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Showing posts with label AustinGoolsbee. Show all posts
Showing posts with label AustinGoolsbee. Show all posts

Rep. Paul Ryan versus Goolsbee



For an academic, Goolsbee has a bad habit of either just following Democratic talking points or just making things up.  Points that I know he is sufficiently smart enough not to believe.  In the transcript below he has no problem attacking Romney for a company going under after Romney had left Bain,  and fails to acknowledge the inaccuracy of his attacks.  Ryan's comment was about the large portion of government money going to Obama supporters, not that all of it did.  Goolsbee's reference to a single McCain supporter is completely irrelevant.  The hope that "the Obama philosophy [is] to try to transform the government into only picking winners" is something that I can't believe Goolsbee believes.  How does it address the question of what is actually happening?  Why does Goolsbee believe that the government will have a higher success rate than private individuals investing their own money?  Even Wallace finds it necessary to bring Goolsbee back on track.  The transcript from Fox News Sunday is available here:

WALLACE: But let me just ask you, sir, do you see anything wrong with what Bain Capital did, and what lots of money, millions of dollars into this steel industry, the time when the steel was in trouble, what's wrong with that? 
GOOLSBEE: Well, it depends on how they did it. And as I say, they ought to turn over the annual records of the company.If you want to establish they did not have kind of a leverage buy out mentality of pulling the resources out of the company -- turn over the records and let the people see what the business record was. Don't just pick two or three companies that are the success stories and say look at these because that invites the ones that went wrong.In this case, the company did horribly but the investors did great. So, I think it's a little bit different than a normal investor philosophy which if we can turn the company around in a positive way, we benefit. This was the case where they canceled the pension, they drove the company into the ground but the investors from Bain actually profited a great deal. 
WALLACE: Let me follow up with Congressman Paul Ryan.Because the Obama campaign says the point of Romney economics is to make money for Bain, to make money for their investors, even if all of the workers get wiped out. And in this particular case, with the steel mill in Kansas City, the workers and that plant went bankrupt. The 750 workers were laid off and Bain did make millions of dollars in profits. 
RYAN: You know what's ironic about this, Chris, Mitt Romney was running the Olympics during this time. He wasn't even running Bain during the time period in question.I think the individual if I'm not mistaken who was running Bain is a big Obama contributor.But for the point, Chris, what Bain did was they used private capital to help struggling businesses. What President Obama is doing is he's gambling with taxpayer money and giving money to corporate contributors, to campaign contributors like Solyndra and he's losing taxpayer money.So, what we have in the Obama administration is this crony capitalism, this corporate welfare where President Obama thinks it's right that we taxpayer dollars to give to private companies and take bets on these private companies. That's wrong.What is right is a private sector that you have risked that capital. You put capital in businesses whether they're struggling or not to try and grow those businesses, some succeed, some don't. On the net, when on Mitt Romney ran Bain, they were very successful. They created thousands of jobs, great success stories.But for the point, we don't think that the government should be in the position of picking winners or losers in the economy which is the result of the president's economics.  
WALLACE: Let me -- 
RYAN: The result of it is, we have stagnation. 
WALLACE: Let me let Mr. Goolsbee into that.I mean, what about the argument that, you know, it's the private sector. If companies want to take a chance, they take a chance. But the government shouldn't be picking winners and losers. 
GOOLSBEE: Well, that's two different arguments. The first one I actually think is a little bit cheeky because in several of these bankruptcy cases, you saw the investors profit by dumping the pension on to the government and actually getting bailouts from the government, which helped to cover the profits that were going to the investors.On the picking of winners, it is absolutely not the Obama philosophy to try to transform the government into only picking winners. By that I think Congressman Ryan is referring to things like in the midst of the crisis deciding to save General Motors and the auto industry. 
WALLACE: I think wait a minute. Without speaking for him, I think he's talking about things like Solyndra. . . .
New National Review piece: Goolsbee’s Gaffes

New National Review piece: Goolsbee’s Gaffes

My piece at National Review Online starts this way:

The Obama administration is having a difficult time explaining the unemployment rate, which has been above 9 percent for 27 consecutive months and is today 1.3 percentage points higher than it was when Obama took office. The October numbers, due to be released on Friday, are unlikely to look any better. So, his administration goes to great lengths to spin its own unique set of facts.

Just look at Austan Goolsbee’s Friday interview on Sean Hannity’s radio show. Despite having stepped down as Obama’s chief economic advisor in August, Goolsbee continues to do media shows supporting Obama’s economic policies. Goolsbee declared: “I deal only in facts, Sean.” Here is a simple fact check of Mr. Goolsbee’s claims.

Hannity: We heard that unemployment wasn’t going to go above 8 percent.

Goolsbee: When they made that 8 percent prediction, that was the same prediction being made by everyone. But you forget the other half of the thing, which is if you did nothing, the rate would go to 8.9 percent, and it was already above that before the first part of the stimulus even went out.


