Reason

White House: We Totally Didn't Say Recovery Summer Meant Economic Recovery…Except When We Did

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Dreamy

Austan Goolsbee, chair of the White House Council of Economic Advisers, tried this weekend to reel back in the economic expectations of the administration's disastrous "Recovery Summer" campaign:

Goolsbee also said the "Summer of Recovery" touted by Vice President Joe Biden was a reference to the stimulus plan, not economic recovery.

"The vice president was talking about the Summer of Recovery in reference to the recovery act — that you would see the creation of a series of infrastructure and other projects ramping up over the summer, and you did see that," Goolsbee said.

Goolsbee is right on emphasis, but dead wrong on absolutism. The Recovery Summer was focused on highlighting that the number of stimulus-funded projects was really gonna kick in this summer. But if you think that the vice president wouldn't use that opportunity to make extravagant claims about the economy, then you don't know Joe. Here he was launching the propaganda tour:

Fact is!

"The fact is the Recovery Act is working," Biden told a news conference as the administration kicked off a six-week series of events called "Recovery Summer," to highlight the numerous infrastructure programs funded by the 787-billion-dollar plan.

"We've gone from hemorrhaging over 700,000 jobs a month the first several months we got here and turned on the lights in the West Wing here, to adding more—several hundred thousand jobs a month the last several months."

Biden said that the US economy as measured by gross domestic product "was shrinking at 6.4 percent the first quarter we came into office" but that it "grew three percent last quarter, and averaged four percent over the last three quarters."

Biden said the bill enacted in February 2009, of which 620 billion dollars has been allocated, is still stimulating growth and jobs.

"As a result, the Recovery Act is responsible for somewhere between 2.3 million and 2.8 million jobs that were either saved or created," he said. "So, folks, the act is working."

And remember, the administration was already practicing its endzone dance long before the Solstice. Our April 2010 cover story, "The Myth of the Recovery: The White House claims the economy is on the mend. That's a fantasy," spelled out in detail how the economy's underlying problems had not been fixed, despite all happy talk about how Stimulus=Recovery:

The one guy you don't need to add the word "funny" to in your Google Image search

"The Recovery Act has created jobs and spurred growth," President Barack Obama said in a December [2009] speech trumpeting the success of his economic policies. "We are in a very different place today than we were a year ago." Lawrence Summers, director of the White House National Economic Council, concurs. "Everybody agrees that the recession is over," Summers said that same month on ABC's This Week.

To sum up: They said the stimulus would cap unemployment at 8.8%; we said it wouldn't work. They said both before and during Recovery Summer that the stimulus done greened our shoots; we were all like, nu-uh. So what are they saying now? That it's the Republicans' fault. Somehow I don't think this latest pig will fly, either.

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  1. we said it wouldn’t work.

    What the fuck is wrong with you people?
    Tinkerbell is dying; clap, goddammit!

  2. We said Recovery Summers. He’s a drunk, you know. Had to put him in rehab.

  3. Somehow I don’t think this latest pig will fly, either.

    One of my aerospace friends once made the comment you can get anything to fly with enough thrust and some control surfaces. A pig should be no problem for our federal government, especially with the competent leadership exhibited by this administration.

  4. Of course the pig won’t fly. It’s fueled by corn and biofuel.

  5. It’s like they forget that recording devices exist.

    1. Yeah, I unfortunately made the same mistake… my bad.

      1. There’s an app for that.

    2. You forget Alice in Wonderland:
      “When I use a word,” Humpty Dumpty (i.e., Federal gubermint) said, in a rather scornful tone, “it means just what I choose it to mean – neither more nor less.”
      “The question is,” said Alice, “whether you can make words mean so many different things.”
      “The question is,” said Humpty Dumpty, “which is to be master – that’s all.”

  6. “The vice president was talking about the Summer of Recovery in reference to the recovery act ? that you would see the creation of a series of infrastructure and other projects ramping up over the summer, and you did see that,” Goolsbee said.

    Hmm… Goolsbee is almost an anagram of Goebbels. Coincidence? I think not!

