Via Not Atrios and Sideshow, yesterday this astonishing exchange between departing White House economic advisor Austan Goolsbee and Steven Colbert came to light:
Goolsbee: [00:25] The fact is, we've known about these long run fiscal issues for forty years. We should address them, we must address them. But don't forget that the most important problem we face as a country is that we grow. And so cutting the things we need so that we can remain the richest country in the world five years from now...In case you missed it, that was the chief economic advisor to a "democratic" President refusing to disagree that government programs never created even one job, to the sputtering incredulity of his comic interlocutor.
Colbert: [00:40] But the government's never created one job.
[Pause, Goolsbee looks down, he does not respond but gives a slight shake of the head.]
Colbert: [00:44] The government can't create jobs. That's an accepted maxim.
Goolsbee: [00:48] O.K., that maxim -- we're not objecting in Phase II...
Colbert [surprised, speaking quickly]: You agree? You agree with that?
Goolsbee: In Phase II as we move out of the rescue phase...
Colbert [continuing to be surprised]: You're agreeing that the government has never created one job.
Goolsbee: In rescue mode, we saved a lot of jobs.
Colbert: So you didn't create one.
Goolsbee: Uh, look, what I will say is in Phase II our...
Colbert: [01:05] No, no, they never created any jobs.
Goolsbee: ...our providing incentives to get the private sector to stand-up. We want the private sector to stand-up. We want the private sector to do the creation of the jobs.
Colbert: That's what they always do.
Goolsbee: That's what we want them to do.
Amazing. FDR must be spinning in his grave. Apparently the 6 million CCC and WPA jobs that helped lower the Great Depression unemployment rate from 24% to 10% were illusory.
Which reminded me of one of the most jarring quotes I've ever read from Barack Obama (h/t nada lemming ), which is found on this transcript from the official White House website of an Obama speech to Congressional democrats in February 2010:
[L]et me start by saying we always knew this was going to be a difficult year to govern -- an extraordinarily difficult year to govern. We began 2009 with a financial system on the brink of collapse, an economy bleeding nearly 700,000 jobs per month, a $1.3 trillion deficit, and two wars that were costly in every sense of the word. We knew that solutions wouldn't come easily or come quickly. We knew that the right decisions would be tough and sometimes they would be unpopular. And we knew that we might have to make them sometimes without any help from our friends on the other side of the aisle.That is as explicit an embrace of "trickle down" economics as you are ever going to see. Well, eighteen months later, it isn't clear that the Obama policies have "worked" or "broken the back" of Hard Times at all. So exactly why does Obama believe that "grabbing ... New Deal policies," and in particular a new WPA (that Bonddad and I were the first to propose, before the idea was endorsed by Profs. Reich, Thoma, or Krugman) wouldn't work?
But we made those decisions. We led. Those actions prevented another Great Depression; they broke the back of a severe recession. The economy that was shrinking by 6 percent a year ago is now growing at nearly 6 percent one year later.
….
So the point I'm making -- and [Senator] Blanche [Lincoln] is exactly right -- we've got to be non-ideological about our approach to these things. We've got to make sure that our party understands that, like it or not, we have to have a financial system that is healthy and functioning, so we can't be demonizing every bank out there. We've got to be the party of business, small business and large business, because they produce jobs. We've got to be in favor of competition and exports and trade. We don't want to be looking backwards. We can't just go back to the New Deal and try to grab all the same policies of the 1930s and think somehow they'd work in the 21st century.
So Blanche is exactly right that sometimes we get ideologically bogged down. I just want to find out what works ....
That "New Deal policies" were rejected out of hand, and neoliberal conservative talking points endorsed, is exactly why Obama's economic performance is being rejected by the majority of Americans, and his Administration is on the verge of failure.
9 comments:
his Administration is on the verge of failure.
Wow, that's a stronger statement than I've ever read here. I don't agree, nor do I disagree. I guess since I don't see anyone better out there to run the country, my hope is that the slowdown we're entering only lasts through Q4 and by Q1 we bounce back, at least through the election. Because as bad as his economic ideas have been, I don't want us to elect someone who thinks that defaulting on the national debt, eliminating Medicare, etc. are the way to go.
What I would say is that I hope you and bonddad also start looking at the fundamentals of energy - particularly oil depletion - and how that might permanently limit growth in the long term (i.e. later this decade and onwards).
“...eighteen months later, it isn't clear that the Obama policies have "worked" or "broken the back" of Hard Times at all.”
WOW! I’m going to have to stop bad-mouthing you guys in the comments section over at ‘The Economic Populist’.
For about a couple of years now you have been ‘mocking’ (not simply disagreeing with ) people as ‘doom and gloom’ when all we have been saying is that all those ‘up-trend line’ charts you were posting were recording wealth that was NOT "trickling down" to people whose standard of living is based on wage income.
Welcome back to the blue-collar world – we missed you.
Tom
Just to follow up:
1. I haven't changed my opinion that we are in a recovery, that Oil is a choke-collar, and that we are likely to have a 2 quarter slowdown or stall, but not a double dip.
2. Nevertheless, if there is no further significant improvement in the next 12 months, Obama's re-election is a very dicey proposition.
3. Even if Obama gets re-elected in 2012, if there is still a 9% U-3 unemployment rate, his Administration will still have been a failure.
4. If the economy gets any worse than I think it will get, he is in real trouble. In other words, he has no margin for error left.
Just to back up NDD here, this blog has been intellectually consistent. They have, from the get go, been avid backers of strong government stimulus as the solution to the recession. They've also been routinely critical of the administration on this topic.
In terms of the "doom and gloomers" there main beef has been people who continue to say things are bad and getting worse when all of the actual data suggests otherwise. Yes there are still significant structural flaws in the economy (too big to fail banks, etc), but ultimately the policies that have been enacted have somewhat helped things. Just not enough.
I'm in the middle myself. I think to deny that things have turned around is a bit crazy, but I question how sustainable all of it is. Many of the problems that existed prior to this recession still exist, and little has been done to address it. The frightening thing is that this little excerpt from Goolsbee suggests that nothing is going to get done.
I went and listened to the entire Colbert interview, which I highly recommend. I came away not quite as disturbed as I was while reading the excerpt and "New Deal democrat" comments.
Tom
Please check your self-congratulatory dancing at the door.
The recovery has been underway for nearly two years now. While job growth has been weak, that does not mean nearly two years of economic growth can be swept under the rug. I should also add that you've completely missed the resurgence of American manufacturing and exports because they don't fit into your "sky is falling" theme.
This blog is where grown-ups talk and discuss matters. Please return to the kiddie table and let us finish the conversation. If you're good, you can watch Disney later. Now shoo.
Bonddad,
Nice talk!
As I said, for about two years this blog had spoken in “mocking tones” about people who DID NOT “completely miss the resurgence of American manufacturing and exports because they don't fit into our "sky is falling" theme.”
These are examples of what I characterized as “ ‘up-trend line’ charts you were posting which were recording wealth that was NOT "trickling down" to people whose standard of living is based on wage income.”
Did I say something that is not true? I was agreeing with NDD – albeit in a pun format. Sorry you took offense.
Having said that: Do I still have to “shoo”?
Tom
Dear Tom
If only I possessed your insight, analytical skill and ability, then one day I might be able to discern small parts of the economic truth. But, alas, your knowledge base and skill set is far superior to mine. I beg -- beg I say -- forgiveness at the feet of an obvious economic master in the hopes that one day I might actually achieve but a modicum of your brilliance.
Tom:
I was not offended by your comment. All I ever ask is that criticism be fact-based.
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