The Job No One Wants: Defending Obama’s Job-Destroying Economic Policies

June 7, 2011

Fresh Off Bad Economic News, Obama Economic Advisors Continue to Exit

With unemployment staying at record levels and families struggling, it’s quite clear two and a half years into the Obama presidency that his economic policies have been a job-destroying failure.
The top Obama economic officials charged with defending these policies continue to exit the administration as they see Obama’s policies fail.
The White House reaction to this exodus has been to offer more of the same policies—policies panned by Obama’s own former top economists.

BACKGROUND:

Among the bad economic news out last week, one unfortunate statistic attracted limited notice: the average duration of unemployment has hit a new all-time high since it was first tracked in 1948:

CNN: “Long-term unemployed I: Average length of unemployment hit longest amount on record (going back to 1948) of 39.7 weeks.” (Lisa Desjardins, “Cheat Sheet: Unemployment Report,” CNN, 6/3/2011)

EVEN OLD BLS METHOD SHOWS RECORD UNEMPLOYMENT DURATION: “By BLS [Bureau of Labor Statistics] method used before 2011, avg jobless duration in May would have been 36.8 weeks…” (Tweet from Bloomberg Businessweek Economics Editor Peter Coy, 6/3/2011)

With news like that, it’s little surprise that President Obama’s top economic advisor Austan Goolsbee announced his departure from the administration, making him the fourth top Obama economic official to exit:

YET ANOTHER OBAMA ECONOMIC ADVISOR OUT THE DOOR: “Austan Goolsbee, chairman of the White House Council of Economic Advisers, plans to resign this summer to return to teaching economics at the University of Chicago this fall, a Democratic official said Monday.” (Mike Allen, “Goolsbee to Leave White House,” Politico, 6/6/2011)

GOOLSBEE THE FOURTH ECONOMIC ADVISOR TO EXIT: “Three other top Obama economic advisers already have departed. At the CEA, Goolsbee replaced Christina Romer, who returned to teaching at the University of California at Berkeley last September. National Economic Council Director Lawrence Summers and Office of Management and Budget Director Peter Orszag left the administration last year. Summers returned to Harvard University and Orszag is now vice chairman of global banking at Citigroup Inc.”(Hans Nichols, “Obama’s Chief Economic Advisor Returns to University of Chicago,”Bloomberg, 6/7/2011)

The change, however, leaves no economists left on Obama’s “core economic team” at a time when Obama has discontinued his daily economic briefing, an event debuted to much fanfare to showcase his focus on the economy:

NO ECONOMISTS LEFT: Austan Goolsbee, a longtime adviser to President Obama and the only economist left on his core economic team, plans to leave as chairman of the Council of Economic Advisers by September after a year in the job to return to the University of Chicago.” (Jackie Calmes, “Goolsbee Leaving as Top Economic Advisor,” The New York Times, 6/6/2011)

“DAILY ECONOMIC BRIEFINGS DISAPPEAR FROM WHITE HOUSE SCHEDULE”:“At some point during the first two years of his administration, President Obama stopped receiving the daily economic briefing that he requested when he took office.

“Former White House press secretary Robert Gibbs announced at his own first daily briefing reporters that Obama asked for the daily economic briefing, described then as comparable to the daily intelligence briefing the president gets every morning.” (Sam Youngman, “Daily Economic Briefings Disappear from White House Schedule,” The Hill, 6/6/2011)

OBAMA CONTINUES TO BE MYSTIFIED BY BAD NEWS: “We don’t know what happened yet with this particular blip.” (Matt Negrin, “Obama Finally Addresses Jobs Data,” Politico, 6/6/2011)

Here’s a hint: Democrats from the White House on down are continuing to push the same job-destroying policies they were advocating two and a half years ago:

OBAMA STILL PUSHING NEW “INVESTMENT” AS PANACEA: “Cantor said the president pushed them on his theme of investment in the future, but Cantor said ‘to a lot of us that’s code for more Washington spending, and that’s something we can’t afford right now.'” (Russell Berman, Sam Youngman, and Molly K. Hooper, “Ryan to Obama: Leadership Should Come from the Top,” The Hill, 6/1/2011)

AND MORE TAX HIKES ON FAMILIES AND JOB CREATORS: “Asked later by The Hill if Obama had signaled any willingness to bend on taxes, Cantor laughed before saying, ‘No.'” (Russell Berman, Sam Youngman, and Molly K. Hooper, “Ryan to Obama: Leadership Should Come from the Top,” The Hill, 6/1/2011)

The administration’s job-destroying economic policies have met resistance though from the very economic advisors who were once charged with selling them:

FMR WHITE HOUSE ECONOMIST CHRISTINA ROMER: TAX INCREASES HAVE A “HIGHLY SIGNIFICANT NEGATIVE IMPACT” ON ECONOMY: “[T]ax increases appear to have a very large, sustained, and highly significant negative impact on output. Since most of our exogenous tax changes are in fact reductions, the more intuitive way to express this result is that tax cuts have very large and persistent positive output effects… Our baseline specification implies that anexogenous tax increase of one percent of GDP lowers real GDP by almost three percent.” (Christina D. Romer and David H. Romer, “The Macroeconomic Effects of Tax Changes: Estimates Based on a New Measure of Fiscal Shocks,” American Economic Review, June 2010)