Jonathan Chait

Obama Economic Team: Get Out of Town

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[Guest post by Kara Brandeisky]

In The New York Times, Binyamin Appelbaum and Helene Cooper report that the Obama camp is split on how to move forward on economic issues:

Mr. Obama’s senior adviser, David Plouffe, and his chief of staff, William M. Daley, want him to maintain a pragmatic strategy of appealing to independent voters by advocating ideas that can pass Congress, even if they may not have much economic impact. These include free trade agreements and improved patent protections for inventors.

But others, including Gene Sperling, Mr. Obama’s chief economic adviser, say public anger over the debt ceiling debate has weakened Republicans and created an opening for bigger ideas like tax incentives for businesses that hire more workers, according to Congressional Democrats who share that view. Democrats are also pushing the White House to help homeowners facing foreclosure.

Even if the ideas cannot pass Congress, they say, the president would gain a campaign issue by pushing for them.

To me, this section reads a bit like a recent Onion article (imagine a headline like, “Obama Advisors Debate Whether to Try to Aid Faltering Economy or Not”). But alas, Appelbaum and Cooper report:

So far, most signs point to a continuation of the nonconfrontational approach better to do something than nothing that has defined this administration. Mr. Obama and his aides are skeptical that voters will reward bold proposals if those ideas do not pass Congress.

While President Obama’s “nonconfrontational approach” is well-documented, I suspect the weird bubble that is Washington, D.C. is also having a big impact on advisers like Plouffe and Daley. An interesting Gallup poll released today shows that D.C. not only leads the nation in the “economic confidence index”it is literally the only territory with a positive confidence score.

Gallup creates the index after asking consumers to rate their perceptions of current economic conditions and then asking them if economic conditions are “getting better” or “getting worse.” Consumers in D.C. were the only ones in the country to believe the economy is “getting better,” giving D.C. a economic confidence index of +11. The state with the next highest economic confidence index is North Dakota, with an economic confidence index of -13. The state with the lowest economic confidence index is West Virginia, with an economic confidence index of -44.

Surprisingly, the unemployment rate in D.C. is actually higher than the country at large. But there are many more public sector jobs. Furthermore, D.C. is the most-educated metro area in the United States, and unemployment among workers with advanced degrees is significantly lower. As a result, D.C. is pretty isolated from the deep economic pessimism in the rest of the country.

Luckily, Obama is leaving Washington today, beginning a three-day bus trip through the Midwest. But a word of advice to Sperling: If you really want to change Obama’s mind, perhaps finish the trip in West Virginia.

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