Mr. Goolsbee is just plain wrong. When the Obama administration got into office, they made optimistic promises about their stimulus program, claiming that during 2009, unemployment would stop rising and then fall. The unemployment rate in January was 7.8 percent. In late February, the administration claimed that it would average just 8.1 percent for the year if the Stimulus was enacted. . . .
Alan Krueger, Obama's nominee to head the Council of Economic Advisers

Alan Krueger, Obama's nominee to head the Council of Economic Advisers

Austan Goolsbee did his dissertation trying to show that higher tax rates didn't reduce how hard people worked. Obama's new nominee for that position, Alan Krueger, has a very similar set of beliefs. Krueger argued for example that higher minimum wages do not impact how many jobs are available for low wage workers. This guy fits Obama's view of the world and economics very well. From The Hill newspaper:



With the economy in dire straits in January 2009, Krueger, a Princeton economics professor, wrote that a consumption tax would be one possible tool to keep longer-term deficits in check as the government worked to stimulate the economy.



Krueger also stressed that he was not sure whether consumption taxes were the best way to proceed, only that the idea was worth considering. But he added that a 5 percent national sales tax could create an extra $500 billion per year in revenue “and fill a considerable hole in the budget outlook.”



“The prospect of greater revenue flowing into federal coffers would probably help lower long-term interest rates because the government would need to borrow less down the road, and further bolster the economy,” Krueger wrote on The New York Times website. . . .
Obama won't take responsibility for economy

Obama won't take responsibility for economy

Here is part of an interview that Sean Hannity had with Austan Goolsbee. Personally, I think that this interview was quite telling. In response to Obama's broken promises, Goolsbee blames the bad economy and the high unemployment rate this year on the high price of oil, but when Sean brings up that there was high oil prices during the last year of the Bush administration, Goolsbee wants to have it both ways. Obviously he wants to say that high oil prices caused problems back then, but that has clearly not been what Obama has blamed for the problems in 2008.



Of course back in 2008, Obama blamed the high prices on oil speculators and promised a crack down to reduce prices if he were president. Of course, putting speculators in jail would make things worse, not better, but why isn't Obama doing what he promised here?



Corzine said Obama's plan aims to close the so-called Enron loophole, which exempts some energy speculators who trade electronically from U.S. regulation. It takes its name from the now-collapsed energy firm that benefited from the law. . . .



The loophole is "one example of the special interest politics that put the interests of Big Oil and speculators ahead of the interests of working people," Obama's campaign said in a statement. . . .




As the claims about earthquakes hurting the economy, I thought that all these Keynesians had been arguing that wars and other disasters helped. Remember Krugman's claim:



If we discovered that, you know, space aliens were planning to attack and we needed a massive buildup to counter the space alien threat and really inflation and budget deficits took secondary place to that, this slump would be over in 18 months. . . .




Other Democrats point to Hurricanes as a way to create jobs:



Gov. Beverly Perdue (D-NC): "obviously there will be some employment as people rebuild and prepare. This morning they said there's at least 27,000 or 28,000 structures that have an opportunity to be hit by the storm. So, we'll know by Saturday or Sunday. But all of us want jobs, but this isn't a way to get them quite frankly."




Goolsbee's interview with Hannity:



Hannity: What went wrong?



Goolsbee: Respectfully, Sean you are mixing up the time frame there. In the year 2010 which is when most of the clips when the president was saying we were going to grow again. We were growing and over that 17 months we added two-and-a-half million jobs.



Now, at the beginning of this year we get earthquakes, tsunamis, revolutions in the Middle East, European financial crises, now they even have earthquakes out of Washington, D.C. I mean, we've had a series of things that have put some heavy blows and slowed the economy back down again. But, I think it's a little -- I don't think you want to confuse something that is way down and starting to grow out.



Hannity: . . . He said that he was going to create millions of jobs. He said that he would cut the deficit in half. He said the unemployment rate would stay below 8 percent. Those were promises that he made as a candidate, none of which have actually come true. Are you actually going to make the case that the Arab Spring and the Japanese earthquake had a more significant economic impact than say 9/11 on the economy or Katrina on the economy?



Goolsbee: With the price of gas shooting up to four dollars a gallon affected everybody out and I was just very direct way.



Hannity: It happened in the Bush years . . .



Goolsbee: It happened at the end of the Bush years and then preceded the worst financial crisis in all of our lifetimes, so I don't know if that's necessarily the perfect example.



Hannity: Oh, Alright . . .



Goolsbee: We face a downturn where we lose a significant number of jobs 7, 8 pushing up to 9 million in the downturn. But let's not get into a thing where a guy takes your TV up to the balcony drops it off and says that the last I saw the looks fine. When the president takes office we're in the midst of what is now recognized as the worst downturn since we have had data in the 1940s.
Can anyone make sense of Goolsbee's statements here?

Can anyone make sense of Goolsbee's statements here?

