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The White House's economic message

"Today’s employment report shows continued signs of gradual labor market recovery," reads the first line of Christina Romer's analysis of the May jobs report. She emphasizes the 83,000 jobs created in the private sector (the 125,000 net job loss is due to census jobs expiring), and says that non-census employment rose by 100,000. That's true, and it may be an important way to look at it, but the census jobs were still jobs, and we're not growing nearly fast enough to reabsorb those workers.

Romer's blog post and recent statements from and meetings with administration officials suggest that the White House's broad approach on the economy is to emphasize how much improvement there is, rather than how much needs to be done. That makes political sense, of course: The economy has largely stabilized, which is a huge achievement, and the only chance Democrats have in the midterms is convincing the country that they're responsible for that stabilization. But it also makes it difficult for the White House to run around with its hair on fire about how bad things are and how necessary it is that Congress doesn't abandon the labor market in order to pretend to care about the deficit.

By Ezra Klein  |  July 2, 2010; 10:14 AM ET
Categories:  Economic Policy  
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Comments

i think it's an exceptionally foolish move politically. talk about seeming out of touch....

Posted by: howard16 | July 2, 2010 10:20 AM | Report abuse

The REAL PROBLEM Obama is facing is that most Americans KNOW that when gven a choice between passing legislation that facilitates the creation of private sector jobs OR passing radically leftist policies (that tend to KILL JOBS)---Obama chooses Door B every time!

No message changes this!

Threats by the EPA to tax CO2 EMissions kills jobs.

Cap & Trade like taxes on carbon kills jobs.

Drilling Moratorium kills jobs.

Increasing employers healthcare liabilities kills jobs.

Empowering the Executive Branch with new powers to strangle small businesses to help Goldman-Sachs kills any jobs outside of the big banks.

Obama has done far more to kill jobs than the passage of even a less corrupt Stimulus bill could have ever helped.

Obama appears to be working against most out-of-work Americans who are genuinely interested in getting a job.

Posted by: FastEddieO007 | July 2, 2010 10:28 AM | Report abuse

Do you believe Christina Romer's supposed rational analysis of the economy could have more to do with the party-affiliation of the residents in the White House rather than ACTUAL facts?

I do.

Posted by: FastEddieO007 | July 2, 2010 10:30 AM | Report abuse

This post and its predecessor make an interesting pair. What is the unified message?

From the facts, I'm hearing that (a) the economy has stabilized and (b) job growth isn't all that great, but could be considerably worse.

From the ruling party's political machine, I'm hearing that (c) we should ignore the effect of the Bush stimulus package, but pay close attention to the Obama stimulus package and (d) tax more and spend more under the save-the-economy rubric even though the economy has stabilized.

From the streets, I'm hearing that (e) nobody in Washington (or at the banks of New York) seems to have the slightest idea of what's happening or what should be done, (f) this is normal, and (g) everyone just ought to find something to do, however unprofitable or un-glamorous as it may be.

Those last aspects -- that a growing number of people are simply ignoring the federal authority of Washington -- is bothersome in that it tends to allow the ruling party in Washington to be even more irresponsible (until the collapse of the union and its banks).

Posted by: rmgregory | July 2, 2010 10:45 AM | Report abuse

"We suck less" isn't the greatest slogan. If the republican can get their stuff together on repealing HCR they can't loose.

Posted by: obrier2 | July 2, 2010 10:52 AM | Report abuse

Do we really want a system of government that will cut off subsidies to the unemployed when it is this prevalent?

It doesn't really qualify as governing to go on vacation while cutting off checks to the unemployed. the unemployment being caused by congress.

Posted by: VMzJxah | July 2, 2010 10:52 AM | Report abuse

rmgregory, what in the world do "c" and "d" mean? what bush stimulus? and what tax hikes?

Posted by: howard16 | July 2, 2010 10:53 AM | Report abuse

"White House's broad approach on the economy is to emphasize how much improvement there is, rather than how much needs to be done. "

Reminds me of G.H.W. Bush's approach in the 1992 election. Which didn't work out quite so well for him.

