Obama loses his team as econ­omy loses steam

The Washington Times Weekly - - Politics - BY DAVID BOYER

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.”

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.