So, we had this big fiscal stimulus in 2009, with lousy employment performance. Now, we have so-called austerity, and in addition to the 195,000 jobs added last month, the BLS reports,
The change in total nonfarm payroll employment for April was revised from +149,000 to +199,000, and the change for May was revised from +175,000 to +195,000. With these revisions, employment gains in April and May combined were 70,000 higher than previously reported.
Do Keynesians belong in the always-wrong club?
Scott Sumner would argue that the difference is monetary policy.
Scott Summer is already on top of this.
The Keynesian narrative (at least as I see it strung out in the press in IB reports, etc) already allows for these inconveniences. This report (but it could have been one where GDP exceeded an expectation, e.g.) would read: “Variable X grew at Y% even as a reduction in government spending “cut”/”reduced” the variable by Z.”
An identity is an identitiy.
Don’t get me wrong – I like your site either way – but I’m glad to see an exception to your no “snark” or “put-down” blogging philosophy. Now I don’t feel as guilty for all the snark that I dish out…
Echoing the previous commenters, see Scott Sumner this morning on Phantom limb Keynesianism.
Could there be a Laffer Curve of government stimulus at work? With combined federal/state/local government spending as high as it is, could it be that the U.S. is past the Laffer hump in stimulus spending, such that any additional stimulus conterintuitively results in negative effects?
Granted the patient took a bullet wound to the chest. We all know that. But after we put 3 pints of blood in him he felt horrible and stayed in bed all day. Now weeks later he is starting to move around again after eating hospital jello every day in and out. From this we can only conclude blood transfusions make no sense at all and jello is where the future of health care is at.