    1. You know who else had a Goolsbee on his staff?

      1. The University of Chicago?

        1. That was hilarious.

    2. By the way, is Austan Goolsbee not the cutest name for a Randian villain ever?

      What ho? This is real life? The devil you say!

    3. BRILLIANT!

  7. Stop quibbling! Just recite to yourself 1000 times: “Comrade Obama is always right.” Then do the same with “I will work harder.”

  8. This provides a nice bit of corrective to Mrs. Suderman’s piece over at her Atlantic blog about how Austan Goolsbee would never sell out, and is just the man to put the administration’s economic policies back on track.

    Mrs. Suderman, of course, is personally acquainted with Mr. Goolsbee. Such a cozy little world!

    1. Mrs. Suderman (or is it Mrs McArdle to go along with Mr. Mcardle) is an idiot. She is classic example of the elitist moron that is ruining the country. Rather than call Goolsbee out for the fraud that he is, McArdle writes about how he was such a great teacher back in the day. He teaches at Wharton he can’t be that bad.

      Yes, Megan he can. He is a fool and a dangerous one at that. McArdle refuses to believe that anyone with the right credentials could be that bad.

    2. Note to Republicans
      Friday, March 6th, 2009

      Austan Goolsbee is a free market economist who Obama would like to put on his Council of Economic Advisers.

      He would be an unabashedly free market voice in Obama’s ear. Let me repeat that: He would be a free market economist, giving Obama advice as Obama sets about nationalizing banks, socializing health care, and generally growing the size and scope of government. Would make a difference? Who knows. But he certainly couldn’t hurt.

      And you’re blocking his confirmation because . . . the Democrats did the same thing to one of Bush’s nominees?

      Radley Balko on Goolsbee… lol

  9. You have to give it time. Capitalism has really dug a hole in the States for the past 200 years.

  10. Here’s the story: the Democrats found a way to @#$%-up a stimulus. Even Dr. Pauly Krugnuts agrees.

    A properly planned stimulus would have worked, or would have worked better than what the Democrats gave us.

    A proper stimulus would have implemented a full payroll tax holiday for at least several years (no FICA collections from employers or employees), giving everyone who works an 8% raise. If you earn $35K/year gross wages, that would have put $233/month in your budget, helping you buy groceries or pay your mortgage. Companies would save the money as well, and could use the savings to expand – which they’d have to do to meet the new level of aggregate demand from the 8% paycheck raise.

    And of course, they should have said from the beginning that the Bush tax cuts would be extended another 10 years.

    But they didn’t do any of these things because, being Democrats and hating liberty, they wanted to tell you what they’d be spending the money on (important projects! green initiatives!), and that you’d just have to keep paying taxes.

    1. This is pretty good, but you need more sarcasm. This is sarcasm, right?

      1. No, Epi, it is not sarcasm. It is a plan for a successful stimulus, unlike the one we were given.

        In a recession, aggregate demand collapses. It’s actually quite easy to restore it by increasing the deficit to put net financial assets back into the private sector, which boosts aggregate demand and pulls you out of the recession. This is what eventually happened in WWII, when the government “borrowed” heavily to fund the war production efforts. Immediately prior, FDR reigned in the federal budget in 1937 (due to carping that “our deficits are too big!”) leading to a horrible collapse. The much huger deficits in WWII pulled the country out of the recession.

        Yes, this idea really works in a fiat currency system – we’ve been off Bretton Woods for decades now. I’m the first to acknowledge it wouldn’t work in a gold-backed currency scenario. But that’s not the world we are living in.

        More details at http://moslereconomics.com

        1. You realize that once you invoke aggregate demand that people stop taking you seriously?

          1. Since we arent being serious anymore:

            Hayek v Keynes

          2. Mixing flows with stocks right out ‘da gate ….

            Fail.

            1. It’s funny watching this same bedwetter changing names and spouting the same nonsense, over and over.

              Dont worry, kid, you’ll get to marry soon enough. Soon, it will be equality for all, and you’ll be able to finally wed your hairy lover.

              Good times is a-comin’!

