By Scott Galupo, Thomas Jefferson Street blog
The current reality is that a strong rebound in corporate profits (the greatest and truest stimulus of all), ultra-easy money from the Fed, and some small stimuli from government spending are working to generate a stronger-than-expected recovery in a basically free-market economy that is a lot more resilient than capitalist critics think.
By all means, salt the latter news with a reminder that its source is Mr. “Goldilocks Economy” himself. And, to be fair, later in the column, Kudlow makes the requisite noise about how Obamanomics threatens the prospect of growth in the out years.
Somewhat problematically, he notes: “For one thing, tax rates will rise in 2011 for successful earners and investors, quite unlike the Reagan cuts of the 1980s.” As Kudlow well knows, taxes also went up—though not on top earners—under Reagan. And President Clinton’s ’93 hike did not forestall a lengthy boom.
The larger point is, there’s consensus among economists that the Great Recession has ended; the only question is precisely when it ended.
In the short term, it’s going to be very interesting to see how the recovery plays out politically. Namely: Will the economy improve fast enough to stem the tide of Democratic congressional losses this fall? Not according to Rubin the Riveter, who declares: “Democrats are going to be hard-pressed to defend their economic record.
But listen to Kudlow, people: “Credibility is at issue here. Conservative credibility.”
We’ll be able to cry wolf only for so long.
Are we willing to risk looking like fools in 2012? Conservative rhetoric about the economy right now practically sets the table for an “Are you better off than you were four years ago” Obama triumph.
The sky has stopped falling.
Get used to it.