I love this line from the article “We don’t have alternative universe laboratories to run control bailout experiments,” (if only…)
Then he goes on to say “but we can imagine the alternative outcomes if different actions were taken.” With “imagine” being the operative word. Without the “alternative universe laboratories” we can only “know” what is actually happening.
Within my circle of close friends and family (admittedly not a large sampling), I don’t know of anyone who’s life has been “ruined” because of the financial meltdown and the steps that were taken to control it. Considering that 2 years ago there were predictions of complete financial meltdown, chaos, anarchy, great depression, etc., I consider “The” stimulus to have been successful, but I will concede that another type of stimulus could have been “more” successful.
Another line from the article, “The net result of this would have been more turmoil, lower stock prices, and a sharper, but much shorter economic contraction. It would have been painful and disruptive — like emergency surgery is — but its better than an exploded appendix.” I find a bit optimistic. I don’t think he’s taking into account the possibility of true “panic” that might have occurred had there been more turmoil and lower stock prices.
Personally, (and as someone who never made it past Econ 101) I was comforted by the thought of the government pouring money into the economy (I was vaguely aware of the downward deflationary spiral concept). I realize most of the money went to save the banks, but my mind was focusing up on the fact that teachers, policemen, firemen, government workers etc. would be keeping their jobs, and that unemployed people were getting their unemployment benefits extended.
So I guess what I’m saying is that in my opinion, “The” stimulus was more of a psychological stimulus and not something that can be proven with charts and graphs.
