Christina Romer, the chairman of President Obama’s Council of Economic Advisers becomes the first high-profile rodent to leave the foundering economic ship that is Obama’s “fundamentally transformed” America.
Apparently Romer took a lesson from the little guy at the bottom of this picture.
Romer, whose best known work before taking the Obama Administration job is probably a paper she wrote with her husband arguing that tax rate hikes are extremely negative for economic growth, then came to DC and all but wrote the horrendously wasteful “stimulus” plan and co-authored a paper with Jared Bernstein saying that unemployment would stay below 8 percent if the “stimulus” passed, with this visual representation of their prediction:
Of course, unemployment is now well above the “without recovery plan” line, though sputtering Keynesians who apparently have never learned a single lesson from economic history still say “it would have been so much worse if we hadn’t incinerated a trillion dollars of your children’s money.” (Well, they don’t say it exactly like that…)
To be fair to Romer, her paper argues that tax hikes are extremely negative unless they are perceived as being put in place in order to reduce a big budget deficit. The problem with her argument in today’s application is that she assumes credit markets will see tax hikes as actually cutting the deficit, which would indeed be a long-term positive. But with a government which shows absolutely no interest in cutting spending, which has made it clear that any new tax revenue will be used to increase spending (public union vote buying to be precise) even further rather than to cut the deficit, Romer’s caveat becomes meaningless.
However, within her happy little world in which there is a shred of fiscal responsibility in our federal government, it is then consistent with her framework to argue for spending a trillion dollars. After all, that money would massively increase the deficit and then allow her to argue for those painless tax hikes.
Speaking of hikes, I’m pleased to see Christina Romer take one. The questions now become which species of ground-dwelling mammal will replace her and which will be the next to flee the Obama ship of state as it takes on water at a record pace.