contender.

As for the budget deal -- I'll just repeat, one more time, that while it certainly makes sense for advocates to be pushing hard for their priorities, it's still far too early to condemn final results. Because we don't know what they are.

Hey, I know; this is altogether pointless and hopeless. No one wants to hear, for example, that everyone will have long forgotten summer 2011 employment numbers by November 2012. And of course sometimes the news everyone overreacts to is, in fact, important -- that's certainly the case with the jobs numbers. But, well, I guess I think we also need some people to remind everyone to not get ahead of themselves.

Slow down, everyone.


  1. It's hard to tell people who are struggling to slow down. But politicians still need to stop acting like babies.

    As for the economics, we've seen too many bad numbers in unemployment to assume it's going to get better, so I wouldn't hold my breath.

  2. But everything that's coming out from negotiations is just pure gloom and doom.

    We need very large spending increases, right now. A small spending increase would be a huge defeat for Democrats. Spending cuts would be catastrophic.

  3. I remember reading somewhere that Nixon told his staff he wanted the economy to boom in July of 1972 for his re-election. There’s something to be said for that. Put it another way if you were David Axelrod would you want awful job numbers in July of 11’ or 12’? It’s just like the blow up about David Plouffe today, what normal American knows who David Plouffe is? My brother would probably say, “didn’t he catch for the Soxs like two seasons ago?”

  4. Actually, @longwalk, its interesting you mention Nixon's economic chicanery. I'm personally curious that more folks aren't outraged by the wage and price controls of Fall 1971, which would appear to be designed to produce exactly the July 1972 boom you describe.

    Suppose that Friedman was correct that inflation is always and everywhere a monetary phenomenon. When inflation was running out of control in mid-1971, Friedman would say that more and more dollars were chasing the same basket of goods. Nixon then freezes prices in August 1971 (and wages too), so while would-be inflation-causing dollars are still being pumped into the economy, that increasing pool of dollars has the same nominal purchasing power, meaning there's ever-increasing slack in the economy.

    So when Nixon pulls back on the controls somewhat in November 1971, what do businesses do? Now there's a lot more nominal money chasing the same basket of goods, so businesses start raising prices, which looks like - and for awhile, in the summer of '72, gets reported as - real economic growth, but its actually really bad inflation being unleashed, eventually getting all the way to 12% in 1974.

    For me, the wage and price controls are especially pernicious, because they have to do with economics, which of course channels the joke about the economist who predicted 9 of the last 5 recessions. Did Nixon really do what I accuse him of above? Er, maybe? And anyway, how do you separate Nixon's contribution from OPEC, etc, etc, etc?

    Even if he did do it for pernicious reasons, and it may smell pretty bad, well, if there had been no Watergate, and he didn't feel the need to record every obnoxious and offensive thing he said, might we have yet regarded his as a pretty-good presidency? A bit disturbing, IMHO.

  5. With an outsourced economy created to benefit corporate elites why would anyone cling to the notion that the real economy for the middleclass will improve again EVER until tariffs on goods manufactured by cheap Chinese slave labor enforce the social contract in America. We can compete fine with European companies but not with slaves, nor should we. Obama is Vernon Jordon's and Wall Street's pet.

    Personally brave (would you want to be the first African American presidential candidate in an age of crazy haters), but politically soulless and traitor to the Progressive Movement he used to attain personal power and great future wealth. Cite a single instance of progressive legislation in his entire career for which he was singularly instrumental in passing ??? I can not, maybe that's just me.


Note: Only a member of this blog may post a comment.

Who links to my website?