Video: Obama Economic Advisor vs Bush’s
Posted by iusbvision on October 24, 2010
Its Obama Economic Advisor Austan Goolsbee vs. Bush Economic Advisor Keith Hennessey
First of all neither side represents their case very well. Goolsbee omits key facts and represents the graph in a misleading way. To Hennessey’s credit he points this out, but Hennessey fails to point out a key economic points and two of the Obama Administrations glaring fallacies. Hennessey overlooks some great and legit opportunities for good refutation here, which is why I have said that the Bush Administration had a terrible communications machine.
I sent this note to Austan Goolsbee on his youtube channel:
Austan – with all due respect. When there is a large shock to the economy you see the pattern that you have on the board. It falls to bottom, recovers some and then starts to level off. The same pattern on your board would have happened if you did nothing. You know this as well as anyone. In fact nothing would have been better than the uncertainly the leadership has created. You also left out that we need 1.5% growth just to absorb new young people coming into the job market. – cont –>
Austan – lets talk about what policies got us here. In 1999 the NYT warned about a possible collapse in the mortgage industry. In 2001 the Bush Admin and a group of GOP Senators led by Sunnunu and? Dole started introducing bills for mortgage reform. Dems in the? Senate used the filibuster and other tools to prevent passage year after year. OFHEO warned Congress that real reform was needed, Democrats called them names. Obama and Dodd took huge $ from Fannie Mae to keep the status quo. [See our Mortgage Crisis category for the evidence – Editor]
There is a second reason why Goolsbee keeps the graph he shows to such a short amount of time. The economic performance pattern of Goolsbee’s graph looks similar to this:
This is the pattern that is typical of what happens when an economic shock hits the economy. First you see the sharp fall. The damage starts to slow down as the economy starts to regain its footing after the slide down and if uncertainty or bad policies continue the economy basically flat-lines as it is now. As confidence is restored the economy starts to grow and jobs are created. But in a bad case if the government does NOTHING this is the worst pattern you will normally expect to see.
Hennessey forgets to point out that the Obama Administration promised that if it got the stimulus, the follow up porkulus bill and the rest of the spending, as is consistent with socialist Keynesian economic theory, that unemployment would not raise higher than 8.5%. Of course unemployment soared past 10% with the passage of all those bills. The problem is that governments and politicians don’t spend money for economic reasons they spend it for political reasons and new rules tend to be onerous, undermine certainty and help pick winners and losers with the winners sending money back to those in power – Corruption: Stimulus Funds Spent in Democrat Districts…
Obama touted his policy as something akin to FDR’s New Deal, but due to the regulatory uncertainty and the inability of “central planners” to adequately manage a large economy non farm unemployment never dropped below 20% during the New Deal. WWII ending the New deal is what rescued the economy and at the end of 1946 government spending dropped massively and economic growth followed.
Remember, once certainty is restored the economy will grow again instead of flat-line. The truth is that current economic policies are hindering job growth. No one knows what their taxes are going to be, no one knows the entire effect of ObamaCare, the EPA is threatening to regulate carbon all by itself if Congress doesn’t pass cap & tax. Obama is also waging war against small business with his rhetoric and the attacks of the Chamber of Commerce and the NFIB. Is that the kind of environment you would hire or take other measured risks in? This is why I said that if the government did not do stimulus, porkulus, most of the bailouts, ObamaCare, all the new regulations and taxes the economy would be doing better because there would be a great deal more regulatory certainty. There are, of course, many smart incentives the government could have done to help get certainty and economic growth going, but that is not the nature of the far left. The result of bad policy is unemployment that has flat-lined at over 9.5% for 14 months.
Once again a Bush Administration official like Hennessey fails to point out that the Bush Administration fought for mortgage reform year after year after year while Fannie Mae and Freddie Mac used YOUR money to line the pockets of Democrats to the tune of $200 million to preserve the status quo (with Chris Dodd and Obama receiving the largest amounts of cash); not to mention the $90 million that went to Frank Raines and the other tens of millions that went to other Democrat appointees who took jobs at Fannie Mae such as Johnson and Gorelick.