Give the White House credit. Amid signs that the recession is ending, administration officials are resisting what must be an enormous temptation to gloat. “I think we’re certainly on track to, at least, stabilizing the patient,” said Labor Secretary Hilda Solis during a recent cnbc appearance. But “[t]he patient is still sick.” It’s hardly a triumphalist metaphor. To the extent that there’s a problem, it’s not what the administration is saying so much as what it is assuming: that the business cycle exerts an irresistible gravitational pull—that what goes down must eventually come up.
Exciting news from inside TNR: We just got Gary Gensler, chairman of the CFTC, to join our roster of dignitaries and pacemakers for our event on the current state of the economy. Gensler will tangle with Barney Frank, Eliot Spitzer, Christina Romer, Andrew Cuomo, Bill Ackman, David Wessel, and others on some of the most important questions facing the nation: How have we handled the financial collapse thus far? What could have we done better, and what can we do better still? What will our economy--national and global--look like after the recovery?
On Monday, Fox News's Martha MacCallum went on the air to claim that "After weeks of economic doom and gloom, the Obama administration is now singing a slightly different tune." The primary hook for the statement was Council of Economic Advisers Chairman Christina Romer’s earlier comment that the “fundamentals of the economy are sound." But McCallum followed with a series of clips of various administration officials making (relatively) positive noises about the economy, including a snippet of Joe Biden declaring, at a crowded event, "The fundamentals of the economy are strong!" The problem, as
Christina Romer, the chair of the Council of Economic Advisors, gave a pretty good defense yesterday of the administration’s stimulus plan. Romer, speaking at the University of Chicago, responded to some conservative criticisms of the plan. One of these concerns how to calculate the “multiplier”--the degree to which a dollar in spending or tax increases will lead to more than a dollar in output and effective demand. The administration’s estimate that its plan would create about 3.5 million jobs was based on using a multiplier of 1.6 for spending and 1.0 for tax cuts.
NAME: Christina Romer AGE: 49 NEW APPOINTMENT: Chair of the president's Council of Economic Advisers. HOW SHE KNOWS OBAMA: Economic adviser to the campaign. OTHER TOP POSITIONS: Professor of economics at Berkeley; former vice president of the American Economic Association; co-chair of the National Bureau of Economic Research's program in monetary politics and member of its Business Cycle Dating Committee, which determines when the U.S.