Posted by: jnc4p | July 2, 2010 10:57 AM | Report abuse

"We suck less" isn't the greatest slogan. If the republican can get their stuff together on repealing HCR they can't loose.

Posted by: obrier2 | July 2, 2010 10:58 AM | Report abuse

I think there needs to be an update to Keyensian theory that counts in the effects that high deficits have on the private sector.

As much as spending by government might increase acvtivity to allow for eventual private sector growth, the huge ominous debt causes many private sector businesses to hedge and remain risk-averse, since they are aware that eventually the debt will be paid for with higher taxes.

Posted by: FastEddieO007 | July 2, 2010 10:59 AM | Report abuse

Ezra Klein writes
"the White House's broad approach on the economy is to emphasize how much improvement there is, rather than how much needs to be done. That makes political sense, of course"


But, does it? At first glance, sure take credit for stabilizing the economy. But by focusing on what has gone well rather than what yet needs to be done, is the White House squandering an[other] opportunity to call for action from Congress and citizens alike? Focusing on what has been accomplished rather than what still needs to be done is playing into the hands of the short-sighted deficit hawks that are willing to pull the stimulus plug too soon. Now is not the time to back off the throttle - we need to keep cash flowing through the economy by extending unemployment benefits, again, & continuing to invest in infrastructure & new cleaner energy sources before we rest and look back and congratulate ourselves on a job well done.

Posted by: bsimon1 | July 2, 2010 11:05 AM | Report abuse

@FastEddieO007: "most Americans KNOW that when gven a choice between passing legislation that facilitates the creation of private sector jobs OR passing radically leftist policies (that tend to KILL JOBS)---Obama chooses Door B every time"

I disagree. That's conservatives in the Republican base. The tea party folks "know" that, to some extent (I disagree, BTW, as someone who didn't vote for Obama in 2008 and won't in 2012).

What people do know is that they don't have a job, or their pay has been cut, or they are underemployed, or their friends had to move out of the state because of the high taxes and high unemployment, etc.

After 2 years, midterm voters will probably be motivated to punish incumbents (or demotivated, and unwilling to show up at the polls to support them). After 4 years, likely voters will likely show up to punish incumbents, if nothing has improved.

But it won't be because they're thinking: "He's made nothing but socialist choices and his socially socialistic. And a communist."

It'll be because they look at their local economy and the financial circumstances of themselves and their friends, and if the folks in charge to a poor job of convincing the voters that they are really trying to do something ("It's Bush's fault!" is not a compelling explanation for most), then they'll get punished at the ballot box.

Posted by: Kevin_Willis | July 2, 2010 11:05 AM | Report abuse

@obrier: "If the republican can get their stuff together on repealing HCR they can't loose"

Again, HCR repeal is strictly a GOP base issue. HCR repeal won't mean much past the base.

If Republican's can't lose, it's certainly no credit to them. They haven't exactly been advancing an actual agenda, outside of Paul Ryan, and he's a little--um--severe.

Posted by: Kevin_Willis | July 2, 2010 11:08 AM | Report abuse

@howard6: "rmgregory, what in the world do 'c' and 'd' mean? what bush stimulus? and what tax hikes?"

The Bush stimulus he refers to was the original TARP, I believe. That happened under the Bush administration. Or perhaps the Bush tax cuts, which were intended to stimulate consumer spending.

Tax more: proposed bank taxes, talk about taxing the rich, letting the Bush tax cuts expire, which will be "taxing more", the term rmgregory used. Also, don't forget that tanning bed tax.

Posted by: Kevin_Willis | July 2, 2010 11:12 AM | Report abuse

"Threats by the EPA to tax CO2 EMissions kills jobs."

Kills some, creates others.

Question: which jobs are better; those in extraction industries like coal mining or oil & gas drilling, or in designing & manufacturing alt energy sources? There's no value added in digging up old solar energy & burning it, whereas developing new technology will reverse the balance of trade problem, bringing back all those dollars we've sent overseas for petrofuels & cheap junk.

