Economic forecasting is difficult. Famously, when saying the American Recovery and Reinvestment Act the Obama administration both understated the baseline state of economic problems and overrated ARRA’s efficacy. Conversely, real business cycle theorist and New York Times contributor Casey Mulligan spent October of 2008 saying:
Barring a nuclear war or other violent national disaster, employment will not drop below 134,000,000 and real GDP will not drop below $11 trillion. The many economists who predict a severe recession clearly disagree with me, because 134 million is only 2.4% below September’s employment and only 2.0% below employment during the housing crash.
Now I think Mulligan would say that the long slow recovery is thanks to the Obama administration’s policies delivering a negative “real” shock to economic output. And the crash itself he would perhaps (like many conservatives) attribute to Joe Biden’s use of his well-known time travel problems to ensure that Obama policies enacted in the Spring of 2009 would actually take effect during the previous autumn. The interesting thing to note here is that by this logic Obama-era policymaking has not just been miguided, but comparable to a “nuclear war or other violent national disaster.” Maybe that’s a damning analysis of the performance of Obama and the 111th and 112th congresses, but I’d say it says something about the underlying model.