Morgen on July 5, 2011 at 4:22 pm
This is not exactly news to anyone with a pulse, but it’s notable I think for such a prominent former member of President Obama’s economic team to be so blunt about the current state of the economy. This is Christina Romer, former Chair of the President’s Council of Economic Advisers, speaking at Washington University in St. Louis on April 12, 2011:
Romer, if you recall, was the author of that infamous report on what the anticipated effects of the Recovery Act would be on employment. You know, the one which included this chart:
Yeah, Romer ended up being just a wee bit off the mark with that forecast. But it’s nice to see a measure of honest analysis from her now that she is out of the Administration. However, I think she misses the mark in referring to the state of the economy as a “growth-less” recovery. Calling it a “recovery-less” recovery would be more accurate, especially for the many millions of Americans who are still looking for work or are otherwise dealing with the effects of the downturn. (And is there any better example of how disconnected from reality people like Romer are than how cheerfully she delivers her lines in this clip?)
It probably won’t surprise you to hear that Romer’s prescription for addressing the continued weakness in the economy is, you guessed it, even more stimulus. Yeah, another $2-3 trillion in deficit spending, and we’ll totally have this unemployment problem licked. Except for the inconvenient fact that we have already had an an additional $3 trillion in deficit spending since the stimulus, and if anything the economy seems to be headed back towards negative growth.
Lasting economic growth can only come from the private sector, which is the source of every single dollar of income generated within our society. The uncomfortable truth is that no public policy will likely make much of a positive economic impact in the near term, but the problems have only been exasperated by an Administration more focused on class warfare and the expansion of bureaucratic control over the private sector. I hope we do not have to wait until 2013 for the economy to really improve, but since it’s clear that the Administration has no intention of reversing course, the only hope for improvement is that it becomes evident sooner rather than later that the President will only be serving one term.
Bonus Clip. How many times have we heard defenders of the Recovery Act, and even the President himself, claim that they had no idea just how bad the economy really was before entering office? Well, this clip from a little later in the session with Romer suggests this is not as true as the White House would have us believe:
The truth as you can see is that Romer, as well as many other liberal economists at the time (e.g. Paul Krugman), were arguing for a much bigger stimulus. If you accept the premise that the Recovery Act was at least somewhat effective in mitigating the effects of the recession, as the White House and all its defenders must, then the stimulus was still a tremendous failure on their part. If it was effective, then millions of Americans have continued to suffer because the President did not have the courage or political will to push for a larger stimulus, even when some of his most trusted economic advisers were calling on him to do so. Or it was ineffective, in which case we dumped a trillion dollars of debt on future generations for virtually no lasting economic benefit. I happen to believe it’s the latter but either way this represents a historical-level blunder on the part of the Obama White House.