Posted by: bsimon1 | July 2, 2010 11:13 AM | Report abuse

FastEddie, i know you think you're a clever lad, but really, you need to do a little homework.

what a keynesian will tell you is that government fiscal policy should be counter-cyclical and in balance over the course of the business cycle. this means that keynesians opposed the massive general fund deficits of the bush years as inappropriate during a time of growth.

(if your theory was correct, of course, then - recoiling in fear from the massive bush-era deficits - businesses should have stopped spending in the early '00s, and yet they didn't!)

as for the logic train that you suggest exists: what in the world are you talking about? my rational expectation is that taxes will increase and therefore my best move is not to improve profitability?

the reason businesses aren't expanding right now is very simple, and doesn't rely on twaddle about fear of regulation or taxes: it's because there is no obvious "r" for any "i." we have excess capacity and insufficient demand, which has nothing to do with metaphysics.

Posted by: howard16 | July 2, 2010 11:14 AM | Report abuse

Klein opines, "[C]ensus jobs were still jobs".

Census workers produced nothing but reams of paper, while the cost of their non-production was charged (without so much as a by-your-leave) to the fruits of the present and future labors of those who do produce. Klein lives in a fantasy world where government magically creates things at no cost, or in a way that somehow circumvents ordinary economic calculations. It's childish nonsense or cheap government propaganda.

Posted by: msoja | July 2, 2010 11:15 AM | Report abuse

"perhaps the Bush tax cuts, which were intended to stimulate consumer spending."

I guess we can let that fallacy die now, can't we?

Posted by: bsimon1 | July 2, 2010 11:16 AM | Report abuse

kevin_willis: we can call TARP many things, but stimulus isn't one of them, and if rmgregory is using the bush tax cuts as a discussion of stimulus, bring it on, given their failure.

as for taxes, yes, higher taxes are inevitable and have been ever since bush cut taxes without offsetting spending cuts during a growth period. however, rmgregory suggested that higher taxes were being suggested as part of a stimulus activity, which, of course, they are not: they are future taxes.

Posted by: howard16 | July 2, 2010 11:24 AM | Report abuse

msoja: without so much as a by your leave? you mean, the fact that constitution mandates a census doesn't count?

Posted by: howard16 | July 2, 2010 11:26 AM | Report abuse

I have an electronic engineering background.

The USA could achieve the greatest level of prosperity since the origination of capitalism if we adopt an economic model based around the negative feedback amplifier.

During a time of economic slowdown we should have a built-in machanism that lowers tax rates proportionally to the slow down. As the economy picks up, we should conversely start increasing tax rates.

Unfortunately we are too caught up in partisan politics (made much worse by Obama's subservient relationship to Pelosi) to ever achieve such rational policy.

Indeed Ezra Klein himself cringes at the notion of such bipartisanship...to him bipartisanship means getting 10 Republicans to sign up for Obama & Pelosi's radical transformation of USA from a Capitalistic Democracy into a government more like Mao's China.

Posted by: FastEddieO007 | July 2, 2010 11:28 AM | Report abuse

@bsimon1:

"perhaps the Bush tax cuts, which were intended to stimulate consumer spending."

I guess we can let that fallacy die now, can't we?
-------------------------
Oh, no. Give that the argument that the problem with the current stimulus is too small, we simply get to argue that the Bush tax cuts were far too small, and should have been much, much larger.

@howard: "kevin_willis: we can call TARP many things, but stimulus isn't one of them"

Fair enough. There was also the Economic Stimulus Act of 2008, which sent out stimulus checks and then there were tax credits. Perhaps rmgregory referred to that.

Posted by: Kevin_Willis | July 2, 2010 11:36 AM | Report abuse

FastEddie, you find me any member of the republican congress who would agree to such an automatic tax policy approach and we can talk.

until then, there's nothing rational about your plan, any more than there's anything rational about the notion that obama is "subservient" to pelosi: that's just typical right-wing claptrap masquerading as an analysis.

i will say, though, that i find your embrace of higher taxes at 11:28 hard to reconcile with your opposition to keynesian thought and higher taxes at 10:59. i'm sure you can explain....

