Monday, July 26, 2010

Larry Summers On Unemployment Insurance

As an economist, it must be really tough working for President Obama and advising him on the economy when, in doing so, your own past analysis and work have to be compromised.

Certainly, Christina Romer, a key economic adviser to the President, has already had to put her treatises, theories, and dissertations aside when it comes to promoting his economic policies. In fact, just last month, Romer -- in a paper co-written with her husband -- stated that the elimination of the Bush Tax Cuts would have a negative impact on the economy (Click here to See Story: Romer’s Research: Expiration of Bush Tax Cuts Will Be Highly Contractionary). Of course this totally flies in the face of the intentions of the Obama and the Democrats who just can't wait to let the Bush cuts expire in January so they can spend and waste even more money on all their left-wing pet projects.

Then, there's Larry Summers.

Like Romer, he's another key economic adviser to the Presicent and no slouch when it comes to economics. He worked for President Reagan when tax cuts were used to drive the economy following the Carter recession. He was also an adviser to President Clinton during a very robust time in our economy. Then, too, early on in his career, he was the chief economist for the World Bank. And, before joining the current administration, he was the President of Harvard University. Now he's the Director of Obama's National Economic Council.

Summers, like Romer, has written much on a variety of topics with regard to economic practice and theory. However, one article is especially interesting in view of the fact that Obama just signed another extension of unemployment insurance into law. In 2005, writing for the highly sought out and respected Concise Encyclopedia of Economics, Summers wrote an extremely interesting economic argument "against" extending unemployment insurance in a paper that was simply titled "Unemployment". In that article, Larry argues that welfare and extended unemployment insurance only worsen and sustain jobless levels because it acts as a deterrent to the unemployed looking for any new job. His conclusions in that paper are firmly based on research and thorough resourced empirical data.

With Summers' article in mind, you really have to wonder from whom Obama is actually getting his economic advice. Clearly, it's not from Summers. And, as outlined previously, it doesn't appear to be from Romer, either. In fact, Obama indirectly slammed Larry Summers' work when, in targeting the GOP leadership, he made this comment: "These leaders...are advancing a misguided notion that emergency relief somehow discourages people from looking for a job..." A "misguided notion"? Oh, really? Then Larry Summers, too, must be misguided!

Of course, the indirect attacks on Summers aren't just exclusively confined to Obama. Nancy Pelosi, too, took her shot at Larry when she made the comment -- just a couple of weeks ago -- that "most economists" believe that extending "unemployment insurance is the best way to stimulate the economy." Obviously, with that comment, Larry's beliefs are just marginal because he isn't, in the words of Nancy, in the category of "most economists".

The reality is that most of the economists who are working for the administration must have to bite their tongues when promoting the economic policies of the President. Their past and current works often tell a different story than what Obama would have us all believe. This economy is suffering because this President isn't truly getting advice from his advisers. What we are actually getting is a bunch of economic policies that are designed to destroy the economy; not recover it from a deep recession. Romer and Summer's are merely acting as useful idiots in Obama's real quest to push his radical, ideological agenda.

1 comment:

Cheryl Pass said...

Answer to Obama's advisor: Socialist International AKA Soros....the man who has broken nations and the Bank of England. You see, the more debt the sooner the implosion. Shorting the dollar is Soros' tiddly-winks. So more entitlements, more debt, more dependence, etc. And you are correct, Summers and Romer are useful idiots getting paid to continue the downward spiral. Bet they have golden parachutes.