49 economists polled by the Wall Street Journal gave the president and Treasury secretary failing grades for their efforts to revive the economy. The economists’ criticism focused on delays in enacting key parts of plans to rescue banks and the confusion following each one of Geithner’s talks:
“They overpromised and underdelivered,’ said Stephen Stanley of RBS Greenwich Capital. “Secretary Geithner scheduled a big speech and came out with just a vague blueprint. The uncertainty is hanging over everyone’s head.”
The result: The Dow Jones Industrial Average is down almost 20% since the announcement, a sign of shaken investors’ confidence.
(By the way, am I the only one to think, “and this is the guy whose $34,000 tax indiscretion was overlooked because he is so good and we absolutely needed him to fix our economy?”)
Finally, the Wall Street Journal’s panel of economists pushed back their forecasts for when the recovery would begin. On average, they predicted the downturn would end in October. The good news is that president Obama agrees with them, since his own budget projections forecast that in 2010 the economy will grow by 3.4 percent.
Then here is a question for Obama: If he is correct, how can he justify spending the bulk of his stimulus funds after the economy has recovered? After all, by his own count, 75 percent of stimulus funds won’t be released until sometime in 2010. Maybe this sort of contradiction is to be expected from a man who signed the biggest spending bill in history one week, and then organized a fiscal responsibility summit the next.
And here is the question for Nancy Pelosi: If her boss, the president, is correct, what’s all the talk about needing a second stimulus?
— Veronique de Rugy is an economist at the Mercatus Center at George Mason University.