Learning the wrong lessons

One of my concerns about this recession is that recovery will come in spite of the "stimulus" plan, and that Obama's policies will get the credit for having turned things around. It doesn't matter that Obama would get the credit, but that his policies would be seen as the elixir that resurrected the economy when in fact they had little to do with it. Were this to happen, America would learn the wrong lessons on how to deal with an economic downturn.

It's been nearing 80 years since the Great Depression, and only now are meaningful numbers of economists beginning to conclude that FDR's policies actually made things worse. It's looking like we learned the wrong lessons from the Great Depression, and that's scary since Obama has modeled the current response after FDR's. There is a danger that history is repeating itself, that we will become convinced that Obama's policies have succeeded, even as they deepen and lengthen our economic woes.

As Jacob Sullum describes it, that's just what is happening. Responding to a NY Times article which suggests that the US is recovering more quickly than Europe because we spent more lavish amounts of money, Sullum writes:

One problem with attributing America's slightly less bad economic news to the Obama-backed $787 billion stimulus package is that very little of the money actually has been spent. As of a month ago, less than 6 percent of the stimulus money had gone out, and only 25 percent is expected to make its way into the economy by the end of the year. Assuming the spending is spread evenly over that period, less than 9 percent has been spent so far. That's not even one-tenth of an amount that Treasury Secretary Timothy Geithner suggested would prove inadequate.

This is an important observation. Let's hope it doesn't get buried and forgotten in the months that follow.