"First they ignore you, then they ridicule you, then they fight you, then you win." -- Mahatma Gandhi
Public, Economists, And Even Democrat Congressman Not Seeing "Recovery Summer" | Missouri Political News Service

Public, Economists, And Even Democrat Congressman Not Seeing “Recovery Summer”

August 16th, 2010 by mopns · No Comments

Gallup wrote last week, “Americans of all political persuasions say the economy and jobs are the most important problems facing the country today. These concerns easily outpace all others, thus providing politicians seeking office in this fall’s midterm elections with clear marching orders from their constituents: Fix the economy. . . . In the Aug. 5-8 Gallup poll, 65% of Americans mention some aspect of the economy as the top problem facing the country, down only slightly from the beginning of this year.”

Unfortunately, the Obama administration’s preferred way to boost the economy, their $862 billion stimulus bill, hasn’t lived up to their promises that it would keep unemployment below 8% and would create 3-4 million jobs. But the main response to the failure of their stimulus, financed entirely by deficit spending, has been that Democrats and the White House wanted an even larger stimulus. Vice President Joe Biden told ABC’s Jake Tapper last month, “There’s a lot of people at the time argued it was too small. . . . A lot of people in our administration…even some Republican economists and some Nobel laureates like Paul Krugman, who continues to argue it was too small.” Biden added that if Democrats hadn’t had to find 60 votes for the bill in the Senate, “I think it would have been bigger.  I think it would have been bigger.  In fact, what we offered was slightly bigger than that.”

However, according to The Wall Street Journal  Friday, economists think the government needs to get out of the way, even as they “offered a bleak picture of tepid growth and high unemployment.” The WSJ reports, “Economists are getting more pessimistic about the strength of the U.S. recovery, but they don’t think policy makers should do anything more to support it, according to the latest Wall Street Journal forecasting survey. The 53 surveyed economists, not all of whom answered every question, offered a bleak picture of tepid growth and high unemployment. On average, they still don’t see the unemployment rate dropping below 9% through at least June 2011. They expect the economy to add just 136,000 jobs a month over the next 12 months, down from a forecast of 157,000 in the July survey. At that rate, job creation will barely keep up with new entrants to the labor force. . . . Despite the continued challenging conditions, 30 out of 48 economists who answered the question said the economy didn’t need any more fiscal or monetary stimulus.

The poor economic performance of the Obama administration seems to even be frustrating some Democrat members of Congress (despite their support for Obama’s economic policies). The AP reported yesterday, “Democratic U.S. Rep. John Yarmuth lashed out at President Barack Obama’s economic team Thursday, saying they show more concern for Wall Street than average Americans in a blunt election-year assessment from an Obama loyalist frustrated by a tepid economic recovery.” Yarmuth said, “I’m not real happy with our economic team in the White House.” According to the AP, “Yarmuth lamented ‘a sense of floundering and indecisiveness’ by Obama’s administration in trying to revitalize the economy from a deep recession causing stubbornly high unemployment. . . . Yarmuth said Obama is surrounded by economic advisers from Wall Street and academia, complaining that the president’s inner circle lacks someone with practical experience from running a small business. ‘When Tim Geithner and Larry Summers talk about the economy, it’s like it doesn’t involve real people,’ he said of the treasury secretary and director of the White House National Economic Council, respectively.”

Is the administration listening, though? Last week, Geithner declared in a New York Times op-ed, “Welcome to the Recovery … [A] review of recent data on the American economy shows that we are on a path back to growth.” Recent economic data seem to disagree with the Treasury Secretary’s assessment. Little wonder, then, that economists and the American public aren’t buying it.



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