Failed Policy: The Nobel Prize for Economics goes to two Americans who have separately exposed the flaws in government stimulus spending. For a Keynesian president, it’s the Anti-Peace Prize.
When Obama was awarded the Nobel Peace Prize during his first year in office, detractors said it was for doing nothing.
That can’t be said for Thomas Sargent of New York University and Princeton’s Christopher Sims, whose macroeconomics work has been of invaluable help to central bankers and other economic policymakers, and for which they now share this year’s economics Nobel.
Sargent’s discoveries in particular echo the rationale Republican leaders in Congress have presented in opposing the massive Democratic stimulus spending during the first two years of the Obama administration — that such spending seeks to give the economy nothing more than what House Budget Chairman Rep. Paul Ryan over the weekend aptly called a “sugar high.”
As the New York Sun pointed out Monday, Sargent has also criticized Obama’s stimulus policies specifically. It pointed to an interview a year ago in which he called the calculations of the Obama Council of Economic Advisers “surprisingly naive for 2009.”
……On high unemployment and a possible double dip, Sargent told Business Week that Washington risks breaking its benefits contracts. He said “it’s not clear which of the incredible promises are going to be broken first.”
While Sims might not be quite as outspoken a critic of Obamanomics as Sargent, at a 2004 Federal Reserve Bank of Boston conference, he selectively criticized Alan Blinder, economic adviser to Bill Clinton, Al Gore and John Kerry. On using stimulus spending to counteract economic downturns Sims said Blinder overlooks the debt-driven “inter-generationally unfair crowding out” that a massive stimulus can cause.
All in all, the judges honored economists who’ve shown what the public knows well: Obamanomics is a failure.
It wasn’t just the insane amount that was spent on the “stimulus”, it’s where the money ended up; unions, government-funded takeovers of banks and auto industry, as well as jaw-dropping asinine pork.