Video:Ex-Obama official lauds stimulus, blames public on economy

Former White House Communications Director Anita Dunn says the Obama administration has been extraordinary effective and that the economy and the stimumlus has worked and the bad economic feelings people have is a big misunderstanding of economics.

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  • Bob Tiernan

    What would you expect from someone who stated that her
    favorite politial philosoper was Mao tse-tung ?

    Bob Tiernan
    Portland

  • valley p

    Well there should not be much doubt that most people have little understanding of macro economics. And there is not much professional economist doubt that the stimulus ‘worked” to the extent it was designed to do. And there is not much doubt this was not enough to make things all better fast enough for the upcoming election.

    Mao tse-tung? That is relevant how exactly? Never mind. I guess it means Obama and his supporters must be communists. Whatever.

    • Steve Plunk

      They are more European style socialists. Redistribution policies, government involvement in industry, generous welfare, anti business, environmentalist, etc.

      Whatever you want to call them they are bad for America.

    • Lonnie

      The stimulus worked? NO, it didn’t work but it did prevent another crash temporarily. The next crash is building as we speak because of poor economic policy. Obama is making Bush look better all the time. And that is very sad. In the next few years, i dont think any of us will recognize America after the next crash.

    • juandos

      And there is not much professional economist doubt that the stimulus ‘worked” to the extent it was designed to do“…

      Yeah, on what planet are these alledgedly ‘professional‘ economists from? Planet Keynes?

      Ever consider doing a little CBO homework to see if you’re right?

      Maybe a dose of Thomas Sowell will straighten you right up: The Mess Bush Left And Other Obama Fables

  • Rupert in Springfield

    >And there is not much professional economist doubt that the stimulus ‘worked” to the extent it was designed to do.

    Actually you are wrong on that. Again, I have warned you to avoid economic discussions. Why you persist in getting involved in them is a mystery since you have no grasp of the subject.

    First of all, did the stimulus work to the extent it was supposed to?

    Obvoiusly not, as unemployment climbed to 10%, far above the 8% Obama claimed the stimulus was designed to hold unemployment to.

    Obamas excuse? He didn’t know how bad things were.

    Thats a laugh, the guy is the president. So now he admits he spent over one trillion dollars on a stimulus without knowing the facts. That’s an indictment, not an explanation.

    Second there is the lie that not many economists doubt the stimulus worked.

    This is something Dean made up because it popped into his head and sounded good. Of course it is at odds with the facts.

    Second, what about this lie that not many economists disagree that the stimulus worked?

    Well, that is a complete fabrication. It popped into Deans head because Obama is a Democrat and he cannot criticize him.

    We have the rather famous letter to congress signed by 100 economists, including former CBO and OMB directors who all say the stimulus didn’t work. This was reported in US News and World Report June 10, 2010. Here is the link:

    http://politics.usnews.com/opinion/blogs/peter-roff/2010/06/10/economists-stimulus-not-working-obama-must-rein-in-spending.html

    So, that pretty much ends that. Plenty of economists, not to mention the American people, dont think the stimulus worked. Obamas explanation? That he didn’t know what was going on when he spent a trillion?

    The incompetence of Obama is becoming apparent to all. While it is a tragedy for the country, at least we have the hilarity of watching the die hards defend him.

    • valley p

      “Obvoiusly not, as unemployment climbed to 10%, far above the 8% Obama claimed the stimulus was designed to hold unemployment to.”

      Rupert…for the 15 millionth time, check your facts on this. By the time the stimulus passed and had begun to be implemented, unemployment was already nearly 10%. So it could not hold unemployment below a number that no longer existed. All it could do was keep things from getting worse, and it clearly did that because after it was implemented unemployment stabilized, growth resumed, and job creation resumed.

      This “you promised 8%” stuff is great political theater, but it has nothing whatsoever to do with economics. Look at the unemployment trajectory in the chart below. Look at how steeply it was going up through the last part of Bush and into the first part of Obama. Look at when the change happened. Right when the stimulus started going into effect. Or don’t look at it because you head might explode if you had to deal with reality.

      http://www.tradingeconomics.com/Economics/Unemployment-rate.aspx?Symbol=USD

      The CBO estimate, which is the politically neutral professional reliable one by the way,is that the stimulus lowered the unemployment rate by between .07 and 1.5%. It raised GDP by 1.7-4.2%. At the mid range, without the stimulus there would have been zero GDP growth this year. Read it yourself.

      http://www.cbo.gov/ftpdocs/115xx/doc11525/05-25-ARRA.pdf

      “Thats a laugh, the guy is the president. So now he admits he spent over one trillion dollars on a stimulus without knowing the facts. That’s an indictment, not an explanation.

      Oh…so in your world if someone is president he has to be all knowing? Then how do you explain Bush and the WMDs? Never mind.

