Chief White House Economic Advisor Admits Her Forecast on Unemployment Was 'So Far Of

Discussion in 'Economy' started by teapartysamurai, Sep 5, 2010.

  1. teapartysamurai
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    teapartysamurai Gold Member

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    CNSNews.com - Chief White House Economic Advisor Admits Her Forecast on Unemployment Was 'So Far Off'

    Gee, you think???????

    Dumb Dumbs!

    :lol::lol::lol:
     
  2. PoliticalChic
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    PoliticalChic Diamond Member

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    I think that the Romer's are far from dumb.

    What they are is human...

    The first Progressive President is famous for his concept of the 'Administrative State,' which is run by technocrats, bureaucrats, and experts of various kinds.

    His mistake was in assuming both honesty and objectivity.

    The Romer's have written many excellent papers, a number of which counter what they have said while in the employ of the current White House.

    "In 1994, the husband-and-wife team released a study concluding that the economy responds when the Federal Reserve acts, for example, by lowering interest rates. They also noted, however, that fiscal policy -- stimulus packages for example -- had not helped lift the U.S. economy out of past recessions. Francis, David R. ‘The Fed Stands Alone As Recession Rescuer,’ The Christian Science Monitor, July 15, 1994(4)

    The Romers released another study in November 2008 that showed a tax increase equal to one percent of gross domestic product reduces output by 3 percent over the next three years. Republicans have used this study to argue against Obama's ambitions to change the tax code.Evans, Kelly, ‘U.S. News: Obama Gets Depression Scholar in Romer,’ The Wall Street Journal, Nov. 26, 2008

    Romer has said that fiscal policy, such as government stimulus packages, doesn't help economies recover from recessions.
    Christina Romer - WhoRunsGov.com/The Washington Post
    (emphasis mine)


    It will be more than interesting to see if the Bush Tax Cuts are retained by this administrations...

    "Along with hubby, David, Romer wrote a fascinating paper on the wonderworking power of tax cuts. Their analysis found that "tax increases appear to have a very large, sustained, and highly significant negative impact on output ... [and] that tax cuts have very large and persistent positive output effects." The key, they found, is to also cut spending so you won't get lured into raising taxes down the road. Bottom line: Cutting taxes good. Raising taxes bad."
    Christina Romer: Obama's Secret Tax Cutter? - Capital Commerce (usnews.com)
     
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  3. The Rabbi
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    The Rabbi Diamond Member

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    I guess the cognitive dissonance just got to be too great for her, defending programs she knew sucked.
    After the election I would look for a major reshuffling of the Obama Cabinet. Geithner gone, Sibelius, anyone else connected with the current economic policies.
    Of couse whether he can get anyone else with a clue is another matter.
     
  4. PoliticalChic
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    PoliticalChic Diamond Member

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    When do we American taxpayers get the apology along the lines of "so sorry, we know you told us there was no reason for a trillion dollar stimulus, but we didn't listen..."

    Warned 'em.

    Told all the Democrats, liberals, progressives, etc. that history has shown that so-called stimulus is not the path for recessions...

    Harding showed how.
    "Harding inherited Wilson's mess— in particular, a post–World War I depression that was almost as severe, from peak to trough, as the Great Contraction from 1929 to 1933 that FDR would later inherit. The estimated gross national product plunged 24 percent from $91.5 billion in 1920 to $69.6 billion in 1921. The number of unemployed people jumped from 2.1 million to 4.9 million.

    One of Harding's campaign slogans was "less government in business," and it served him well. Harding embraced the advice of Treasury Secretary Andrew Mellon and called for tax cuts in his first message to Congress on April 12, 1921. The highest taxes, on corporate revenues and "excess" profits, were to be cut. Personal income taxes were to be left as is, with a top rate of 8 percent of incomes above $4,000. Harding recognized the crucial importance of encouraging the investment that is essential for growth and jobs, something that FDR never did."
    http://www.n-philes.com/forums/showpost.php?p=50819272&postcount=1


    "Instead of bailing out failing businesses, expanding government, and redistributing taxpayer money with a "stimulus" plan, Harding responded by cutting spending and removing burdensome regulations and taxes. During his campaign, he argued, "We need vastly more freedom than we do regulation." In stark contrast with the Bush-Obama response of ever-more government spending and debt, Harding had federal spending cut in half between 1920 and 1922 and ultimately ran a surplus.

