Christina Romer: Sorry, we just don’t have a clue on how to fix the economy – Video Update from Austan Goolsbee

Well, that’s reassuring. But it’s not like we didn’t warn you, over and over and over again. As cheery as she seems, speaking at the National Press Club yesterday she delivered a not so cheery forecast.

Dana Milbank at the Washington Post reports it this way:

It wasn’t the food; it was the entertainment. Christina Romer, chairman of President Obama‘s Council of Economic Advisers, was giving what was billed as her “valedictory” before she returns to teach at Berkeley, and she used the swan song to establish four points, each more unnerving than the last:

She had no idea how bad the economic collapse would be. She still doesn’t understand exactly why it was so bad. The response to the collapse was inadequate. And she doesn’t have much of an idea about how to fix things.

Then in typicalk left fashion, she nails the reasons for the continued economic recession.

“The United States still faces a substantial shortfall in aggregate demand… this shortfall in demand, rather than structural changes in the composition of our output… is the fundamental cause of our continued high unemployment,” Romer told the crowd at the National Press Club in Washington, D.C.

No kidding. No demand because people don’t have money to spend because they either don’t have jobs or they fear for their jobs because this administration still does not believe in stimulating the economy by getting out of the way. Indeed she has called for even more stimulus. Arghhhhh.

We have been telling for a year and a half that government spending cannot and will not stimulate an economy, only business can … and this administration has already painted them as the “evil rich”. You can not artificially stimulate demand … because when the government money runs out, it’s over, or you need to come back for more.

This is Dr Romer just a year and a half ago


Spot on I would say.

UPDATE: Just so you can compare and contrast. Just as Dr Romer told us in the above bite if we just stayed the economic course we would be just fine … here’s the lone remaining economist Austan Goolsbee with something that sounds very familiar from this week.


Maybe he was hoping we would remember what his boss said last year.

16 replies
  1. Lynn
    Lynn says:

    Oh Brother, Where art thou! Where did President Obama get these "experts" from and why can't they answer a simple question?  This administration can't seem to grasp that they are what's wrong with the economy. It's everyone else's fault but theirs. Must get rid of Democrat majority in both houses on November 2.

  2. winnie888
    winnie888 says:

    I love how Dr. Romer speaks as if she's addressing a freshman econ. 101 class.  Being all perky and smiley and positive…in the face of certain doom.  I notice that when she is unwilling to answer a question or says the president has been misinterpreted, she over-smiles and laughs inappropriately.  Makes me think she does not believe in what she's saying and may even be lying.  Just an observation.  Bottom line, I don't believe anyone in Obama's administration.  They've been too dishonest or misleading for far too long and they've lost all credibility with me.

  3. sammy22
    sammy22 says:

    I believe there is bill in the Senate (supported by the Admin) that might help: tax breaks for small businesses. I believe it's being held up by some Senators (R).

  4. Lynn
    Lynn says:

    Watched Cavuto today, he had a man on who owns a small tool & die business, and Cavuto asked him about this bill. The man said if you haven't made money in the last few years, tax breaks do nothing to help.

  5. TomL
    TomL says:

    Sammy could you please post some of the good points and the tax breaks of the bill that you feel help the small business owner so we can debate them.

  6. Dimsdale
    Dimsdale says:

    So what is she going to teach, "How to wreck an economy in 19 months"? "The New Voodoo Economics, liberal style"?  "Systemic Socialism in Seven Simple Steps"?

  7. winnie888
    winnie888 says:

    @Dims…whatever the title of the course, she'll teach it with a silly grin on her face, poorly timed laughter, and fabulous question-dodging skills!

  8. TomTGRWolcott
    TomTGRWolcott says:

    Wow, kinda sounds like what the possible DEATH PANELS could be like  Hmmmm


    Gee you know were are keeping an eye on the patient before we give him the

    medication just to make sure that he or she can breath and at least sit

    up right in the bed.  These day to day improvement things might just be

    the way to get the patient out of the hospital as quick as we can with out

    having to spend money on unneeded fixes to the patient.


    Yeah Okay Folks…Do you feel better now?


  9. Steve M
    Steve M says:

    @chris-os, Few people comment or point to what happened to federal income and corporate tax revenue after the 2001 and 2003 tax cuts.

    The DEFICIT numbers you pointed to in that graph is a DIRECT result of spending and has little to do with tax rates and how much money went to the feds. Read this please. Tax rates went down, more revenue went to the feds and they SPENT it all and more. Then, read this – my post last night referring to Milton Friedman … they will spend EVERY DIME and more that they get!

  10. sammy22
    sammy22 says:

    Seems that there are good tax cuts and bad tax cuts. The party in power gets to say which are good and which are bad. I suppose also there is good spending and bad spending which is also determined by the party in power, e.g. spending on Iraq War is good, spending on green energy is bad.

  11. Dimsdale
    Dimsdale says:

    "Good tax cuts" are general ones for everyone.  "Bad tax cuts" are targeted, usually to contributors and supporters or to enlarge a power base.  In my opinion of course.  Equally bad is making a good tax cut look like a bad one by lying about it being targeted, i.e. the "tax cuts for the rich" mantra.


    Spending on the war after the fact is certainly good, if it saves lives and speeds the end of same.  Green energy is not bad, but insistence that it can replace conventional power sources before they are anything resembling mature or efficient is.  Or taxing conventional energy sources to make them as expensive as green sources.

  12. Lynn
    Lynn says:

    Dimsdale, Nobody says it better than you. You are clear and concise. I hope you are writing speeches for the candidates in MA. We need every Right House and Senate and Governor seat we can get.

  13. TomL
    TomL says:

    Dims you wouldn't be saying that cap and tax is bad are you? How could that be after all didn't the young President say it's the greatest thing since sliced bread (my words) he wouldn't lie to get his way would he? Please say it isn't true.

  14. Dimsdale
    Dimsdale says:

    The president promised us the moon, but instead, he mooned us.


    My last sentence in my last post was, unfortunately, a bit vague.  It carried over from the preceding sentence, wherein I stated that the insistence that "green" power can replace conv. power before it is mature and ready to do so.  Taxes are bad when used punitively.

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