      If you actually read the link you sent, you would see that the issue is not whether the stimulus saved jobs and boosted GDP, it is whether the health care bill and propects for expiration of the Bush tax cuts might be holding back business growth. That letter attempts to make a case that Republicanomics would do better, even though the evidence of the preceding 8 years tends to negate that. So what you have is a bunch of political economists making a political case against the stimulus for political reasons. Nothing new here. Cut taxes on the rich to stimulate growth? Yes, they need another yacht. Great idea. Doesn’t work.

      “So, that pretty much ends that. Plenty of economists, not to mention the American people, dont think the stimulus worked.”

      Yeah…only the ones you cited did not even evaluate the stimulus. They simply made a declaration. And yes…those American people again. you base your opinion on what they think on what Rupert? I know you don’t use polls. So what do you use?

  • Anonymous

    I don’t hear her saying anything that could reasonably construed as “blaming the public”; she’s saying neither the administration nor the public realized how long it was going to take to dig our way out of the economic hole the Bushies put us in.

    • Oscarphone

      You need to get you facts straight there Anon. Congress was controlled by the Democrats and Bush, in TWO speeches warned that unless Freddy and Fanny were fixed, their toxic assets would bring the economy down. The Democrats in Congress howled that Fanny Mae and Freddie Mac were just FINE (“nothing to see here folks, move along”). That was the start bunky and it went world wide. Bush didn’t have much to do with it. Add to that the completely ignorant interpretation of Keynesian economics (which if interpreted correctly is crazy anyway) by Obama and Congress coupled with daily economic strangling pronouncements by our rookie President (more taxes of every stripe and income level, cap & trade, protectionism, evil rich, evil corporations, expanding government regulation, expanding government to just name a few), and you have what we have now along with massive unprecedented debt. None of which Bush had anything to do with. You need to go back to school and take Econ 101. None of this is rocket science to the learned. Which, apparently, you are not one of.

      • valley p

        Fannie and Freddie did not bring the economy down. Fannie and Freddie were brought down by the economy. The dominoes began falling when Countrywide Financial went belly up, along with 100 other mortgage lenders. These were private companies that often bypassed Fannie and Freddie. Capitalism. Then went Lehmen Brothers, a private investment bank and the largest bankrutpcy in history. Capitalism. Not government. Then AIG went under a few days later. Private company. Capitalism. Not government. Then First capital, then the entire banking industry and THEN Fannie and Freddie.

        The entire run up of the housing bubble happened under the presidency of George Bush and a Republican majority congress. It peaked in 2006, before the Democrats won a majority. The unregulated investment banking industry took the country under water. Be a good conservative and take responsibility, okay?

        • Oscarphone

          Ha! Ha! Ha! I always like to “talk” to you delusional liberals. You always start the problem where you want it to start instead of the beginning. Why did the financial markets go tits? They were salted with three deep derivatives loaded with toxic assets. Where did the toxic assets originate? Largely with Fan and Fred sub primes and sub primes generated by others but backed by F&F and the CRA that DEMOCRATS created under Jimmuh Carter. You need a refresher from a real economist, Thomas Spowell. There is a nice little five part series you can read: http://www.investors.com/NewsAndAnalysis/SpecialReport.aspx?id=512353

          There is plenty of blame to go around from Carter to Clinton to Bush, but none of this excuses what Obama is doing NOW. His policies and those of this Congress (DEMOCRAT controlled since Bush’s second term) are frankly making a mild recession quite a bit worse. To give you a little taste how out of touch the Obama administration is: After the BP spill, Obama announced his drilling moratorium in the gulf knowing it would immediately kill 23,000 (their estimate) jobs. IN THE MIDDLE OF THE WORST RECESSION IN OUR LIFETIMES. To say nothing of raising the cost of gas for the average Joe. And to say nothing of his half assed implementation of previously discredited Keynesian economic theory (he forgot the “reduce government/government spending” and “reduce regulation” part. Ooops!). Additionally his Keynesian “pump priming” turned into a huge political slush fund that average Americans never saw a penny of on any meaningful level. Complete BS. As is you.

          • valley p

            Primary cause was Fannie & Freddie? Well, they were both around for decades before the bubble. So if they were the cause, why did we not have the bubble much earlier?

            We did have a commercial real estate bubble that caused a collapse of the S&Ls in the 80s. No Fannie or Freddie in sight that time. We had a high tech bubble in the late 90s and 2000. No Fannie or Freddie. Investors chase rising values. That is the cause of bubbles. Sure, government policy plays a role. There has been lots of government policy that makes home ownership cheaper and more widespread than it would be without it, dating back to the VA loans after WW2.

            But the bubble did not happen until it happened. What changed immediately beforehand? In no particular order: Deregulation of banking (effective repeal of Glass-Steagall,) very low interest rates, invention of new financing packages (i.e. derrivatives) and the spread of subprime loans, also invented by private mortgage lenders.

            Blaming Jimmy Carter is delusional. If he created the problem, then why did 20 years of subsequent Republican presidents, and 12 years of a Republican congress, fail to repeal whatever he did? Barney Frank stopped them? They were that helpless?