    As a result, the recession that started in 1920 ended before 1923. Lower taxes and reduced regulation helped America's economy quickly adjust after the war as entrepreneurs and capital were freed to create jobs and push the economy to recover. Harding's free market policies lead to the Roaring Twenties, known for technological advances, women's rights, the explosion of the middle class, and some of the most rapid economic growth in American history. "
    http://www.realclearpolitics.com/articles/2009/02/obama_should_channel_harding_n.htm

    I guess it will be just after our left wing friends reach deeply into their pockets, and say to conservatives: "Your money's no good around here...we made the mistake, so we'll pay off the debt."

    Probably comes just after baby Richard Simmons is born.
     
  5. CrusaderFrank
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    CrusaderFrank Diamond Member

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    She'll replace Tim Geithner as SecTres
     
  6. teapartysamurai
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    teapartysamurai Gold Member

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    How smart can they be when it's pretty damn obvious their policies don't work, but instead of changing direction, they just make excuses and spin?

    :cuckoo:
     
  7. loosecannon
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    loosecannon Senior Member

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    Much too much is made of the arguments both secular and institutional that reducing taxes stimulates the economy and raising taxes stiffles the economy.

    Of course that is true.

    But at what expense, and in the brief periods that we have at our disposal to study and draw conclusions who can say that the tax cuts and increases were causative of economic momentum?

    Esp considering that programs funded by taxes don't all return on investment immediately. Like taxes spent on education and infrastructure may not return anything for 20 years.

    i wish it was possible to study the economy with quantifiable results that correspond to quantifiable inputs, but it just isn't possible and never will be.

    The economy is a complex social organism, not an algorithm.
     
  8. Trajan
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    Trajan conscientia mille testes

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    dude, don't even.....


    on the other hand I keep having to remember there are no second acts unless you're a lefty, automatic dispensation from the media to follow. I am depressed.
     
    Last edited: Sep 5, 2010
  9. Greenbeard
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    Greenbeard Gold Member

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    That would be this paper, in which the Romers write:

    Our main finding is that monetary policy has been the source of most postwar recoveries. While limited fiscal actions have occurred around most troughs, these actions have almost always been too small to contribute much to economic recovery. In contrast, monetary policy has typically moved toward expansion shortly after the start of most recessions and appears to have contributed, on average, almost two percentage points to real gross domestic product (GDP) growth in the four quarters following the trough.​

    And later:

    The record of automatic fiscal policy is decidedly more promising than that of discretionary fiscal policy. Table 4 shows the change in the automatic surplus to GDP ratio around the eight troughs since 1950. As would be expected, the automatic surplus to GDP ratio consistently declines during recessions. These automatic falls in the surplus are moderately large; the average cumulative decline in the automatic surplus to GDP ratio from the peak to the quarter after the trough is 1.6 percentage points. For comparison, the standard deviation of changes in the automatic surplus to GDP ratio is 0.3 percentage points for one-quarter changes and 0.9 percentage point for four-quarter changes.

    This simple examination of the data suggests that automatic fiscal policy is more likely to have affected recoveries than has discretionary policy. Unless the effects of modest changes in deliberate fiscal policy are large, or there are consistently important shifts in fiscal policy that are not reflected in the high-employment surplus, discretionary fiscal policy cannot have played a central role in ending downturns or in creating strong recoveries. On the other hand, the automatic movements in the surplus during recessions may be large enough and consistent enough to have significantly affected the path of real output following troughs.

    Despite this negative conclusion on the overall movement of discretionary fiscal policy during recessions, the finding that discretionary fiscal policy is consistently expansionary around troughs is intriguing. If these expansions are in fact responses to economic conditions, they would suggest that deliberate fiscal policy may play some role in recoveries. More important, they raise the possibility that if such expansions were only undertaken more aggressively, fiscal policy could be a significant countercyclical tool. ​

    Which might explain why she suggested a $1.2 trillion stimulus. But why didn't she just wait for the Fed to lower interest rates, thus handling this recession via monetary policy and not having to muck around with fiscal policy?

    [​IMG]
     
  10. Charles_Main
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    Charles_Main AR15 Owner

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    They are not just making excuses they actually think they need to SPEND FUCKING MORE on so called stimulus.
     
    Last edited: Sep 6, 2010

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