President Obama’s former top economic advisor sharply criticized the federal government for failing to take more aggressive action against unemployment.
“I frankly don’t understand why policy makers aren’t more worried about the suffering of real families,” former Council of Economic Advisors Chair Christina Romer, who left the Administration last fall, said during a discussion at Vanderbilt University in Nashville Tuesday. “I think there are tools we have tools we have that we can use, and I think it’s shameful that we’re not using them.”
Romer had been a voice inside the Obama Administration pressing for a larger ec[o]nomic stimulus and more aggressive government action from the early days of the Administration, and she’s continued to make that case from the outside in a New York Times column.
Romer blames the Fed, meaning Tim Geithner, an ex-Federal Reserve official and the lead administration economy-hawk:
“We need to realize that there is still a lot of devastation out there,” Romer said, calling the 8.9% unemployment rate “an absolute crisis.” … [W]e’re not doing enough,” she said. “That goes all the way up to the Federal Reserve, [which] could be taking more aggressive action.
So two comments. First, Geithner again. That’s twice in two days. Last we heard, Geithner was fingered as part of the sabotage of Elizabeth Warren. Is he acting alone, or carrying water? Who knows, but I wouldn’t take bets he’s a soloist.
Second, on Romer. As Matt Taibbi said at the time of Romer’s resignation:
In economics as in all other things, it all depends on how you look at things – and if everyone in the Obama White House is looking at things from the same vantage point, that sucks and is dangerous. Not that Christina Romer was a savior by any stretch of the imagination (one source of mine called her “totally mediocre”), but she was at least not completely a Wall Street pod job – she was pretty much the last inner-circle adviser who wasn’t, and now she’s gone, for whatever that’s worth.
Not a Wall Street pod job. High praise, and given her environment, I mean that.
I have a feeling that 2012 is not going to be a slam dunk.
NOTE FROM Chris:
If only Washington understood what “shameful” means. I can’t help but think the economy is going to become a lot more painful in the coming months and year or two. Think about how many states (Texas comes to mind immediately) fudged their real budget numbers with stimulus money, and now that’s gone. Because the GOP has this obsession with not raising taxes no matter what, something will have to give. Stagnation seems to be a best case scenario. Of course, the bankers have bounced back nicely, so that will no doubt trickle down about as well as trickle-down economics has worked since the Reagan days.