        2. Did it ever occur to you that WWII ended the great depresssion because it made FDR train his gun on the Germans and the Japanese instead of America’s producing class. Remember, this is the man who talked about having his boot on the neck of American Business, who randomly changed the price of eggs one morning because he felt like it, and who imposed the very payroll taxes for which we need a holiday.

          Repealing payroll taxes for a few years will result in hiring people on a temporary basis, and dumping them when the marginal costs of employment exceeds their marginal value added–i.e. when the tax holiday is over.

          The only stimulus plan that will work is (a) instituting a permanently low flat tax so that people can keep what they earn without having to spend resource on tax avoidance, and (b) getting the Feds out of our business so that we can get back to business.

          1. Motherfuckin’ word!

            The economy needs private investment to return. A simple form of taxation eliminating all others is the only way. Certainty. Anything short of MASSIVE spending cuts (unlikely), the only way to get out of this hole is by getting the public sector (cancer) off of the backs of the private sector (also known as the productive sector) so it can work its way out.

            Central planning sounds great and all, but it is fucking impossible for 535 assholes, and Obama, to “manage” any economy, much less this one!

            1. Which is why surveys that ask whether you approve of how the President is managing the economy are bogus. The unquestioned premise is that the President is supposed to manage the economy.

              1. That doesn’t make it bogus. If he’s managing the economy by doing absolutely nothing to manage it, then I approve.

              2. The only jobs the President can “create” are the type that are paid for by the private sector. The notion that a president can “create” jobs is part of the Big Lie. Unless, of course, Obama came out and said he was opening a couple of Subway franchises with his Nobel “earnings.”

          2. Bravo!

        3. The problem comes when you put ‘plan’ and ‘stimulus’ together. Planning doesn’t fix an economy. Ask the Russians.

          The reason the US got out of the Depression is because all our competitors’ capital was bombed away.

          Large deficits don’t end recessions. If they did, we wouldn’t have had a recession since the 1980’s.

          1. Well, to be clear, I am in no way advocating the “planned economy.” I am practically an anarchist when it comes to government regulation of the economy – get them the hell out of the way.

            And if you think that the way to a growing economy is destroying competing nations’ capital, then you should be advocating an “all warfare, all the time!” approach to economic growth. Check your premises.

          2. The reason the US got out of the Depression is because all our competitors’ capital was bombed away.

            I’m getting an idea….do we have enough bombs to wipe out every last bit of China’s capital?

        4. “Immediately prior, FDR reigned in the federal budget in 1937 (due to carping that “our deficits are too big!”) leading to a horrible collapse.”

          Nope.

          The 1937 downturn was caused by incresed taxes and by a big increase in unionized labor after the 1935 Labor Relations Act was passed and there was a big strike at General Motors.

          The Wall Street Journal had an article on this not long ago to address the Keynesean myth that liberals have been spouting about the 1937 economic downturn.

          1. How is “increased taxes” inconsistent with FDR’s promise to balance the budget? (which is what I meant by “reigned in the … budget”) In other words, I don’t see why you think you are disagreeing with me.

            When you raise taxes, you remove net financial holdings from the private sector. What a surprise that unemployment shot up from a 7 year low of 14.3% to 19.1%!

            1. “Reigning in the federal budget” means cutting spending – not raising taxes.

        5. Bzzt, wrong.

          World War II was immediately followed by an economic collapse in 1946. The nominal GDP increases caused by massive deficit spending, eliminating unemployment by drafting millions, and moving women into GDP-counted jobs was neither sustainable nor able to jump-start sustainable growth.

          What actually restarted the US economy was the biggest broken windows effect in world history, as the factories of the United States came online to fill both several years of pent-up domestic demand and replace several decades worth of Japanese and European physical capital destroyed in the war.

          The equivalent today would not be massive stimulus spending, but bombing Toyota and Volkswagen into rubble to give GM a boost. Which is obviously insane.

          The conclusion, then, is that the government should not fuck with the economy, because it can’t do any good.

          1. The equivalent today would not be massive stimulus spending, but bombing Toyota and Volkswagen into rubble to give GM a boost. Which is obviously insane.

            How about letting GM and Chrysler go bankrupt to give Ford a boost?

