Economists, meteorologists and psychics are occupations who can forecast future events and when those events fail to materialize, are not blamed. Everyone knows that you cannot forecast the future, right? Well, the vaunted ones who have lead Obama's Economic Team have ALL bailed. Not one of the "super-econs" are still there. All have resigned and gone onto greener pastures like academia or think tanks.
Probably the most memorable is Christina Romer who forecasted that the unemployment rate would never rise above 8% if Congress passed the Stimulus. It hit 8% and did not stop until it had eclipsed 10%. Hey, that's only a little more than a 25% miss! You remember they say, you can't forecast the future!
Why have these economists all missed the mark? My opinion is that they come from the wrong point of view. They believe in big government solving the issues facing the country. These type of solutions have never worked, in fact, there are those who believe the Great Depression was extended by years by the passage of Roosevelt's legislation, the New Deal. The same has occurred in our present severe recession.
When government spends money to provide temporary jobs, it does not create anything. For example, I had to laugh when Obama talked about all the "shovel ready" jobs that were going to be created by his jobs program. The jobs that were being created went to people who already were in the construction business, therefore they were no new jobs. In fact, even though I grew up on a ranch and can run tractors and the like, I would never be hired to run a bulldozer, steam roller, grader or paver as I do not have experience.
Another interesting part of the Obama road program is occurring outside my office. They are rebuilding the road which carries an immense amount of traffic. The existing concrete is being removed and a new 12 inch pour of concrete being laid. There are two problems. First the road bed is being compacted but there is only a shallow stone base under the new pour. Secondly, instead of having steel placed within the pour, it is only being installed between the lanes.
The roads that are being constructed are designed to look good initially but not to last. In 2-5 year (I predict and, of course, I will not be held responsible since you cannot predict the future) these roads will start showing stress and within ten they will have to be rebuilt again. It might be great politics to brag about the number of miles of road reconstructed but if they fall apart in a short period of time, is that really the best solution?
Government economists whether they work for our government or any other around the world, have a deplorable record. The record speaks for itself whether it is the Soviet Union's ten year plans which produced less each year or the Obama team which was totally wrong on all of its forecasts. When are we going to hold them responsible?
So if government is not the answer, what should we do. We minimize government spending to things that we, as individuals, cannot do. For example, we cannot defend our borders (of course, the government is not doing a good job of that) nor employ a military, we cannot regulate interstate commerce, and we cannot collect foreign tariffs or conduct matters of state. We should get out of regulating education which should be a local issue, we should get out of Obama Care, and we should get out of many of the programs that are nice but for which we cannot afford.
Do you agree?
Michelle Malkin talks about the Obama Economic Advisors, I think her take, as usual, is right on.
Official motto of the White House economic team: Those who can, do. Those who can't, fantasize in the classroom, fail in Washington and then return to the Ivy Tower to train the next generation of egghead economic saboteurs. Life is good for left-wing academics. Everyone else pays dearly.
Take Austan Goolsbee, please. President Obama's "fresh-faced" University of Chicago econ professor arrived in Washington in December 2008 to fill two slots: chief economist/staff director of the president's Economic Recovery Advisory Board and member of the Council of Economic Advisers. In September 2010, he replaced CEA head and fellow academic Christina Romer, who retreated to the University of California at Berkeley last August when unemployment hit 9.5 percent. (She infamously projected that the Obama stimulus would hold the jobless rate below 8 percent.)
Goolsbee's primary task: translating all of the administration's big-government theories for us dummies. As Goolsbee put it to his university's student newspaper: "We've certainly seen in previous crises that it's quite important to explain things to non-experts. The American people can confront any challenge if they're comfortable with the approach."
And what exactly was the nature of Goolsbee's vaunted expertise? Making money as a business rescue-and-recovery expert without ever having had to meet a payroll.
Goolsbee, the 15th wealthiest member of the Obama administration, has raked in assets valued at between $1,146,000 and $2,715,000. He also pulled in a University of Chicago salary of $465,000 and additional wages and honoraria worth $93,000, according to Washingtonian magazine. As I've noted before, the government research fellow and Obama campaign adviser was a champion of extending credit to the un-creditworthy. In a 2007 op-ed for The New York Times, he derided those who called subprime mortgages "irresponsible." He preferred to describe them as "innovations in the mortgage market" to expand the pool of homebuyers.
Goolsbee'sStartup America" winners by drawing a trough of broken light bulbs (symbolizing entrepreneurial ideas) piling up in a "Valley of Death" because they lacked government support.
A comical choice of imagery given the Democrats' enviro-nutty ban on incandescent bulbs. But I digress.
When Goolsbee joined Team Obama, the unemployment rate was at around 6 percent. When he announced his resignation on Monday, the jobless rate stood at 9.1 percent. Romer and Jared Bernstein (former chief economist to Vice President Joe Biden) had predicted unemployment would drop every single month after August 2009 due to the Obama stimulus. Bernstein bailed on the administration in April 2011 for the sanctuary of a liberal think-tank. He'll also now ply his failed wares as a financial pundit.
