Paul Krugman posted a chart this morning, which we covered here, designed to prove a counterfactual: that the economy would have been staggeringly worse had it not been for Obama’s stimulus.
To Krugman’s credit, the trajectory of global economic output looks WAY better than in 1929.
But here’s the thing. You could just as easily look at this chart and say “Thank you George Bush!” or “Thank you Hank Paulson.” It’s not obvious to us, anyway, that the stimulus (Obama’s thing) contributed to the change in trajectory any more than the bailouts.
Granted, the bailouts may come back to bite us big time down the road, when a bursting bubble takes down even bigger, too-big-to-fail firms. But in terms of where we are right now, it’s clear that preventing a cascade of bank failures, from Citigroup to Goldman Sachs to all the insurers had a HUGE positive impact. The stimulus? It’s not so obvious.