Keynes and Obama

In my last post I argued that Reagan and Bush were Keynesians whether they admit it or not.

Barack Obama on the other hand probably would not shy away from the Keynesian label. Obama's $900 billion stimulus, designed to get us out of the Great Recession, is right out of the Keynesian playbook.

With unemployment still hovering around 9.7% many in this country are not convinced that his policies have worked.

Just today quarter one GDP numbers came out and they were good but not great. The Bureau of Labor Statistics stated that the economy grew 3.2% . This number would be great under normal circumstances but these are not normal times. The country really needs to experience growth in the 5 to 6% range to fully recover from the past two years.

But we should be thankful that even the modest recovery we are experiencing was made possible by Obama's stimulus and the economic theories of Keynes.

Democrats and Republicans will argue this point but I would rather look at independent analysts that are paid to create accurate data for clients instead of listening to partisan spin doctors.

The following graph shows the estimates from three different Wall Street analysts on what the economy has done with the stimulus and what it would have done without.

It seems clear that doing nothing would have been disastrous. Ultimately though the American people will render their judgment over the next several elections.