Dean Baker: "President Obama has abandoned evidence-based economics in favor of deficit cutting"

Better Believe It

(1000+ posts) Send PM | Profile | Ignore

Mon Aug-15-11 01:28 PM
Original message

Dean Baker: "President Obama has abandoned evidence-based economics in favor of deficit cutting"

President Obama's re-election economic policy
President Obama has abandoned evidence-based economics to return the US to growth in favour of the politics of deficit-cutting
by Dean Baker
August 15, 2011

A front page story in Sunday's New York Times gave the country the bad news. President Obama is no longer paying attention to economists and economics in designing economic policy. Instead, he will do what his campaign people tell him will get him re-elected, presumably by getting lots of money from Wall Street.

The article said that President Obama intends to focus on reducing government spending and cutting programmes like social security and Medicare. This is in spite of the fact that: "A wide range of economists say the administration should call for a new round of stimulus spending, as prescribed by mainstream economic theory, to create jobs and promote growth."

In other words, President Obama intends to ignore the path for getting the economy back to full employment that most economists advocate. Instead, he is going to cut government spending � because his chief of staff and former JP Morgan vice president Bill Daley and his top campaign adviser David Plouffe both say this is a good idea.

.... President Obama is apparently not listening to economists anymore, so he wouldn't care, in any case. Just as we have many politicians who ignore climatologists in the design of energy policy, and politicians who think that biology has no place in teaching the origins of species, we now have politicians who think that economics has no place in designing economic policy.

Read the full article at:

http://www.guardian.co.uk/commentisfree/cifamerica/2011/aug/15/president-obama-reelection-economic-policy

-------------------------------------------

White House Debates Fight on Economy
By BINYAMIN APPELBAUM and HELENE COOPER
August 13, 2011

�Playing it safe is not going to cut it,� said Ms. Romer, a professor of economics at the University of California, Berkeley. �Not proposing anything bold and not trying to do something to definitively deal with our problems would mean that we�re going to have another year and a half like the last year and a half � and then it�s awfully hard to get re-elected.�

But there is little support for such an approach inside the administration. A series of departures has left few economists among Mr. Obama�s senior advisers. Several of his political advisers are skeptical about the merits of stimulus spending, and they are certain about the politics: voters do not like it.

Mr. Plouffe and Mr. Daley share the view that a focus on deficit reduction is an economic and political imperative, according to people who have spoken with them. Voters believe that paying down the debt will help the economy, and the White House agrees, although it wants to avoid cutting too much spending while the economy remains weak.

As part of this appeal to centrist voters, the president intends to continue his push for a so-called grand bargain on deficit reduction � a deal with Republicans to make even larger spending cuts, including to the social safety net, in exchange for some revenue increases � despite the strong opposition of Congressional Democrats who want to use the issue to draw contrasts with Republicans.

Read the full article at:

http://www.nytimes.com/2011/08/14/us/politics/14econ.html?_r=1&hp#