      1. Its pretty much the old “Run for Your Life”
        Live if up on your Diners Club card. Pay the diners club off with your American Express (increases your credit limit). Than use your Texaco card, and than repeat.
        Hopefully, when you actually have to pay a portion of the interest, you are dead.

      2. I can see right away why the plan isn’t working.

        Everybody knows that the rainbow goes on the vertical line and the unicorn goes on the horizontal line. I can’t believe they missed that.

        1. Well, economics does put the Y(Q) on the X axis and the X(P) on the y axis. Which brings me to one of my biggest econ bitches. STANDARDIZE MOTHERFUCKERS, a symbol/letter with 47 completely different meanings can be a huge pain in the ass when explaining shit to people.

    2. The only thing “properly planned” you can expect from Congress is the pork. Stunning expert work on the pork.

  11. It is more than a little ironic that liberals like MNG come on here and accuse libertarians of having a religious faith in the economy when it seems that the Democrats are the ones with the religious faith. They didn’t worry about how the stimulus was designed. They didn’t care. They just wanted to steal. They figured the economy would come back no matter what and they would get the credit for it. So why not steal? That is an example of religious faith.

  12. ReallyWelch. Is it fair to bring up every failed propaganda campaign and re-hash every blantant lie from this White House? We’ll be bogged down in bullshit inauguration addresses and the whole “keeping your health insurance” thing.

    Let us come together, as Americans, and focus our attention and hate on Goldstein du jour: John Boehner.

  13. At this point, I’m starting to believe in the VRWC. Biden is obviously a plant to make Cheney look human and Quayle look intelligent. Gibbs is busily rehabilitating Scott McClellan’s status as worst WH Press Secretary of all time. Maybe there is a cabal of billionaire Republicans who control everything.

    It certainly makes more sense than the story that the Obama financial guys continue to believe their own bullshit.

  14. Oh, come on now. The economy couldn’t be that bad. Ben Affleck is starring in a major motion picture :Good Will Hunting Too – Chuckie Gets His.

  15. Maybe if people and organizations like Reason weren’t so negative about the president’s work all the time, the economy would be back to prosperity by now.

    Clap harder, Tinkerbell’s dying!

    1. That’s what’s referred to as “talking down the economy”.

      1. The problem is not the donut, its the holes. You heard me right. Its those fuckin munchkins! Time to make the donuts people, The Fed will provide the dough so lets go make some donuts and fuck the holes!

    2. I don’t believe in faeries.

      1. Oh, but we believe in you, honey. And those gorgeous Rossis!

      2. It’s hard not to believe in you…I see you fuckin signs on every exit.

    3. It’s exactly the same reason why the paranormal stops working once a skeptic walks in the room. It’s the lack of belief. That’s the whole deal. Libertarians need to read The Secret. Obviously, Hopey has read it.

  16. Goolsbee would have been better off by saying, “You believed Joe Biden? That’s your problem, not ours. He’s the drunk, crazy uncle of the administration. Have you heard half the stuff he’s said?” That would have been honest and gotten heat off the administration.

  17. giving everyone who works an 8% raise.

    Completely unnecessary; as Krugabe has pointed out many times, we are in a deflationary death spiral. Your dollars are worth more every day. Just ask him.

    [I actually feel an eensy teensy bit sorry for Goolsbee; when I have seen him interviewed in the past, it actually seems as if there’s somebody *in there*. Unlike his boss and all those other robotic functionaries. He’ll leave the White House a ruined, pitiful shell. And I’ll laugh.]

    1. Obama doesn’t have the most basic understanding of our monetary system, or of how to restore aggregate demand in a system like we’ve got. Neither does Larry Summers, who admitted that he doesn’t even understand Federal Reserve open market operations or how the Fed clears checks that Treasury writes.

      Our only hope is that a few Republicans (the important ones, the leaders) can be made to understand this or we are going to be in a recession for a long, long time.

      1. “Neither does Larry Summers, who admitted that he doesn’t even understand Federal Reserve open market operations or how the Fed clears checks that Treasury writes.”
        Hasn’t Bernanke de facto admitted the same thing?
        If electronically creating money is the basis of Keynesian economics, and that is the end all and be all, than why hasn’t Bernanke done that so I can stay home, drink beer, and watch internet porn all day???