            And Keynes was discredited? No my friend. He was made unnecessary while moneterism worked. He became necessary once again when we had a financial system collapse on the order of 1929 and moneterism was no longer adequate to the job. The government has pumped about 3 trillion in new money into this economy over the past not quite 2 years, starting with TARP under Bush. That has been pure Keynes, and it has worked to keep us out of a depression so far. It has not “worked” by fixing everything that was broken overnight. Nor could it. But absent that 3 trillion we would have 20% unemployment and would still be sinking rather than growing.

        • Oscarphone

          I’m sorry valley p but you just don’t have the intelligence to have this conversation. You need to read more and go back to econ 101. You want to blame Republicans and Bush and whomever you don’t like but everybody had a hand in it. Just because a bubble popped in say, 2008, doesn’t mean that it was created the year or two before. This economy is so robust that it took decades and people have been warning of it for 10 years that I know of. Trouble is, you just started paying attention.

          But beyond any of this, Obama is doing all the wrong things to bring it back. Like you, he hasn’t the brain power nor the philosophy to do the right thing. A pure politician and he’s killing the country. Is a prof at the U of W good enough for you?:

          http://www.weeklystandard.com/blogs/stimulus-terrible-thing-waste

          *Three political scientists, James G. Gimpel and Frances E. Lee of the University of Maryland, and Rebecca U. Thorpe of the University of Washington, presented a devastating critique of the first stimulus bill at the annual meeting of the American Political Science Association in Washington, D.C. last week.

          Their paper, titled “The Distributive Politics of the Federal Stimulus: The Geography of the American Recovery and Reinvestment Act (ARRA) of 2009,” finds that the funding allocated under last year’s massive spending measure was poorly targeted based on economic need.

          [snip]

          If the Democratic controlled Congress spreads the proceeds around the same way it did with the first spending plan, the results will benefit powerful legislative leaders and savvy Washington insiders more than people who really need it. *

          Like I said before, this “stimulus” money is a big slush fund for granting multi-million dollar favors to the connected while the little guy starves and will end up paying for it with huge tax hikes and rotten unemployment numbers for decades. Just like the “Lost Decades” of the Japanese.

          Have a nice day.

          • valley p

            Yes well thanks for the IQ evaluation. But since your source of wisdom is the Weekly Standard, not an economics journal, I’ll somehow survive your negative evaluation.

            The bubble did not only “pop” in 2008. It FORMED from 2001 to 2006, then stagnated, then popped and took the financial system with it. The start date is as important as the end date if you want to have a cognitive grip on what happened. “Everybody” did not have a hand in it, though most of us had a hand on it. That is a way of avoiding placing responsibility where it belongs.

            Case-Shiller recently published an historic chart of US house prices from the 1890s to the present. It is way revealing. House prices relative to everything else were near constant for over 100 years (within 25% of a baseline). In 2001 house values jumped the track, and by late 2005 reached 200% of the historic mean. This was a total aberration, and demonstrated a classic investment bubble.

            The housing bubble had a clear, measurable timeline….a start and an end that took about 5 years It did not simply happen for no reason or for a million reasons. Every investment bubble has a similar pattern. Prices of whatever rise above value norms, investment chases the increasing value speculatively rather than the inherent value, momentum becomes self reinforcing until the last investor enters. Tulips, South sea spices, railroads, stocks in the 1920s, real estate in Japan, dot.com, and now the US housing market. This is an inherent failure of capitalism based on human tendencies to follow the leader and think they are outsmarting him. It is why governments regulate and intervene in markets,because absent that markets can and will fail spectacularly and take a national or international economy down with them.

            Greenspan, Bush, Phil Graham and the whole nutty conservatives who got us into this mess believed, and you apparently still believe, that markets are perfect and self correcting. Sure they are if you don’t mind decade long depressions. And yes, Clinton and Larry Summers, among other Democrats, drank the cool aid and went along with deregulation of financial markets. But the ideology behind it was Republican, not Democratic.

            (It is amusing to me that people who consider themselves literate in economics ignore the psychology and historic fact of bubbles. I suspect it is because free market fundamentalists cannot face the fact that markets do fail).

            No my friend, I did not just start paying attention. I’ve been invested in real estate since the late 1970s. I know value, and I know when values get out of whack. I watched my own net worth soar for reasons that had nothing to do with me, and I watched that worth land back to reality. I was a paper millionaire for a few months. Like everyone else, I can’t predict when the last fool will rush in or what the cause will be to prevent the next one from coming in. If I could do that I would have made a pile a long time ago, because opportunities abound.

            Your take on the stimulus is also amusing. Read the objective CBO report and put your Weekly Standard down. No stimulus = no economic growth over the past year. Of course a rushed spending of 750B is going to have flaws. Of course its going to be a far less than perfect allocation of resources. Who bloody well cares? Keynes said that in a serious financial crisis, dumping enough dollars from airplanes would probably be sufficient because the whole point is to get money circulating again, not to get it flowing to the highest value. But them Gimpel et al knew that right?

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