Christina Romer says that we need a higher growth rate to reduce unemployment.
In related news, the Pope remains Catholic.
[Update a while later]
Good riddance, Christina Romer:
The ordinary function of government is to destroy talented people, but Romer’s epic failure has an additional element of tragedy. As an economist, Romer did an excellent job [pdf] of establishing that New Deal stimulus failed to end or seriously mitigate the Great Depression. As an Obama team player (and poignantly, a sunny supporter of the then-senator’s campaign), she made a 180-degree turn toward pro-stimulus hocus pocus. Romer will be remembered as the main advocate of the mythical “multiplier” phenomenon, in which every federal dollar spent producers more than 100 pennies worth of economic activity. This is the kind of economics you’d expect to hear from a fine arts major.
I wonder what she’ll say in the future? This reminds me of so many smart people who, after leaving NASA, say things like, “…how could I have made that decision”?
She’s going to be teaching a class at Berkley, “Avoid controversy by stating the obvious.”
I wonder if it includes the difference between tax rate and revenue rate?
Is this another one of those Chance-the-Gardener moments from that movie “Being There”?
Hey, give her some credit. She seems to grasp at least a sliver of economic reeality, which is more than you can say for her boss and the rest of his team. In the country of the blind, etc.
Do you know Raphael? I have a message for him.
It isn’t at all clear that anyone else in charge understands this. It isn’t even clear that they care about unemployment.
Whoops! Good-bye, Ms. Romer! That’s what you get for showing even a sliver of common sense when you work for “Il Dufe”!
One of the articles announcing this said she didn’t have the ear of the President. Would anyone be surprised if Obama never talked to her? (Especially in light of how long he took to talk to Gen McCrystal and the CEO of BP)
The money multiplier is a valid way to stimulate the economy but it is highly dependent on what the money is spent on.
States that spend money on stocking lakes with fish enjoy a significant money multiplier effect.
The feds giving states money to help with teacher’s salaries doesn’t do much to stimulate the economy because teachers salaries don’t drive any industries.
My take is that we’ll see a lot of people leaving by November. Some will leave because they like Romer are deeply associated with the failure of the last two years. Even if it doesn’t save the House from the Republicans, it might save a Democrat or two. Other people will simply be distancing themselves from what’s going to be an ugly period of the Obama administration when it has to deal with at least partial Republican control of Congress.
How come we always hear about Keyne’s multiplier when it comes to spending, but never hear about it when it comes to the retarding effect of taxes and regulations? If you have one, you have the other.
Oh, she is a member of academia, that explains everything.
Obama says, “You promised that putting all the stimulus money into “saving” the jobs of teachers, police, and other public officials would fix the economy!”
Romer replies, “I told you want you wanted to hear so I could get an ‘A’, like any academic.”
Obama responds, “I am an academic….”
Romer concludes, “Exactly.”
ASEI, Romer actually covered that in her 8% unemployment paper. Turns out that government spending has 2-3 times as much effect (“multiplier”) as cutting taxes. Honest.
Karl, Where’s your sarc tag?
taxes were cut heavily by Bush the younger. Hiring didn’t move.
taxes were cut heavily by Bush the younger. Hiring didn’t move.
We also had a big terrorist attack, two wars, and excessive government spending. Plus, the Bush era got to enjoy the wrong end of the dotcom generated recession. That means both considerable uncertainty for hiring purposes and misallocation of economic resources.
I wonder, once again, if there is a way to treat your BDS, jack? Maybe stop blaming every conceivable thing on Bush? I think you should try it for a month and see if your mental attitude improves.
jack* writes: “taxes were cut heavily by Bush the younger. Hiring didn’t move.” Yeah, like that’s the real reason “liberals” don’t like cutting taxes.
*Full name probably something like “jackofftostatism”
taxes were cut heavily by Bush the younger. Hiring didn’t move.
Wrong. Unemployment went from 6.3 to 4.4 in 3 years. Whether Bush caused your breakdown and subsequent loss of sanity I don’t know or care. But his ’03 tax cuts led to unemployment levels equal to essentially full employment.
“his ‘03 tax cuts led to unemployment levels equal to essentially full employment.”
This is what makes Dem’s upset. When everyone is busy with a job no one has time to fill out all the paper work to apply for gov’t entitlements.