        1. It’s not the end all and be all – someone has to actually create the real goods and services that people consume. The electronic money creation is the easy part (it goes on every day already – we don’t need China to lend us money folks, and you are simply ignorant if you think we do) – the hard part is coming up with a system that discourages freeloaders like you pretended to want to be in this comment.

          1. No, seriously, I want to be a freeloader – its just that nobody will electronically create money to give me for internet porn and beer.
            OR, I would settle if they gave me a trillion dollars and I would buy 10 year treasuries at 2.5% which is….?2.5 billion? a year, which I would than use to buy internet porn and beer. And out of the goodness of my heart I would give you 10 or 20 million dollars.

      2. Don’t worry. If you think fixing the economy involves printing lots of money. The Republicans totally got you covered.

  18. It turns out that when they said “Recovery Summer” they really meant they were going to try to recover the massive amounts of unpaid taxes from the liberals in the White House and on Capitol Hill.

  19. Weren’t you watching? He had his fingers crossed.

  20. In a recession, aggregate demand collapses.

    In a recession, aggregate demand misallocation of capital collapses.

    1. That is Brilliant and correct. This one started with Barney Frank misallocating capital when he gambled on Freddie and Fannie, has continued with Obama’s misallocation through HAMP, the recovery summer infrastructure project, cash for clunkers, and–my personal favorite–allocation of Chrysler bondholder capital to the UAW.

      Boehner–for all his faults–at least seems to understand that he should not be allocating other people’s money.

      1. Hey! Don’t leave me out!

    2. In a recession, aggregate demand forced, coerced, or incentivized misallocation of capital collapses.

      1. Just regular old missallocations (due to lack of information or mistakes) usually work themselves out regardless of an expansion or contraction.

    3. But I’m sure you realize that the two aren’t mutually exclusive. You can have misallocated capital (due mostly to insane regulations and incentives set up by the govt wrongly getting involved in the economy), which implodes, leading to a collapse in aggregate demand.

      The government is, quite simply, currently taking too much in taxes and not leaving enough in the hands of the private sector. My proposal would rectify that.

      Deal with it people: I’m a neo-Keynesian libertarian.

      1. Neo-keynesians are neo-wrong.

      2. You know what else would boost aggregate demand? If the Federal government bought a million new cars off the lot and dumped them in Lake Michigan.

        Economy still need some stimulating? I heard about a bunch of cars at the bottom of Lake Michigan. Let’s hire some folks to recover and recycle them.

        Rinse and repeat as necessary.

        1. They’re not Chryslers, are they?

          1. One can only hope.

      3. Just because you think aggregate demand will decrease doesn’t a Keynesian make?

        There is no such thing as a Keynesian libertarian. That’s beyond oxymoron and in the realm of dancing pink pachyderms.

      4. So Draco, as a neo-keynesian libertarian, do you think this Goolsbee character has ever felt a truncheon between his lips?

  21. Speaking of stimulating the misallocation of capital, do we have a countdown clock for the inevitable wave of sob stories about people whose “homebuyers’ tax credits” are disallowed by the IRS?

    1. I’m pretty sure the Constitution has something in there about a right to homebuyer tax credits.

    2. As someone who bought at the top of an overheated market in 2006, their tears will taste sweet to me. “Welcome to the party, pal.”

  22. So they’re using Jedi mind tricks now?

  23. If I were a Democrat, I’d want Joe Biden to STFU. That said, I’m not a Democrat. Keep talkin’, Joe. We’re all ears.

    1. He was actually intended to be the Obama administration’s gaffe sink. Unfortunately, said administration woefully underestimated their ability to foul up things, and he’s too undersized to prevent gaffe overloads from leaking into the part of the administration that does the work.

  24. Somehow I don’t think this latest pig will fly, either.

    I am offended by this imagery. I trust the Administration will make Mr. Welch an offer he can’t refuse.

