THE COUNTERFACTUAL FIRESIDE CHAT AMERICANS HAVEN'T HEARD
Steve Benen, responding to this New York Times article, which says that Republicans plan to make the abysmal job market a big issue going into 2010:
As a matter of political strategy, that makes a lot of sense. The job market is awful; Democrats are in power; therefore it stands to reason Republicans would blame Democrats for the awful job market....
The problem, though, is one of credibility. For one thing, as the economy fell off a cliff, President Obama pushed through a stimulus package that helped prevent a depression.
Robert Samuelson in The Washington Post:
How close did we come to the Great Depression 2.0? ... Christina Romer, the head of President Obama's Council of Economic Advisers, already has an answer: pretty darn close....
Private markets for goods, services, labor and securities do mostly self-correct; but panic, driven by the acute fear of the unknown, feeds on itself and disarms these stabilizing tendencies. In this situation, only government can protect the economy as a whole, because most individuals and companies are involved in the self-defeating behavior of self-protection.
Government's failure to perform this role in the early 1930s transformed recession into depression...
Look, you and I (and Steve Benen and Robert Samuelson) all know that government intervention kept this crisis from being much, much worse. But the average American doesn't know that. The average American doesn't know that we wouldn't have been better off just letting everything fail that was on the verge of failing, with government intervention limited to, oh, say, some tax cuts.
Contemptuous shouts of "Neo-Hooverism!" don't settle the matter. Most Americans don't understand what that means. They don't even necessarily understand how much worse the Great Depression was than this. They don't know what would have happened if the response to this crisis had been Hooverite. And I can't say I could describe it with any precision. Twenty percent unemployment rather than ten percent? For maybe four years? What exactly would it have been like? What would it have felt like?
I'd love for someone to tell the story of what didn't happen -- as a narrative of history we didn't live through. I wish we had a president who would tell that story, in plain words, in order to show what government interventions -- inadequate though they may be -- have prevented. (By the way, folks, don't even think about a second stimulus. Obama's as likely to get one of those as Mississippi is to approve gay marriage by referendum.)
I'd settle for a magazine article or a TV show or a documentary or a widely read blog post, or maybe one of those This American Life money stories. But it would be ideal if a narrative really reached the broad public that explained why government does these things. It's the central thing most Americans just don't get. And it's that lack of comprehension that keeps neo-Hooverism -- and the entire Norquistite shrink-government-so-it can-be-drowned-in-the-bathtub idea -- alive and well as a thinkable approach.
(AND: While I'm blue-skying, let me point out that I also wish there'd been serious, too-big-to-fail-destroying regulatory reform, preferably in the first hundred days, and preferably enough to destroy "too big to fail" once and for all. My support for the bailouts is not out of any love for fat cats.)