The White House is Stuffed With People Who are Clueless About Economics

[xchrom]

http://www.alternet.org/economy/obama-and-austerity



I am a strong supporter of Janet Yellen and believe her support for the fiscal and monetary policies best designed to produce a stronger, prompter recovery from the Great Recession makes her the superior replacement for Ben Bernanke. The criticism of Larry Summers’ position on fiscal stimulus, however, was generally inaccurate. Within the Obama/Biden administration, the best known economists (Summers, Christina Romer, and Jared Bernstein) proved dramatically better economists than did the non-economists who eventually came to dominate Obama’s economic policies (Timothy Geithner, Jacob Lew, and William Daley). Summers, Romer, and Bernstein were strong voices in favor of fiscal stimulus. Summers deserves some additional praise because he had to break from his mentor’s (Bob Rubin’s) pro-austerity straightjacket to reach his anti-austerian position.

Obama’s lead non-economists were austerians who denigrated fiscal stimulus, were terrified by the deficits, and eager to cut the safety net. Over time, they became Obama’s dominant economic advisors even as their predictions consistently proved false. Obama supported them because he shared their dogmas. As I explained in a recent column, Obama’s six senior economic advisors are unreconstructed Rubinites who share the President’s economic leanings.

The willingness of Summers, Romer, and Bernstein to oppose the President's leanings reflects well on their integrity. The Obama/Biden administration, of course, has failed to appoint prominent economists as successors to Summers, Romer, and Bernstein who are willing to oppose vigorously Obama’s pro-austerian dogmas.

Geithner, Lew, and Daley championed what Obama hopes to be his “legacy” in the history books – the Grand Bargain (sic, Betrayal) that would inflict even greater austerity on the Nation and begin the process of making massive cuts in the safety net. Had the four horsemen of austerity succeeded in July 2011 in reaching the Grand Betrayal with the Republicans they would have pushed our Nation back into recession and made Obama a one-term president. Fortunately for the Nation, the Tea Party Republicans’ demands proved so extreme that Obama could not get the Grand Betrayal finalized in July 2011.

[eridani]

1. Not really--they're just not working for us n/t

[TBF]

2. I don't think they are clueless at all -

they are just not that in to the lower classes. They work for the 1%.

[Alkene]

10. Exactly. They know what they're doing, and for whom.

It's a big club and you ain't in it.

[tridim]

3. The WH looks forward to your resume submission.

Meanwhile, the economic policies of this WH have benefited me and millions others directly, lifted me out of severe poverty, and put me back into a recovering economy that avoided a massive Bush Depression. Horrors.

It's reality xchrom. Sorry you don't approve.

[xchrom]

4. census: no sign of economic recovery for many in US

http://hosted.ap.org/dynamic/stories/U/US_CENSUS_UNEVEN_RECOVERY?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2013-09-19-03-24-16

WASHINGTON (AP) -- Even as the economy shows signs of improvement and poverty levels off, new U.S. census data suggests the gains are halting and uneven. Depending on education, race, income and even marriage, not all segments of the population are seeing an economic turnaround.

Poverty is on the rise in single-mother families. More people are falling into the lowest-income group. And after earlier signs of increased mobility, fewer people are moving as homeownership declined for a fifth straight year.

"We're in a selective recovery," said William H. Frey, a Brookings Institution demographer who analyzed the numbers.

The annual U.S. survey of socioeconomic indicators covers all of last year, representing the third year of a post-recession rebound.

[tridim]

5. Except for everyone not living in the Bush Depression.

I certainly understand that there are some people still in pain, so let's focus on ousting the Republicans so the Democrats can implement the jobs programs they've been trying to implement for 6 years.

[Liberal_Stalwart71]

6. And why is that? Could it be that the GOP has blocked every single measure to

create jobs in this country? Could it be that the GOP has cut every single program designed to help lift people out of poverty? Could it be that the GOP has reduced assistance for homelessness programs, not just for Americans but for veterans as well. AND...as veterans return home from Iraq and Afghanistan, the GOP has reduced any support for them or their families.

Why are you blaming the WRONG people? Why are you pointing at Obama and say NOTHING about the Republicans who have obstructed every single piece of legislation, every effort, every measure meant to improve this economy?

[xchrom]

7. i post negative pieces about repukes fairly often.

i guess you can't be bothered to notice those.