  25. And remember, the administration was already practicing its endzone dance long before the Solstice.

    Kind of like the Detroit Lions touchdown with 30 seconds left yesterday.

    1. Not to mention the Cowboys with 0 seconds left last night.

      1. Hey RC was that Joe Pozderik playing right tackle for the Cowboys last night?

        I guess we know why the Cowboys didn’t promote Jason Garrett a few years ago. He is the one coach in America dumber than Wade Phillips.

        The Cowboys really are the Kardasian sisters of the NFL. How exactly is a team with an unreliable quarterback who got run out of the playoffs by 30 points last year considered a contender?

        1. They are good enough to be a playoff contender, and they are the most popular team in the league. Having the Cowboys play and talking them up gets good ratings for ESPN and the other football networks. They won’t say anything too bad about that team until it is obvious they are going nowhere. It is simply pandering to the base.

      2. Having the penalty after Roy Williams actually caught a touchdown pass was much like giving GM a bailout and having to buy one of those cars. Highly over-rated!

  26. As you can see little boy, I am in fact NOT naked. And I never said that I was clothed, I said that my clothing was so delicate and fine that your lowly eyesight is incapable of seeing my new clothes.

  27. You know who else had a Goolsbee on his staff?

    Goolsbee, Goolsbee… sounds awfully familiar. I’d have to check my personnel files.

  28. Obamunism is not working very well is it?

  29. Today the United States tomorrow the World

  30. I love that photo of Ghoulsbee. Looking so proud in front of all that wonky math!

    These economic schmucks think that dressing up their pig with some algebra lipstick makes it look all “real science,” like their rain dance D’n’D rolling-for-more-powers shit has the precision of physics or something.

  31. What part of the Constitution don’t these clowns understand? Oh, yea…ALL OF IT!

  32. This administration takes any opportunity to spend our money for thier pet projects and sycophants.

  33. Recovery Summer – she’s one of my favorite porn stars!


  34. And now for our next trick….Recovery Fall.

    Get it?

    Recovery….

    and Fall

  35. Austan Goolsbee? $hi+ he can’t even spell Austin right no wonder we are double dipping! If he’s the answer I’ve forgotten the question!

  36. You do realize that 95% of American’s have no idea what aggregate demand means. They think it has to do with something in concrete production. IE: What is the aggregate demand for this batch? And not one person in O’s administration will ever be able to move him off his class warfare rant, he’s worked so hard on it and all.

    1. Yes, I realize that. I also realize (and this is the real tragedy) that 95% of people in positions of power in the government and in banking (including the central bank) don’t really understand the fundamental workings of a fiat currency economy.

      I’ve actually had to explain to people on this blog some months back – people who think they understand economics – that adding another dollar to the deficit adds exactly one dollar of financial assets to the private sector. Many posters thought it was the opposite!

      My friends ESM and DWJ do a great job of explaining the workings of a fiat currency economy here. I recommend that interested parties read the very short, simple and informative three part series. And read it before you vote for people who want to balance the budget, which would be a disaster, especially right now. Well, actually you should probably still vote for them to throw the Democrats out of power, but then call them up and tell them why balancing the budget would be a huge mistake!

      1. I learned all this stuff over 30 years ago and found it amazing how many actually understand so little about anything economic. They spout worn out phrases and don’t even understand them. As for balacing the budget right now, anyone who says we can with the entitlement “off budget” numbers is entertaining themselves and probably chuckles every time they say it. Obama will only embrace tax cuts where they are needed if you redine “rich” to be Europeans. This whole debate is so stupid I have trouble getting mad at the true socialists, if there is such a thing. Don’t they all become wrapped up in themselves and become dictators? After all they KNOW more than anyone when they actually don’t understand anything except being a bully and a snob. Anyone who thinks they can manage this ecomony are by definition “outliers”. I doubt that 2% even have a clue how the Federal Reserve gets a Balance Sheet much less having any grasp at “floating currency” rates. Hell, I’m not sure I even get that, just look at China and tell me that currency intervention doesn’t work. When do you pay the piper?

  37. “said both before and during Recovery Summer that the stimulus done greened our shoots; we were all like, nu-uh”

    haha

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