Time's Grunwald: Rick Perry Divorced From Reality

August 29th, 2011 3:59 PM

In "Ben Bernanke Embraces Obama's Reality-Based Presidency," Time's Michael Grunwald posited that Republican presidential contender Rick Perry is divorced from reality, especially when it comes to the best policies to fix the economy.

Grunwald opened with snark...

Texas governor and GOP presidential candidate Rick Perry still knows about as much about monetary policy as Sarah Palin knows about American history—or, for that matter, about monetary policy—but maybe there was a glimmer of insight in Perry’s dopey rant about Federal Reserve chairman Ben Bernanke’s treasonous plot to re-elect President Obama. Because if you cut through the mealy-mouthed Fedspeak, Bernanke’s speech on Friday at Jackson Hole reads a bit like a defense of Obama’s policies. And not just his economic policies. Bernanke, a Republican first appointed by George W. Bush, subtly hat-tipped almost all of Obama’s major domestic policies.

...and pined for the days of pre-Tea Party bipartisan agreement on massive injections of government spending:

My point is not that Bernanke is actually trying to get Obama re-elected; my point is that they both share a reality-based view of the country; the embodiment of widespread Republican abandonment of that view is named Rick Perry. Way back in 2008, when John McCain was pushing cap-and-trade and Republicans favored an individual mandate for health care, just about everyone in Washington agreed that severe slumps call for stimulus. John Boehner and Nancy Pelosi cut a stimulus deal. But that seems like a very long time ago.

But as for reality, well, it's had a way of throwing a monkey wrench into the Obama administration's lofty expectations.

Back in January 2009, the Obama transition team economic advisors predicted that stimulus spending would stem the tide of unemployment, preventing it from rising above eight percent, contrasted with a peak of about nine percent without stimulus spending.

In reality, the unemployment rate under Obama peaked in October 2011 at 10.1 percent, and presently stands at 9.1 percent (see chart at right).

Of course, Jared Bernstein and Christina Romer -- who have since left the administration -- left themselves some wiggle room with this caveat: "there is considerable uncertainty in our estimates: both the impact of the package on GDP and the relationship between higher GDP and job creation are hard to estimate precisely."

Wouldn't the same be true of any forecast of positive effects of a third round of "quantitative easing" [printing money]?