This Should Have Been the Sunday Morning Quotation – Obama the Economist

This is darn scary and something that has to freak out even those friendly to Obama (especially if you agree with mainstream Democrat economic advisors on the role of AD).  And it isn’t a single data point as Brad Smith at the Division of Labor blog points out.  From Ron Suskind’s book Confidence Men (via Division of Labor):

“Both [Chair of the Council of Economic Advisors Christina Roemer and National Economic Council Director Lawrence Summers] were concerned by something the President had said in a morning briefing: that he thought the high unemployment was due to productivity gains in the economy.  Summers and Romer were startled.

“What was driving unemployment was clearly deficient aggregate demand,” Romer said.  “We wondered where this could be coming from.  We both tried to convince him otherwise.  He wouldn’t budge.”

5 thoughts on “This Should Have Been the Sunday Morning Quotation – Obama the Economist

  1. This matches Obama’s “ATM” comment from a few months ago, actually.

    But I wonder: how different is this from Arnold Kling’s discussion of “Patterns of Sustainable Specialization and Trade?”

  2. Yes it does. What’s equally confusing is the GOP’s insistence on tax cuts as a means to spur the economy despite decades of data to the contrary.

    Economics 101 and a basic statistics and finance module should be required for public service. Both parties, generally speaking, live in economic fantasy lands.


  3. Having minimum education standards as a requirement for public service is impractical and in opposition to the notion of citizen government. I suggest a simpler approach: reduce the government’s involvement in economic matters as much as possible, i.e.; significantly, and then stabilize that involvement by leaving it alone.

  4. Hmmmm….. I will point out that similar arguments were being made at the time of the Full Employment Act debates (1944-46). If productivity has increased to the point that the private sector can never provide full employment, then there must be a more central role for public works (at least this was the claim).

    Maybe we can now dredge up some more historical gems, like the administered pricing thesis….yawn.

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