[Liberal_Stalwart71]

9. Too many DUers to keep up with everyone. But if you're fair, then that's good.

[Nuclear Unicorn]

11. He's fair.

[HughBeaumont]

13. Nearly every piece xchrom posts correctly blames the wealthy and their Republican enablers.

That being said, there ARE way too many Democrats in Congress who do pay just a bit too much fealty to Chi-School economics, and THAT's a problem.

[Liberal_Stalwart71]

18. I agree with that, too. I've been saying all along: get more progressives in Congress

and you'll get more progressive legislative outcomes. The Democratic Party has its problems, but those problems existed long before Barack Obama lifted his right hand.

[hootinholler]

16. "lifted me out of severe poverty"

WOW, congratulations you trend setter!

Funny how so many were thrust into worsening poverty and the middle class is being pushed towards poverty.

I would love to know your secret in escaping severe poverty.

[TBF]

17. Maybe you personally - but NOT millions of others -

Your hyperbole aside, the facts show that the millions of others are suffering from GROWING income inequality:





http://www.motherjones.com/politics/2011/02/income-inequality-in-america-chart-graph

[Jefferson23]

8. Recent OP by Black: Larry Summers’ Take on Efficient Markets and Regulators: Brilliance v. Idiots

Perhaps the only useful thing to come out of the Obama administration’s inept contest between Larry Summers and Janet Yellen as Ben Bernanke’s successor is the purported agreement among economists and other policy makers that the Fed Chair should make the introduction of effective regulation and supervision by the Federal Reserve a top priority. It would be even better if this agreement were real and would be sustained. Regulation and supervision have never risen above tertiary concerns at the Fed and every institutional pressure will push the new Fed Chair to ignore supervision.

Here is the preliminary reality test that any candidate to run the Fed should be asked: Do you agree that it is an untenable conflict of interest for examiners and supervisors to be employees of the regional Federal Reserve Banks, which are owned and controlled by the banks that the regional banks examine and supervise? Note that our Nation has already reached a policy decision that this type of conflict is untenable, which is why we ended the analogous role of the Federal Home Loan Banks as the employers of the examiners and supervisors. The long-time former head of Fed supervision told the Financial Crisis Inquiry Commission that the close ties to the member banks that the regional Federal Reserve Banks maintain harms supervisory vigor (Spillenkothen white paper). Any candidate who answers “no” to the reality test question has, at a minimum, failed to think serious about effective supervision. The crisis should have taught any thoughtful person that such gratuitous conflicts of interest are intolerably destructive.

In reading the arguments of economists who urge that Summers would be a superior regulator and supervisor I have discovered a common theme. Summers thinks the critical issue for a range of topics related to regulation is brilliance v. stupidity.

The key advantages of effective examination, supervision, enforcement, regulation, and assistance to prosecutions come when each of these functions is integrated under a comprehensive understanding of avoiding or terminating the criminogenic environments that produce the perverse incentives that drive our epidemics of control fraud and the resultant financial crises. This allows the regulators to avoid financial crises (as we did in 1990-1991 by ending an incipient epidemic of fraudulent liar’s loans in California). It also allows regulators to contain existing epidemics as we did with the overall S&L debacle. I’ll mention only four of the scores of steps we took because we understood control fraud mechanisms. We adopted a rule restricting growth. This struck the Achilles’ “heel” of every accounting control fraud. We also understood the distinctive traits that lenders engaged in accounting control fraud exhibit and used them to identify the worst frauds, and prioritize them for enforcement actions and closure, while they were still reporting record (albeit fictional) profits. We deliberately popped the bubble in Southwest real estate by cracking down on the frauds that were hyper-inflating that bubble. We ended the regulatory race to the bottom by prohibiting states from engaging in competitive regulatory laxity.

in full: http://neweconomicperspectives.org/2013/09/larry-summers-take-on-efficient-markets-and-regulators-brilliance-v-idiots.html

[WillyT]

12. K & R !!!

[obxhead]

14. This admin is anything but clueless.

They know exactly what they're doing. We just don't factor into the equation except as the flock to be fleeced.

[Autumn]

15. They are not clueless. They are doing what works

for them.

[woo me with science]

19. Not clueless at all,

as the person who chose the photo for the accompanying headline may have recognized...

http://en.wikipedia.org/wiki/2_%2B_2_%3D_5