Obama loses his team as economy loses steam
President Obama’s chief economist is departing as the administration’s nearly trillion-dollar recovery is losing steam and Mr. Obama concedes that lackluster job growth could become a trend.
“Obviously, we’re experiencing some head winds,” Mr. Obama said June 7 about a rise in the unemployment rate to 9.1 percent in May. “We don’t yet know whether this is a onemonth episode or a longer trend.”
The president added, “Our task is to not panic, not overreact, to make sure that we’ve got a plan.”
But the advisers who helped Mr. Obama create that plan are leaving or have gone. Austan Goolsbee, chairman of the White House Council of Economic Advisers, announced June 6 that he is leaving his post soon to return to a teaching position at the University of Chicago.
Former council Chairwoman Christina Romer, former senior economic adviser Lawrence H. Summers and budget director Peter R. Orszag departed last year. Jared Bernstein, economic adviser to Vice President Joseph R. Biden, left last month.
Leadership at the Commerce Department is in flux, with outgoing Secretary Gary F. Locke headed for the ambassadorship to China and his replacement, John Bryson, facing a slow confirmation process in the Senate. The core of Mr. Obama’s remaining economic team is led by Treasury Secretary Timothy F. Geithner and Gene Sperling, head of the National Economic Council.
Amid that turnover, employers added 54,000 payroll jobs in May, the fewest in eight months.
“This jobs repor t, which would be weak in any economy, comes at a particularly devastating time, when the labor market remains 6.9 million payroll jobs below where it was at the official start of the recession three years and five months ago,” Heidi Shierholz of the Economic Policy Institute said in her report on the data for May.
The sputtering recovery is providing ample ammunition for Republican presidential candidates Mitt Romney and Tim Pawlenty, both of whom officially began their campaigns in recent weeks.
Mr. Obama’s job-approval numbers are falling with the bad economic reports. Unemployment in May was 16.2 percent among blacks and 11.9 percent for Hispanics.
The National Republican Congressional Committee called Mr. Goolsbee’s position “the job no one wants.”
Said Republican strategist Ron Bonjean, “Rearranging the deck chairs on the Titanic with this resignation won’t create new jobs or a better economic climate. Instead of campaigning for re-election, it would be wise for Obama to work with Republicans on progrowth policies that encourage businesses to hire more workers.”
Mark Weisbrot, co-director of the Washington-based Center for Economic and Policy Research, said Mr. Goolsbee may have been frustrated by the president’s decision to negotiate with Republicans on short-
Employers added 54,000 payroll jobs in May, the fewest in eight months. “This jobs report, which would be weak in any economy, comes at a particularly devastating time, when the labor market remains 6.9 million payroll jobs below where it was at the official start of the recession three years and five months ago,” Heidi Shierholz of the Economic Policy Institute said in her report on the data for May.
term spending cuts to reduce deficits.
“He’s a reasonable economist,” he said of Mr. Goolsbee. “He knows they’re doing the wrong thing.”
The president and his advisers point out that the economy has added about 2 million jobs since Mr. Obama took office. The president said he has put the country on the right path for growth.
“I’m not concerned about a double-dip recession,” Mr. Obama said at a joint news conference with German Chancellor Angela Merkel.
“I am concerned about the fact that the recovery we’re on is not producing jobs as quickly as I want it to happen. We’ve still got some enormous work to do, and as long as there are some folks out there who are unemployed, looking for work, then every morning when I wake up, I’m going to be thinking about how we can get them back to work.”
The report from the Economic Policy Institute said the May unemployment rate “hugely understates” the gap in the labor market because simply keeping up with the growth in the working-age population would have required adding 4.1 million jobs since the recession began in December 2007.
That means the labor market would need to have added 11 million jobs by now to get back to the pre-recession unemployment rate of 5.0 percent.
Mr. Obama said people need to remember how close the world economy came to “disaster” two years ago. Looking at Mrs. Merkel for support, he said they try to take a long-range view of economic recovery plans.
“What we try not to do is look day-to-day, at whatever is happening in the marketplace or whatever headlines are taking place, and be reactive,” Mr. Obama said.
“ Our job is to set a course for the medium and the long term that assures not only both our economies grow, but the world economy is stable and prosperous.”