Damn lies and the lying liars who tell them: GOP austerity edition

It is an indisputable fact that the economic recovery in the post Bush Great Recession was slowed by an inadequate amount of federal stimulus spending and public employment.  This was the key difference from all previous economic recoveries in the post-war era, which were led by federal stimulus spending and increased public employment. This has been written about extensively by numerous economists over the years.

The slowed economic recovery was made worse by GOP austerity measures, i.e., the budget sequester that everyone said no sane person would ever agree to — until Congress did.

Taking money out of the economy in no way stimulates the economy. This is a fundamental law of economics.

Yet now that the “Obama Recovery” is taking hold and the economy is beginning to perform, conservatives now want to take credit for the economic recovery that they spent years trying to sabotage with austerity economic measures so that President Obama could not claim a success in reversing the abject failure of GOP economic policies that resulted in the Bush Great Recession.

Someone who should suffer eternal damnation in a hell imagined by Dante in The Inferno, Art Laffer, the hack who gave us the disproved and discredited faith based supply-side “trickle Down” GOP economics (i.e., the Laffer Curve), is asserting that conservative austerity economic measures are the reason for the Obama Recovery. Art Laffer Tells Cavuto The Economy Is Recovering Because Stimulus Money Dried Up (video):

If anyone was wondering how the talking heads over at Faux “news” were going to handle the news that the economy has been improving, despite the claims of impending doom from the talking heads in our media and from those on the right for some time now, well, here you go.

Peter Morici wasn’t the only hack on Fox this week doing his best to continue to push the failed trickle-down policies that Republicans have been lying about since their anointed one, St. Ronnie was in office.

It was upside-down land on Neil Cavuto’s show this Thursday as well, with former Reagan economic adviser and resident joke Art Laffer doing his best to pretend that the reason the economy is doing better now is because we’ve stopped stimulus spending. Never mind that recent reality is biting the two of them in the butt.

Steve Benen has more on this revisionist history and revisionist economic theory, this time from anti-tax zealot Grover Norquist. Austerity’s end strengthens U.S. recovery:

For a variety of partisan and ideological reasons, the right finds it necessary to believe austerity helps the economy. Conservatives, on Capitol Hill and off, remain wedded to the idea that taking capital out of the economy and weakening demand will lead to more growth, all evidence to the contrary notwithstanding.

In an amusing twist, as the U.S. economic recovery gains strength, some on the right actually feel vindicated.

Grover Norquist would like Republicans to shut up about how bad the economy is, and instead take credit for the recovery.

The prominent anti-tax crusader hasn’t turned into a bullhorn for President Barack Obama’s economic policies; he still thinks they’re a drag on jobs and wages. But he’s also grown critical of his fellow Republicans for making poor strategic and messaging decisions on several key issues. Rather than tying the economic recovery to spending cuts ushered in by the sequester and to the continuation of 85 percent of the Bush tax cuts, he said, some in the party have insisted their own leaders fumbled those items.

It’s an interesting course correction for the right. In recent years, Republicans have said the combination of the Affordable Care Act, federal regulations, and higher taxes on the wealthy are crushing the economy. That argument obviously doesn’t make any sense in light of the strongest growth and job creation in over a decade.

So Norquist is suggesting his party flip the script: sure the economy is starting to soar, he says, but that’s only because deep spending cuts like “the sequester” gave the nation a big boost. Austerity took capital out of the system, some conservatives are now arguing, and just look at how great the results are!

It’s important to understand the degree to which Norquist has the story backwards. Recent developments haven’t bolstered conservative economic theories; they’ve done the opposite.

First, the national economy hasn’t improved as a result of spending cuts, but rather, the end of spending cuts (New York Times today: Government Spending, Edging Up, Is a Stimulus.)

For a long stretch, government spending cutbacks at all levels were a substantial drag on economic growth. Now, finally, relief is in sight. For the first time since 2011, local, state and federal governments are providing a small but significant increase to prosperity. […]

Across the nation, state and local governments, Democratic and Republican alike, are spending on projects that were stalled. Teachers, who were laid off in droves in recent years, are being hired again. Even federal spending in some sectors is on the rise.

The more the public sector starts to reinvest, as opposed to scaling back, the stronger economic growth becomes. This is the polar opposite of Republican economic theory, and yet, the laws supply and demand don’t much care about politicians’ ideology.

Paul Krugman last week seemed to anticipate Norquist’s argument, and preemptively destroyed it.

Suppose that for some reason you decided to start hitting yourself in the head, repeatedly, with a baseball bat. You’d feel pretty bad. Correspondingly, you’d probably feel a lot better if and when you finally stopped. What would that improvement in your condition tell you?

It certainly wouldn’t imply that hitting yourself in the head was a good idea. It would, however, be an indication that the pain you were experiencing wasn’t a reflection of anything fundamentally wrong with your health. Your head wasn’t hurting because you were sick; it was hurting because you kept hitting it with that baseball bat.

And now you understand the basics of what has been happening to several major economies, including the United States, over the past few years. In fact, you understand these basics better than many politicians and commentators. […]

[I]n America we haven’t had an official, declared policy of fiscal austerity – but we’ve nonetheless had plenty of austerity in practice, thanks to the federal sequester and sharp cuts by state and local governments. The good news is that we, too, seem to have stopped tightening the screws: Public spending isn’t surging, but at least it has stopped falling. And the economy is doing much better as a result.

I can appreciate the dilemma facing Norquist and his allies when it comes to explaining the sudden economic surge. Indeed, after the strongest economic growth in 11 years, Republicans greeted the news with total, literal silence.

As Benen says, there’s “no excuse for peddling nonsense – those hoping to credit austerity for a healthy recovery clearly have no idea what they’re talking about.”

UPDATE: Economist Joseph E. Stiglitz adds in The politics of economic stupidity:

The near-global stagnation witnessed in 2014 is man-made. It is the result of politics and policies in several major economies—politics and policies that choked off demand. In the absence of demand, investment and jobs will fail to materialize. It is that simple.Nowhere is this clearer than in the euro zone, which has officially adopted a policy of austerity—cuts in government spending that augment weaknesses in private spending.

The euro zone’s structure is partly to blame for impeding adjustment to the shock generated by the crisis; in the absence of a banking union, it was no surprise that money fled the hardest-hit countries, weakening their financial systems and constraining lending and investment.

In Japan, one of the three “arrows” of Prime Minister Shinzo Abe’s programme for economic revival was launched in the wrong direction. The fall in gross domestic product that followed the increase in the consumption tax in April provided further evidence in support of Keynesian economics—as if there was not enough already.

The US introduced the smallest dose of austerity, and it has enjoyed the best economic performance. But even in the US, there are roughly 650,000 fewer public-sector employees than there were before the crisis; normally, we would have expected some two million more.

As a result, the US, too, is suffering, with growth so anaemic that wages remain basically stagnant.

In short, conservative austerity economics is building a worldwide economic recession that may come back to bite the U.S. in 2015. But no worries! The conservative media entertainment complex that is now trying to claim credit for the “Obama Recovery” will just blame the worldwide economic recession on President Obama. Conservatives are never wrong, dontcha know.