On Fox News Sunday, Karl Rove repeated a lot of economic nonsense we’ve heard before, but the appearance struck me as more annoying that most.
Fox figures have been relentless in insisting that the economic stimulus failed — even though experts agree that it boosted GDP and employment. Moreover, numerous economists “think the economy would be worse” today without it.
But on Fox Broadcasting’s Fox News Sunday, Fox News contributor Karl Rove claimed that President Obama’s policies have “utterly failed” and that when he “passed the stimulus bill, he said unemployment would be 6 percent.” Rove also claimed that “each time [Obama has] sort of gotten around to tossing an idea out on the table, it has included only more spending, more deficit [and] more debt.”
Again, this isn’t exactly new. On the contrary, it’s boilerplate GOP rhetoric.
But there’s just something about Rove lecturing on this that rankles. The stimulus ended the freefall Obama inherited from … Rove’s White House. There’s a jobs crisis that the president inherited from … Rove’s White House. Rove is complaining about “more debt,” after Obama inherited a $1.3 trillion deficit and a fiscal disaster from … Rove’s White House.
What we have here is an arsonist whining on national television about the speed with which the fire chief is putting out the arsonist’s own fire. Worse, he’s lying about all of the relevant details while making the complaint.
What’s more, Rove’s little tantrum comes on the heels of reports that President Obama inherited an economic catastrophe from Rove’s team that was even worse than we realized at the time. Ryan Avent recently had an important piece on this, explaining that “the situation was far more dire than anyone in the administration or in Congress supposed.”
Output in the third and fourth quarters fell by 3.7% and 8.9%, respectively, not at 0.5% and 3.8% as believed at the time. Employment was also falling much faster than estimated. Some 820,000 jobs were lost in January, rather than the 598,000 then reported. In the three months prior to the passage of stimulus, the economy cut loose 2.2m workers, not 1.8m. In January, total employment was already 1m workers below the level shown in the official data.
We can’t know exactly how things would have played out in a world in which key policymakers had better data. If the true scope of the economic disaster in the fourth quarter had been clear, however, it seems certain that Ms Romer’s models would have shown a need for more stimulus, that the White House would have agreed to push for more (and perhaps a lot more), and that Congress would have been much more receptive to a bigger bill. A drop of 8.9% does seem much more terrifying, after all, than a 3.8% decline. Bigger stimulus would have reduced the economic deterioration in subsequent months. The Fed might also have been more aggressive.
It’s important to emphasize, in case this isn’t obvious, that the numbers officials were working with weren’t just off by a little. The Obama administration was told that in the quarter leading up to the president’s inauguration, the economy shrank by 3.8%. To be sure, that would be an awful number showing an economy in deep trouble.
But with the benefit of hindsight and revised data, we now know the economy actually shrank over those three months by 8.9%. If 3.8% contraction is a disaster, 8.9% is a catastrophe.
And all of this was occurring before President Obama even raised his hand to take the oath of office. This was the fire his Republican predecessor left for him to put out.
If Rove wants to apologize to the nation for his role in leaving this mess, I’m sure the White House would be gracious. But in the meantime, maybe he should keep his mouth shut, grab a mop, and play a more constructive role in helping address the crises he helped create.