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Tuesday, October 04, 2011

Suskind: Obama Ignores Own Economists; Has Own Economic View

An excerpt from Ron Suskind's book on Obama is startling, but not too surprising.

[Summers and Romer] 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 have been coming from. We both tried to convince him otherwise. He wouldn’t budge.” Summers had been focused intently on how to spur demand, and on what might drive a meaningful recovery…. [W]ithout a rise in demand, in Summers’s view, nothing else would work…. But productivity?… If Obama felt that 10 percent unemployment was the product of sound, productivity-driven decisions by American business, then short-term government measures to spur hiring were not only futile but unwise. The two economists strained their memory… had they said something he’d misconstrued?… After a month, frustration turned to resignation. “The president seems to have developed his own view,” Romer said.

In Obama's mind, productivity and innovation are bad for employment and the economy. Then again, we're 3 years into the Obamanomics experiment - and the results are speaking for themselves.