Monday, August 15, 2011

"The best way to get people back to work...is through more government spending"

Can't Democrats get out in front of this guy?
Jared Bernstein, the former chief economic advisor to Vice-President Joe Biden, suggests that the best political strategy for President Obama regarding government spending and the jobs crisis is to simply tell the truth:
There’s an article in today’s NYT on the economic debate within the White House.  The print version—not the online one—contains this quote from an admin official:
“It would be political folly to make the argument that government spending equals jobs.”
Really?  I mean, I get the reluctance, and certainly the “spending=jobs” frame, while essentially correct, may not be the right way to frame it.

But in fact, the best way to get people back to work right now, with consumers weakened and investment on the sidelines is through more government spending…it should be targeted and temporary, but jeez, the President himself has been making this point, and correctly pointing out that R’s are blocking him on it.
Far be it from me—I mean this—to advise the politicals as to what works.  But I simply don’t believe it is “political folly” to tell the truth on this critically important point.
From the New York Times article in question, it appears that there's not much agreement with Bernstein inside the current White House:
As the economy worsens, President Obama and his senior aides are considering whether to adopt a more combative approach on economic issues, seeking to highlight substantive differences with Republicans in Congress and on the campaign trail rather than continuing to pursue elusive compromises, advisers to the president say.

Mr. Obama’s senior adviser, David Plouffe, and his chief of staff, William M. Daley, want him to maintain a pragmatic strategy of appealing to independent voters by advocating ideas that can pass Congress, even if they may not have much economic impact...

“The president’s team puts a premium on being above the partisan fray, which is usually the right strategy,” said Senator Charles E. Schumer of New York, the No. 3 Democrat in the Senate. “But on this issue, when he knows what the right thing to do is, and when a rather small group on one side is blocking any progress, you have to be willing to call that group out if you want to get anything done.”  ...
A wide range of economists say the administration should call for a new round of stimulus spending, as prescribed by mainstream economic theory, to create jobs and promote growth. It is clear that the House would never pass such a plan.

But Christina Romer, who stepped down last year as the chairwoman of the president’s Council of Economic Advisers, said Mr. Obama should fight for short-term spending in combination with long-term deficit reduction.

“Playing it safe is not going to cut it,” said Ms. Romer, a professor of economics at the University of California, Berkeley. “Not proposing anything bold and not trying to do something to definitively deal with our problems would mean that we’re going to have another year and a half like the last year and a half — and then it’s awfully hard to get re-elected.”

But there is little support for such an approach inside the administration. A series of departures has left few economists among Mr. Obama’s senior advisers. Several of his political advisers are skeptical about the merits of stimulus spending, and they are certain about the politics: voters do not like it. 
This is a bleak picture - both in terms of the realities the President faces in an obstructionist GOP and the economic debate surrounding even the Oval Office being framed in terms of deficits rather than jobs.  Former administration advisers Romer and Bernstein - along with Larry Summers, who has also recently called for more spending to create demand and stem unemployment - seem to reflect the fact that being outside of the White House bubble clears one's head of the political timidity that characterizes Beltway insiders and professional campaign consultants.  One can only hope that the President chooses to act independently of his consultants and chooses a bolder path.

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