So Goolsbee says that he agrees that "If the market wants to produce clean energy, it'll produce clean energy," but he acknowledges this despite supporting massive subsidies to get the companies to produce products that they wouldn't produce without the subsidies. From an interview with Larry Kudlow.



Mr. GOOLSBEE: . . . Now it seems like you're making fun of some of the alternative energy stuff, but if you look at China, if you look at Europe and if you look at a lot of the faster growing regions of the world, they're heavily investing in it.



KUDLOW: It's been a dismal failure in Europe.



Mr. GOOLSBEE: (Unintelligible)...alternative energy.



KUDLOW: It's been a dismal failure in Spain. It's been a dismal failure in Europe. I say, Austan, if the market...



Mr. GOOLSBEE: It seems like in China and Brazil it's been quite a success.



KUDLOW: If the market wants to produce clean energy, it'll produce clean energy. Natural gas from shale is clean energy.



Mr. GOOLSBEE: Look, I agree with that.



KUDLOW: I just don't see why we don't...



Mr. GOOLSBEE: I agree with that.



KUDLOW: ...call the EPA dogs off. That's one of these regulatory issues. Call the National Labor Relation dogs off of Boeing, Austan. In other words, some of this stuff, there's very little presidents can do. I get that.



Mr. GOOLSBEE: OK. [I don't think that Goolsbee is conceding anything with this last OK.]

Newest Fox News piece: Seven Myths About the Looming Debt-Ceiling 'Disaster'

My newest piece starts this way:

If Congress and the president don't raise the debt ceiling, the consequences will be disastrous, politicians and pundits tell us, -- the equivalent of an economic Armageddon. And President Obama warns that the consequences are so dire that he cannot possibly tolerate any delay in making an agreement. He announced yesterday that any debt deal must be completed by today, July 15th.

According to Treasury Secretary Timothy F. Geithner, failure to raise the debt ceiling limit will cause the United States to default and "cause a financial crisis potentially more severe than the crisis from which we are only now starting to recover.”
On Thursday, he renewed these warnings. And President Obama alarmed retired Americans this week: "I cannot guarantee that those [Social Security] checks go out on August 3rd if we haven't resolved this issue. Because there may simply not be the money in the coffers to do it."

But the list of terrible things to come, if the government is stopped from continued deficit spending, goes on. Failure to raise the ceiling, it is warned, will dramatically raise mortgage interest rates, cause housing sales to plunge, create panic on world financial markets, and destroy the value of the dollar.

Austan Goolsbee, Obama's head of his Counsel of Economic Advisers, went so far this week as to blame the continued slow economic recovery on those few politicians who are against raising the debt ceiling. "[I]t's important we remove this wet blanket of uncertainty that is permeating the private sector where they don't know that the government -- there are people actively advocating that the government declare it's not going to pay its bills," he told MSNBC. Yet, the slow recovery has been going on for over two years, well before Republicans obtained control of the House of Representatives.

A new CBS News/New York Times poll finds that Americans oppose increasing the debt ceiling, by a 69 to 24 percent margin.
Mr. Obama dismissed this finding recently and, as usual, he believes he knows better. According to him, Americans just don't understand the complexities of the arguments: "Let me distinguish between professional politicians and the public at large. The public is not paying close attention to the ins and outs of how a Treasury (bond) auction goes. They shouldn't. . . . They've got a lot of other things on their plate. We're paid to worry about it. . . . Now, I will say that some of the professional politicians know better. And for them to say that we shouldn't be raising the debt ceiling is irresponsible. They know better."

But the general public is right. There is an overload from all the doomsday predictions. Earlier this year, before the debt limit was hit on May 21, the Obama administration already used the same scare tactics.

Here's a look at seven myths that the Obama administration is pushing on the American people: . . .









Obama at his press conference today was asked what he was willing to cut in spending (at 11:27 into the video): "You know, I am not going to get into specifics." At 13:20, "But if you are trying to get to 2.4 trillion without any revenue then you are effectively gutting a whole bunch of discretion domestic spending that is going to be too burdensome, that is not something that I am going to support." Note that this is $2.4 trillion out of $46 trillion.

Fox News has an online poll asking people whether the threat of default is a "Scare Tactic." The poll is available here. This discussion by Rove is interesting:



Note: I have been asked about the 14th Amendment claim. For those who need more than the link in the piece, the Supreme Court decision in Perry v. United States (1935) ruled that any legally incurred debt must be paid.

The Fourteenth Amendment, in its fourth section, explicitly declares: "The validity of the public debt of the United States, authorized by law, . . . shall not be questioned." While this provision was undoubtedly inspired by the desire to put beyond question the obligations of the government issued during the Civil War, its language indicates a broader connotation. We regard it as confirmatory of a fundamental principle which applies as well to the government bonds in question, and to others duly authorized by the Congress, as to those issued before the Amendment was adopted. Nor can we perceive any reason for not considering the expression "the validity of the public debt" as embracing whatever concerns the integrity of the public obligations. . . .
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