These hapless command-and-control ideologues were preceded by Peter Orszag, who hung his "Mission Accomplished" banner over the White House budget office in June 2010 after fewer than two years on the job, and by former National Economic Council head and hedge fund manager Larry Summers, who was caught sleeping on the job -- literally -- more than once during his brief tenure. Summers packed his bags in September. He was followed by Princeton economics professor and former top Obama Treasury Department official Alan Krueger in October 2010.
White House aides have lamented that the economic team is "exhausted." Apparently, Obama is tired of hearing from them, too. The Hill newspaper reports that he has stopped receiving daily economic briefings that were once treated with the same emergency status as national security briefings. So, the central planners continue to be paid to fail -- while their boss looks the other way at the destruction, whistling into what he calls America's temporary "head winds."
Nice non-work if you can get it.
Michelle Malkin is the author of "Culture of Corruption: Obama and his Team of Tax Cheats, Crooks & Cronies" (Regnery 2010). Her e-mail address is malkinblog@gmail.com.
Probably the most memorable is Christina Romer who forecasted that the unemployment rate would never rise above 8% if Congress passed the Stimulus. It hit 8% and did not stop until it had eclipsed 10%. Hey, that's only a little more than a 25% miss! You remember they say, you can't forecast the future!
Why have these economists all missed the mark? My opinion is that they come from the wrong point of view. They believe in big government solving the issues facing the country. These type of solutions have never worked, in fact, there are those who believe the Great Depression was extended by years by the passage of Roosevelt's legislation, the New Deal. The same has occurred in our present severe recession.
When government spends money to provide temporary jobs, it does not create anything. For example, I had to laugh when Obama talked about all the "shovel ready" jobs that were going to be created by his jobs program. The jobs that were being created went to people who already were in the construction business, therefore they were no new jobs. In fact, even though I grew up on a ranch and can run tractors and the like, I would never be hired to run a bulldozer, steam roller, grader or paver as I do not have experience.
Another interesting part of the Obama road program is occurring outside my office. They are rebuilding the road which carries an immense amount of traffic. The existing concrete is being removed and a new 12 inch pour of concrete being laid. There are two problems. First the road bed is being compacted but there is only a shallow stone base under the new pour. Secondly, instead of having steel placed within the pour, it is only being installed between the lanes.
The roads that are being constructed are designed to look good initially but not to last. In 2-5 year (I predict and, of course, I will not be held responsible since you cannot predict the future) these roads will start showing stress and within ten they will have to be rebuilt again. It might be great politics to brag about the number of miles of road reconstructed but if they fall apart in a short period of time, is that really the best solution?
Government economists whether they work for our government or any other around the world, have a deplorable record. The record speaks for itself whether it is the Soviet Union's ten year plans which produced less each year or the Obama team which was totally wrong on all of its forecasts. When are we going to hold them responsible?
So if government is not the answer, what should we do. We minimize government spending to things that we, as individuals, cannot do. For example, we cannot defend our borders (of course, the government is not doing a good job of that) nor employ a military, we cannot regulate interstate commerce, and we cannot collect foreign tariffs or conduct matters of state. We should get out of regulating education which should be a local issue, we should get out of Obama Care, and we should get out of many of the programs that are nice but for which we cannot afford.
Do you agree?
Michelle Malkin talks about the Obama Economic Advisors, I think her take, as usual, is right on.
Malkin: Obama's Egghead Economic Saboteurs
Official motto of the White House economic team: Those who can, do. Those who can't, fantasize in the classroom, fail in Washington and then return to the Ivy Tower to train the next generation of egghead economic saboteurs. Life is good for left-wing academics. Everyone else pays dearly.Take Austan Goolsbee, please. President Obama's "fresh-faced" University of Chicago econ professor arrived in Washington in December 2008 to fill two slots: chief economist/staff director of the president's Economic Recovery Advisory Board and member of the Council of Economic Advisers. In September 2010, he replaced CEA head and fellow academic Christina Romer, who retreated to the University of California at Berkeley last August when unemployment hit 9.5 percent. (She infamously projected that the Obama stimulus would hold the jobless rate below 8 percent.)
Goolsbee's primary task: translating all of the administration's big-government theories for us dummies. As Goolsbee put it to his university's student newspaper: "We've certainly seen in previous crises that it's quite important to explain things to non-experts. The American people can confront any challenge if they're comfortable with the approach."
And what exactly was the nature of Goolsbee's vaunted expertise? Making money as a business rescue-and-recovery expert without ever having had to meet a payroll.
Goolsbee, the 15th wealthiest member of the Obama administration, has raked in assets valued at between $1,146,000 and $2,715,000. He also pulled in a University of Chicago salary of $465,000 and additional wages and honoraria worth $93,000, according to Washingtonian magazine. As I've noted before, the government research fellow and Obama campaign adviser was a champion of extending credit to the un-creditworthy. In a 2007 op-ed for The New York Times, he derided those who called subprime mortgages "irresponsible." He preferred to describe them as "innovations in the mortgage market" to expand the pool of homebuyers.
Goolsbee'sStartup America" winners by drawing a trough of broken light bulbs (symbolizing entrepreneurial ideas) piling up in a "Valley of Death" because they lacked government support.
