Right Wing Finance

“Vice President Joe Biden said Sunday that “everyone guessed wrong” on the impact of the economic stimulus, but he defended the administration’s spending designed to combat rising joblessness. “

To be clear about this, since the Vice President won’t be, not everyone guessed wrong – everyone in the administration thought bubble guessed wrong. And why are they guessing anyway?

“Just 10 days before taking office, Obama’s top economic advisers released a report predicting unemployment would remain at 8 percent of (sic) below through this year if an economic stimulus plan won congressional approval. “

“Yet the Bureau of Labor Statistics reports that unemployment in May rose to 9.4 percent.”

The crux of the problem here is 2 fold: 1). The administration failed to heed the warnings of those who did not agree with their rosy outlook, 2). The administration is attempting to control the economy when they ought to leave it to manage itself.

On point #1.

“”No one realized how bad the economy was. The projections, in fact, turned out to be worse. But we took the mainstream model as to what we thought — and everyone else thought — the unemployment rate would be,” Biden said. “

“At the time our forecast seemed reasonable. Now, looking back, it was clearly too optimistic,” he told reporters last Monday. “

Plenty of people warned that the so-called stimulus would only lead to bigger government and bigger deficits, but do little to nothing to combat employment or spur economic growth. The problem for the Administration was that these people were on the other side of the aisle, and therefore ignored.

On point #2.

“”The bottom line is that jobs are being created that would not have been there before,” Biden said. “

No white house administration can control the economy – nor should they. Yet that’s exactly what the Obama white house is trying to do. It’s not a matter of wanting or not wanting them to fail, they can’t help but fail. Free market economies are self regulating systems, and although they have done much to tear down the free market economy, it’s still far to decentralized to control outright.

A president cannot dictate that there should be x new jobs, wave a wand and make it happen. Job growth by decree is temporary at best, eventually those jobs need to provide essential or desirable products and services, or they simply siphon money that would otherwise go elsewhere. That path does not lead to growth.

“”Can I claim credit that all of that’s due to the recovery package? No. But it clearly has had an impact,” Biden said. “

Yes, but the impact is temporary and at what cost?

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