From RealClearMarkets. Does fault lie with the economists who gave Obama advice or with Obama for listening to them? And Paul Krugman faulted Obama for not spending even more to bring the economy back.
If President Obama loses the election in November, economists may
well end up taking a share of the blame - for good reason. Their models
misled him into applying ambitious stimulus therapies to jump start the
economy and boost employment that haven't worked, vastly undermining his
re-election prospects.
Back in January 2009, a now infamous study coauthored by
Christina Romer, the future chair of the President Obama's Council of
Economic Advisors, and Jared Bernstein, the future chief economist for
the Vice President, predicted that an $800 billion economic stimulus
targeted toward boosting consumer demand would stave off a severe
recession and hold unemployment below 8 percent by the end of 2009.
What was so compelling about their study was the illusion of
precision. The Obama administration used their statistical analysis to
aggressively promote specific policy proposals, including the package of
tax cuts and discretionary federal spending embodied in the so-called
stimulus package, the American Recovery and Reinvestment Act of 2009.
But little of what they predicted has panned out.
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