Thursday, June 9, 2011

Wow. Just wow.

- by New Deal democrat

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...

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.
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.

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.

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 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?

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.