Editore"s Note
Tilting at Windmills

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December 13, 2009

STEERING CLEAR OF ECONOMIC 'SUICIDE'.... There's been no shortage of talk in recent weeks about shifting the economic focus away from recovery efforts and towards deficit reduction. About two weeks ago, for example, a Washington Post report suggested President Obama and his team want to spur job growth, but they're principally concerned with keeping the deficit in check.

Since then, we've seen ample evidence to the contrary. The president, this week, said, "[I]f we can't grow our economy, then it is going to be that much harder for us to reduce the deficit. The single most important thing we could do right now for deficit reduction is to spark strong economic growth, which means that people who've got jobs are paying taxes, and businesses that are making profits ... are paying taxes. That's the most important thing we can do."

This morning, leading members of the White House economic team agreed that job creation and economic growth have to take precedence.

President Barack Obama's top economic adviser says creating jobs takes priority over reducing the country's red ink in the next year.

Larry Summers says priority No. 1 must be getting people back to work and lowering the country's 10 percent unemployment rate.

Summers says only then can the Obama administration begin working to reduce the deficit -- a problem he blames largely on the Bush administration.

Specifically, Summers told CNN that "there's no more important issue facing the country than job growth." Republicans, obviously, have made clear they prefer to focus on the deficit they created, but I'm heartened to hear the administration argue otherwise.

A White House economic adviser says it would be "suicide" for the government to focus exclusively on the deficit when the economy is sorely in need of jobs.

Christina Romer says money freed up from the repayment of financial bailout funds gives the government the leeway to try to boost employment while seeking to control the deficit over the longer term.


Steve Benen 11:10 AM Permalink | Trackbacks | Comments (18)

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Comments

If you get more unemployed people back to work, won't that increase the production of so-called "greenhouse gases"?

If "global warming" really was a serious concern fro liberals, they would want more unemployed, not less.

Posted by: Al on December 13, 2009 at 11:18 AM | PERMALINK

I think yer probably right, Al -- in your own way -- but thanks to Matt Taibbi and others, the Stepford economists are having to back off their normal route to ignore the citizenry for the corporations.

Now let's talk about millions of GREEN jobs...and make Al Gore fabulously wealthy -- hah ha ha...

And we'll hafta watch Obama's minions and Congress like hawks. The sucky House bill on "finance reform" was a dead give away to the Banksters...

Posted by: neill on December 13, 2009 at 11:27 AM | PERMALINK

Thank whatever that the adults are in charge.

We have ample evidence on how the economy works (like 1937), but there are always the noisy know-nothing that value their talking points & gut feelings more than fact. Usually, their gut hates anything liberal, I've noticed.

Speaking of know-nothings, Al, I don't think that you are a parody anymore, but it's hard to tell. Considering the arrogant insanity of the Republican side, parody is harder and harder to achieve. Al, which party has always been in favor of more and better payiong jobs? I'll give you a hint, it's not the Republican party, they have preferred for their greedy leaders to profit more from slave wages & looting the national treasury.

So I know it falls on deaf ears, but don't insult us with your stupidity, Al. We know that green jobs will provide good wages and lessen our dependence on unstable, anti-American countries. You, on the other hand, unless you are a multi-millionaire, are and idiot for supporting the Republicans or Teabaggers.

Posted by: BuzzMon on December 13, 2009 at 11:33 AM | PERMALINK

A White House economic adviser says it would be "suicide" for the government to focus exclusively on the deficit when the economy is sorely in need of jobs.

That's a chance we're willing to take.

Posted by: Your Friendly GOP on December 13, 2009 at 11:46 AM | PERMALINK

The notion that all the Federal government needs to do is balance its budget around some vast kitchen table set up on the Mall, and all will be well, is not going to die that easily.

A simple, easily understood bad idea has incredible staying power. What's interesting is the inevitable clash between two simple, easily understood bad ideas.

The trade-offs -- in the form of tax cuts, naturally -- required to get any further stimulus through Congress require the simultaneous belief that tax cuts don't increase the deficit.

Posted by: Davis X. Machina on December 13, 2009 at 11:47 AM | PERMALINK

require[s] the simultaneous belief that tax cuts don't increase the deficit.

That's a belief we're willing to accept.

Posted by: Your Friendly GOP on December 13, 2009 at 11:55 AM | PERMALINK

Almost all of the "green shoots" and "recovering economy" rise in GDP from the last couple of months can be attributed to "Cash for Clunkers", a SMALL, nay, a PITTANCE of a stimulus program of $3 billion directed at helping American people rather than large banks and wealthy people.

So far, the government has given $12.2 trillion dollars to the "banks" and $1.8 trillion dollars as more direct aid to Americans. Nomi Prin's latest numbers are available here:

http://www.nomiprins.com/bailout.html

You see, the real problem is much more than a bunch of messed up Senators and Congresscritters that are JUST NOW claiming they need to balance the budget they blew under Bush II from 2000 to 2008. The real problem is that the $12.2 trillion given to the Wall St banksters is just being used as Christmas bonuses for big bankers, and otherwise it's GONE, BABY, GONE. For ONE TENTH of that $12 trillion the government could have bought every home mortgage in trouble. For another ONE TENTH, we could have paid for health care reform for a DECADE.