A comical choice of imagery given the Democrats' enviro-nutty ban on incandescent bulbs. But I digress.
When Goolsbee joined Team Obama, the unemployment rate was at around 6 percent. When he announced his resignation on Monday, the jobless rate stood at 9.1 percent. Romer and Jared Bernstein (former chief economist to Vice President Joe Biden) had predicted unemployment would drop every single month after August 2009 due to the Obama stimulus. Bernstein bailed on the administration in April 2011 for the sanctuary of a liberal think-tank. He'll also now ply his failed wares as a financial pundit.
These hapless command-and-control ideologues were preceded by Peter Orszag, who hung his "Mission Accomplished" banner over the White House budget office in June 2010 after fewer than two years on the job, and by former National Economic Council head and hedge fund manager Larry Summers, who was caught sleeping on the job -- literally -- more than once during his brief tenure. Summers packed his bags in September. He was followed by Princeton economics professor and former top Obama Treasury Department official Alan Krueger in October 2010.
White House aides have lamented that the economic team is "exhausted." Apparently, Obama is tired of hearing from them, too. The Hill newspaper reports that he has stopped receiving daily economic briefings that were once treated with the same emergency status as national security briefings. So, the central planners continue to be paid to fail -- while their boss looks the other way at the destruction, whistling into what he calls America's temporary "head winds."
Nice non-work if you can get it.
Michelle Malkin is the author of "Culture of Corruption: Obama and his Team of Tax Cheats, Crooks & Cronies" (Regnery 2010). Her e-mail address is malkinblog@gmail.com.
You wrote, "The jobs that were being created went to people who already were in the construction business, therefore they were no new jobs."
ReplyDeleteAlthough it is logically impossible to know precisely what would have happened if the stimulus has not been done, it defies reason to assert that nearly $800 billion can be injected into the economy and not a single new job was created.
“[T]he stimulus results in approximately 2.5 million more jobs by the end of 2010 than would have been the case without it,” Economist Mark Zandi of Moody’s Economy.com estimated, “and leaves the unemployment rate almost 2 percentage points lower.”
The infrastructure spending was not even the largest component of the stimulus. The largest percentage went to tax reduction. The second largest was aid to the states to avoid layoffs or even more workers to meet state budget requirements.
Government Accountability Office (GAO) report released in July. In at least eight states (out of 16 states studied), GAO found that increased education funding was helping local school districts keep teachers on the payroll who would have been laid off. “Overall, states reported using Recovery Act funds to stabilize state budgets and to cope with fiscal stresses,” GAO concluded. “The funds helped them maintain staffing for existing programs and minimize or avoid tax increases as well as reductions in services.”
The Congressional Budget Office did an extensive macroeconomic analysis of the effects of the stimulus. You can see their conclusions here...
http://www.cbo.gov/ftpdocs/117xx/doc11706/08-24-ARRA.pdf
I put more reliance on these sources than commentaries from cable news pundits.
--David
David,
ReplyDeleteAfter reading the Obama health scare bill, I have little confidence in some of what the Congressional Budget Office says.
How is blue blazes can you predict what spending will be when the authorization in the bill says"
$x to be spent in FY 2010 and whatever is necessary in FY 2011 to 2014. Hell, even I can figure out there is no limit to spending with that type of authorization. How can CBO tell us that total spending will be balanced. No wonder we are in such trouble. The liars lie!
Isn't it time to throw all the bums out?
And replace them with whom? Private sector bankers who abuse the public citizens they work for and whose sole goal is to gain a larger profit?
ReplyDelete-R
I always look for what methodologists call "convergent validity." When the CBO, GAO, three prominent independent economic forecasting corporations, and a half dozen Nobel Prize winners in economics are in general agreement, I put more confidence in their opinions than what the "talking heads" say on TV or the Congressmen say on the floor. It is no wonder people are confused about basic facts.
ReplyDeleteI would be glad to throw the bums out, but the question remains, "What bums will replace them?" If we get new names but the same policies, then we have gained nothing. I am afraid that the economy will have to crash again, with probably even worse financial markets collapse than 2008, before we see fundamental change. And, as we were discussing in the trend toward government infringement of citizen's 4th Amendment rights, I fear the change will be a further move toward fascism in America, because the root of power in this country is in the financial elites, not the politicians they control. Just my opinion.
--David
David, your opinion is good and yes, things in this country are not good. We, the average citizen, is only given part of the story by each side and each side leaves out the important stuff that we need to make a decision. So we are left with a leg and a trunk of the elephant from which we are supposed to see the whole animal. Until we legislators who will work for what is in the best interests of the COUNTRY and not their pocket book or re-election, we will continue to have the same issues.
ReplyDeleteI can understand your frustration, I feel it too even though we have varying views. The question is, how can we change this process?
You are right in that we are going to have another crash as the first one was not allowed to do, economically, what it was supposed to do. We put bandaids on these great big banks who were "too big to fail" and now the bandaid is ready to fall off. They have done nothing to solve the issues that existed before the crash and have only postponed the inevitable.
Paulson, Bush, Obama and Bernacke will be looked as the four stooges of economics when history views these past few years.