Phony fear factor

[Guns Guns Guns]

The good news: After spending a year and a half talking about deficits, deficits, deficits when we should have been talking about jobs, job, jobs we’re finally back to discussing the right issue.

The bad news: Republicans, aided and abetted by many conservative policy intellectuals, are fixated on a view about what’s blocking job creation that fits their prejudices and serves the interests of their wealthy backers, but bears no relationship to reality.

Listen to just about any speech by a Republican presidential hopeful, and you’ll hear assertions that the Obama administration is responsible for weak job growth.

How so?

The answer, repeated again and again, is that businesses are afraid to expand and create jobs because they fear costly regulations and higher taxes. Nor are politicians the only people saying this. Conservative economists repeat the claim in op-ed articles, and Federal Reserve officials repeat it to justify their opposition to even modest efforts to aid the economy.

The first thing you need to know, then, is that there’s no evidence supporting this claim and a lot of evidence showing that it’s false.


http://www.nytimes.com/2011/09/30/opinion/krugman-phony-fear-factor.html?_r=1

 

[Guns Guns Guns]

The starting point for many claims that antibusiness policies are hurting the economy is the assertion that the sluggishness of the economy’s recovery from recession is unprecedented.

But, as a new paper by Lawrence Mishel of the Economic Policy Institute documents at length, this is just not true.

Extended periods of “jobless recovery” after recessions have been the rule for the past two decades.

Indeed, private-sector job growth since the 2007-2009 recession has been better than it was after the 2001 recession.

We might add that major financial crises are almost always followed by a period of slow growth, and U.S. experience is more or less what you should have expected given the severity of the 2008 shock.

Still, isn’t there something odd about the fact that businesses are making large profits and sitting on a lot of cash but aren’t spending that cash to expand capacity and employment?

No.





http://www.nytimes.com/2011/09/30/opinion/krugman-phony-fear-factor.html?_r=1