Thursday, February 11, 2010

Do Macro Economists Have a Clue?

The Hill reports today:

Christina Romer, chairwoman of the president's Council of Economic Advisers, said the stimulus that pumped about $800 billion into the economy has been an "unsung hero of the past year." Roughly 700,000 jobs were lost monthly before the stimulus was passed in February 2009, far more than the 69,000 jobs lost per month during the last quarter of 2009, the report noted.

The problem is that her January 11, 2009 report from the soon to be White House was so far off that there is zero credibility from anything she says. In addition her January 11, 2009 report contradicts the reports she and her husband had published just a year earlier. At what point do facts count?

Romer also published a report today discussing the economy. Here is what she touts as acomplishments:

Working with Congress, we have already achieved a great deal. The extension of the Children’s Health Insurance Program will bring coverage to as many as 4 million more children. The Recovery Act provided support for unemployed workers to help them maintain health insurance benefits and made pioneering investments in health information technology, health centers, and research into which treatments are likely to work best. Both houses of Congress have passed reform legislation that would do so much more to slow the growth rate of health care costs, and make insurance coverage more secure for those who have it and affordable for the millions of Americans who do not. Successful completion of reform legislation is essential to our long-run economic prosperity, taming our government budget deficit, and making American families more secure in their health insurance coverage.

In fact the economy was failing due to the collapse as perceived of the financial institutions and the housing market. Frankly little has been done to restart housing other than taking over Freddie and Fannie. It is still stalled. Wall Street on the other hand has recovered as evidenced by the re-institution of their bonus pool, built on free money from the FED. The Congressional Health Care Plans create massive Government controls over health care, evidenced by the Comparative Clinical Effectiveness fiasco! And Romer considers this progress. At what point does an honest macro economist say that they really do not have a clue! Perhaps Diogenes would never have found an honest one.