What does this mean? One interpretation is that the fiscal stimulus has failed to achieve what Team Obama thought it would. Another interpretation is that the baseline was worse than they believed at the time.
Rather than pointing fingers we need to drive overall government accountability. In light of the shifting baseline, it’s impossible to hold the administration accountable for whether its policies are achieving their intended effects. To be clear, this lack of accountability is not a feature on this specific administration but is, instead, a reflection of the inherent uncertainties associated with macroeconomics.
The administration, however, has not been particularly forthright in admitting to this lack of accountability. Indeed, the act of releasing quarterly reports on how many jobs have been “created or saved” gives the illusion of accountability without the reality.
There are two significant points we need to focus on; neither of them are partisan:
- First, as much as we’d like to point to one political group or another, incalculable macroeconomic consequences have played a substantial role in undermining the global economy; regardless of the party in office.
- Second, we must radically increase government reporting transparency and continue to make additional raw data available to allow for third parties to validate conclusions and assumptions.
If we must assign blame, assign it to variable change (Bayes’ theorem). We’ve always had several options available to combat the recession. However, due to the complexity of the solutions, financial burden and time to implement, we haven’t had the luxury to eliminate solutions after a short period allowing us to increase the probability of achieving the greatest success.
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