The real question isn't if the government needs to provide stimulus - that's a no brainer. The question is when will the government - namely Larry Summer, Tim Geithner and Ben Bernanke decide to provide stimulus to the American people? I don't think we can revive the American economy by making all of the U-6 17% unemployed work as gardeners and maids for the Wall St banksters. So maybe it's time for some real stimulus which benefits the American people rather than throwing more TENS OF TRILLIONS to the fuckheads that smashed the world's economy. Those people should be IN JAIL, not handing out hundreds of billions in bonuses.

Posted by: Glen on December 13, 2009 at 12:08 PM | PERMALINK

On THIS WEEK, Stephy mentioned to Eric Cantor that he and his fellow Republicans ALL voted AGAINST the stimulus legislation, AGAINST the healthcare reform legislation, and AGAINST the financial reform legislation, and asked him if the economy starts to recover over the next year are you prepared to give the Democrats ALL the credit ?

Cantor provided the classic dear in the headlights response.

Posted by: Joe Friday on December 13, 2009 at 12:52 PM | PERMALINK

Can we get a fact checker to sit next to George Will every time he appears on TV ?

During the roundtable on THIS WEEK, Will claimed:

"People disagree as to why the New Deal failed to cure unemployment."

The New Deal cut the more than 25% Unemployment Rate in HALF:

NEW DEAL

People disagree as to why George Will is an idiot.

Posted by: Joe Friday on December 13, 2009 at 1:13 PM | PERMALINK

koreyel's counter-intuitive political aphorism

When a country has become ungovernable, nothing matters more than getting reelected.

Glad to see the Administration hears the rumbling of this thundering elephant herd bearing down on them at full gallop. Obviously the republicans will filibuster any jobs solution. Their goal is to exacerbate unemployment and create a climate that favors their ascendancy. So this Dem Administration must use TARP funds if necessary. Whatever it takes. Realize you are in a war to the death with a herd of rogue Republicans. Sure they will hit you for using TARP funds. They might even have a point. But who cares? Failing to ameliorate unemployment has far worse electoral consequences. So just do it.

Nothing matters but securing a second term for Obama. If someone like Palin should defeat him, the right wing will be very tempted to set up a dictatorship. It is in their blood, and their blood is boiling right now. They are a dangerously dumb and vile party. Their continual defeat should be all that matters to true patriots of the American experimnent...

That's all the politics any of us need to know.

Posted by: koreyel on December 13, 2009 at 1:16 PM | PERMALINK

koreyel: "That's all the politics any of us need to know." YES!!!
Plus, of course, the rest of the comment!

Posted by: jean on December 13, 2009 at 1:46 PM | PERMALINK

The dems need to take small, symbolic steps towards deficit reduction at this time. There were opportunities to do this in the 1.1 trillion dollar spending bill that just passed. Federal employess do not need a 2% raise in this time of high employment. They should be happy to have a well paying job with good benefits, including a pension which is becoming rare. I don't know how much this raise costs the govt, but the money would be better spent to extend unemployment benefits or towards new jobs. Reducing pork spending would be good politics as well. And does NASA really need a big increase in this economy?

Posted by: laurie on December 13, 2009 at 3:55 PM | PERMALINK

If BushCo had not enabled the rise in the debt (Cheney: "Reagan taught us deficits don't matter"), then we could more easily use deficit spending during the crisis. It *is* important to balance the budget more or less: during normal times, the better to handle real emergencies, wars (valid ones we hope) etc. But the Republican "personal responsibility" crowd doesn't want to think about how BushCo left bad choices for everyone about almost everything, just demand that Obama be just the kind of Messiah that they like to make fun of.

Posted by: neil b on December 13, 2009 at 4:12 PM | PERMALINK

This is the Christina Romer whose research has found that the best way to restore growth is to reduce taxes and spending (http://www.nytimes.com/2009/12/13/business/economy/13view.html?_r=2)?

Interesting advice!

Posted by: hank on December 13, 2009 at 4:39 PM | PERMALINK

If we are to reduce the deficit we need to collect more taxes (or quit fighting wars). Republicans get the vapors when the word "tax" is mentioned; that means the only way to increase tax revenues is by an increase in the number of people working. Hence we need a jobs program. This is not rocket science.

Posted by: Tired liberal on December 13, 2009 at 6:04 PM | PERMALINK

hank,

"This is the Christina Romer whose research has found that the best way to restore growth is to reduce taxes and spending (http://www.nytimes.com/2009/12/13/business/economy/13view.html?_r=2)?"

Except cuts in federal income tax rates have NEVER stimulated the national American economy, NEVER created a net increase in the American workforce, and NEVER brought in increased federal income tax revenue.

Posted by: Joe Friday on December 13, 2009 at 11:06 PM | PERMALINK

Thanks for the post and for sharing the very resourceful information here, great post.

Posted by: Tag44 on December 14, 2009 at 5:51 AM | PERMALINK

If we use some of the excess labor to build an infrastructure that replaces fossil fuels with renewables, then the long run can decrease CO2 emissions.

If labor can be paid today to perform work that will reduce energy costs in the future, it makes sense to borrow against the future energy costs savings to create Jobs today. This is how return on investment is supposed to work. Only ideologues believe that government does not have a role in investment in infrastructure.

Posted by: bakho on December 14, 2009 at 8:40 AM | PERMALINK




 

 

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