Wednesday, September 1, 2010

Romer's Parting Shot

Tacoma Narrows Bridge Collapse from Library of Congress no Copyright attached.

Ms Romer is quoted in The Hill as making the following as her parting shots ( her total speech is here ):

Romer defended the Obama administration's 2009 stimulus bill, initially estimated at $787 billion and later revised to $814 billion, as contributing to a "dramatic" turnaround in the economy from the depths of the crisis. The stimulus, she said, "made the difference between a second Great Depression and a slow but genuine recovery."

Yet we have hardly seen a turn around and moreover her projections were never achieved.

But Romer urged congressional lawmakers to find the "will and the wisdom" to approve additional tax cuts and spending measures to help an economy that is witnessing flagging growth rates and near double-digit unemployment.

Spend more money on what? Clearly what has been spent has for the most part been politically directed, teachers and unions, and the like. They do not create value, they absorb cash, which of course goes back to support elections, Democrats, to do the same. A deadly cycle.

"The only surefire ways for policymakers to substantially increase aggregate demand in the short run are for the government to spend more and tax less," Romer said. "The key is that we need to take action and we need to do it quickly."

But we had taken action per her directions and the results were no where near what she predicted. So why should we listen to her now. What has changed, what has improved?

Romer mentioned additional tax cuts for the middle class, spending on infrastructure and a pending bill to boost small-business lending. She also supported additional efforts to promote exports and finalize new trade agreements. Romer defended the administration's regulatory approach as "prudent" for the economy.

One could use the old Democrat phrases, "Have you no shame Ms Romer, have you no shame!" I have been following her progress since she released her Jan 11, 2009 report on how we would do under her guidance. Well it does not take a genius to see that her predictions were well off base. So just keep quiet and go back out west and teach a course or two. It is akin to the engineer who designed the Tacoma Narrows bridge telling us that the design was great, do not worry about the collapse, just build more!