If I’d been asleep for the last decade and woke up to ABC This Week’s interview of Presidential economic advisor Austan Goolgbee, I would assume that Mitt Romney won the 2008 election, that he was predictably following Republican dogma about how to recover from a severe financial collapse and recession and that intelligent media folks like Christiane Amanpour were realizing those standard GOP policies aren’t working.
Goolsbee correctly told us that a smart economist wouldn’t get overly excited about one month’s jobs and growth numbers but would instead look at the overall trend. Of course what he wouldn’t want to concede is that GDP grew at a meager annual rate of 1.8 percent over the first three months of 2011 and so far was predicted to grow at only 2.8 percent for the next three. And the overall trend for job growth was still not enough to make a serious dent in unemployment unless you believe taking 5-10 years to get back to full employment is okay.
So Goolsbee was in denial from the opening moment because he didn’t have a decent story to tell even in his own framework. When Amanpour asked him what the Administration could or should be doing to improve conditions, he ticked off items you’d expect to hear from a typical GOP Presidential adviser: we’ve got to get the debt under control; we have a White House effort to identify and get rid of governmental regulations that are preventing the private sector from growing the economy; we should pass “free trade” agreements backed by the Chamber of Commerce; and we should leverage limited public dollars to release billions in private funding for investments.
Goolsbee’s bottom line: “It’s now up to the private sector.” That’s exactly what you’d expect from President Romney’s economic adviser.
It took Paul Krugman and Chrystia Freeland, over the absurd denials by Martin Regalia of the Chamber of Commerce, to remind ABC’s audience that business confidence and concerns about taxes and regulations aren’t the problem: business polls repeatedly show businesses aren’t expanding/hiring much because the demand for their products is weak. Demand is weak because the recession and the housing market crash depleted consumers’ wealth and they’re worried about losing their homes and jobs. You don’t need a degree in economics to grasp the logic of that. When private spending is still depressed, only government spending is keeping the economy afloat, and the stimulus is phasing out.
Goolsbee pointed to Joe Biden’s talks, but it’s blindingly obvious the Biden effort is counter-productive. Democrats should be demanding it be refocused on jobs or shut down.
Regalia’s main talking point, completely unsupported by theory, logic or facts, is that the economy would boom if only the government would “get out of the way.” It’s a wonderful myth if you’re fronting for Wall Street, trying to defang the puny financial regulations from Dodd-Frank, and think the greatest threat to Wall Street’s continued looting is Elizabeth Warren. But we should remember the “get out of the way” mantra the next time Wall Street self immolates, tanks the economy and a former Goldman Sachs CEO become Treasury Secretary gets on his knees to beg Nancy Pelosi to bail out every major Western bank on the planet.
I’m sure I imagined all this. The country wouldn’t possibly be dumb enough to elect an unprincipled moral chameleon like Mitt Romney President. And we’d never put up with someone as defensive and unconvincing as Goolsbee was today, though we’d wonder how the voters got taken.
No, that couldn’t be real, so when I really wake up, I’ll let you know what the adviser for the actual Democratic President said today about the sagging economy and the undefensible unemployment numbers.
More: DeLong, citing Mark Thoma, asks, “where is Plan B?”