Would we want to go back?

I was exchanging thoughts on Obama's economic policy on a bulletin board recently, and I explained in my usual civil but forceful fashion why that policy seems to me to be incoherent. It was roughly the same explanation I gave here.

Anyway, one of the more conservative posters on this particular board told me that Obama's incoherence is intentional, because Obama doesn't want us to get back to "where we were in 2007."

There are two distinct implications there: first, that Obama is deliberately sabotaging the economy; second, that we were in some wonderful condition in 2007 which, were he not a saboteur, he would wish us to recover.

Although his policies ARE incoherent, I think both halves of that accusation are wrong. Allow me to focus on the second of them. It does seem to be a widespread attitude that a boom is good, the upward rise of a stock index is good, price increases are not good (unless you're the one charging them) but are tolerable when wages are increasing, and so forth. The upswing of a business cycle represents something desirable, and when you're on the downswing you want to get to the restoration of the upswing. (If you're a Democrat, you'll want us to get back to 1999 -- if you're a Republican, 2007).

The problem, though, is that this is akin to a desire to get right back to drinking because the hangover hurts. The boom and the bust are two aspects of the same fact, and what we should aim at is an escape from the cycle.

The "good cop" and the "bad cop" are both on the same side. If you are ever unfortunate enough to be the suspect under interrogation, it would be well to remember that.

Bubbles burst because they have been blown, and the pain caused by the burst is pain that was made necessary in the supposedly good times, the times when the bubble was being blown.

The next time the Dow gets to 14,000, I like to think it will be the result of a slow and steady rise produced by real growth NOT artificially induced by the sort of stimulus that guarantees a heck of a hangover the next morning. Let's learn better from THIS one.

Yet, alas, recent developments indicate to me that we will not and have not.

By the way, one word about my tags below. I use "Barack Obama" as the tag for discussions of the President. I don't use "President Obama." Why not? Because when I wrote the earlier of my posts about him, he was not President and now that he is, I've decided to keep the old tag for the sake of consistency. Mystery solved.