This 2008 article in The New York Times, Obamanonics, is both prescient and perhaps unknowingly unmasks all that is wrong with it.
Among the policy experts and economists who make up the Democratic government-in-waiting, there is now something of a consensus. They agree that deficit reduction did an enormous amount of good. It helped usher in the 1990s boom and the only period of strong, broad-based income growth in a generation. But that boom also depended on a technology bubble and historically low oil prices. In the current decade, the economy has continued to grow at a decent pace, yet most families have seen little benefit. Instead, the benefits have flowed mostly to a small slice of workers at the very top of the income distribution. As Rubin told me, comparing the current moment with 1993, “The distributional issues are obviously more serious now.” From today’s vantage point, inequality looks likes a bigger problem than economic growth; fiscal discipline seems necessary but not sufficient.
No, the boom didn’t “also depended on a technology bubble and historically low oil prices”. These factors were the main cause of the boom. The deficit reduction did not usher in the 1990s boom. The deficit reduction tempered the boom by taking money out of the private sector to lower the government debt. When the bubble finally burst, it was the continued deficit reduction that held the economy back. This is one of the things that might have made Bushes attempt to undo the damage the deficit reduction was doing had he chosen some other means than the tax cuts for the rich. Bush could have tried the infrastructure spending that Reich would go on to urge years later to Obama.
It is just amazing how people can look at the same facts and some can draw the absolutely wrong lessons from them. Read the article about the opposite prescriptions offered by Robert Reich and Robert Rubin.
In talking about Obama’s self proclaimed pragmatism in economics, The New York Times article had the following to say:
Invoking pragmatism doesn’t help the average voter much; ideology, though it often gets a bad name, matters, because it offers insight into how a candidate might actually behave as president. I have spent much of this year trying to get a handle on what is sometimes called Obamanomics and have come away thinking that Obama does have an economic ideology. It’s just not a completely familiar one. Depending on how you look at it, he is both more left-wing and more right-wing than many people realize.
It is the ideology that predisposes one to take certain lessons from the facts when deciding what lessons the facts teach. The prescience of the article was the warning that Obama was more right-wing than many people realized.