Posted by: howard16 | July 2, 2010 11:36 AM | Report abuse

howard16 - It is an overstatement to say Obama is subservient to Pelosi. I apologize.

The fact is that if Kent Conrad were to suggest legislation like Tax Cuts to help ease the costs/risks on the private sector's job creation AT THE SAME TIME that Nancy Pelosi was pushing to get Cap & Trade passes, we all know Pelosi would get the lionshare of Obama's attention!

That is my point.

Posted by: FastEddieO007 | July 2, 2010 11:41 AM | Report abuse

fasteddie, there'd be two perfectly sound reasons for obama to make the choice you posit: the first is that cap-and-trade (a conservative idea, after all, right up until when liberals embraced it) is both socially important and a tremendous spur to entrepreneurial creativity, and therefore, it should be a higher priority.

and the second is, tax cuts are a poor means of job creation (as the bush tax cuts provided us a clear empirical demonstration of).

so why shouldn't obama focus on the former?

Posted by: howard16 | July 2, 2010 11:53 AM | Report abuse

howard16 wrote: "if your theory was correct, of course, then - recoiling in fear from the massive bush-era deficits - businesses should have stopped spending in the early '00s, and yet they didn't!"

My response: Bush's tax cuts were a definitive reward for exploiting new risky economic opportunities sooner rather than later.

Posted by: FastEddieO007 | July 2, 2010 11:54 AM | Report abuse

Besides the tax cuts, the only other sources of deficits were temporary war spending which looks very tiny overtime, as compared to huge structural deficits that will be likely as Obamacares cost estimates continue to rise based upon newer pesimistic views on the numbers of Americans that will likely qualify for tax subsidized healthcare services.

Posted by: FastEddieO007 | July 2, 2010 11:57 AM | Report abuse

fasteddie, better stick to electricity! those electrons behave the way you want them to!

i mean, seriously: this is your response? businesses shy away from investing out of fear of future higher taxes except when they don't?

look, if the bush tax cuts had actually spurred significant business activity, we would have seen it in the form of investment and job creation. we didn't.

and not because businesses were afraid of future taxes (which wasn't true then and isn't true now: as long as taxes are below 100%, there is always a reason for making more money if you're a business), but because tax cuts do not have the magical powers that you think they do.

Posted by: howard16 | July 2, 2010 12:01 PM | Report abuse

Cap & Trade is the most horrible scam ever concoted----and it is clearly a scam by Obama & Soror designed to pay HUGE DIVIDENDs to Chicago Climate Exchange's Founding member BP and 10% Share owner Goldman-Sachs.

Ever notice how the worst crisis Obama has had to deal with come from his biggest cronies?

And despite visceral theatrics against them, Obama remains extremely cozy with both of them, trying now to pass FinReg Reform THAT Goldman-Sachs is begging for?

And BP----who has a ton more safety violations compared to most every other American oil company---is set to win BIG once Obama & PElosi get the horrible Cap & Trade bill passed.

This is by far the most corrupt Chicago gangster thugocracy we've ever had!!!

Everybody who doesn't know, simply read about how Axelrod got Chicago Tribune to be nice to Blagovich...they make the news they need to get the corruption they want!!!

Everyone who voted for Obama over McCain should be completely ashamed of themselves.

Posted by: FastEddieO007 | July 2, 2010 12:04 PM | Report abuse

fasteddie, really, stick with the electrons, you're just babbling now.

look, bush ran in 2000 on the notion that we could cut taxes and preserve the lockbox, which is to say that we could cut taxes and still, at a minimum, have a break-even general fund status.

he then cut taxes, commited us to a $1T war, passed medicare part d and no child left behind, and broadly speaking made no effort to offset the tax cuts with spending cuts.

as a result, we ran historically unprecedented general fund deficits during a time of growth.

meanwhile, the cbo keeps finding that the aca cuts costs, but you keep speculating right-wing piffle: stopped clocks and all.

Posted by: howard16 | July 2, 2010 12:05 PM | Report abuse

"Besides the tax cuts, the only other sources of deficits were temporary war spending which looks very tiny overtime, as compared to huge structural deficits that will be likely as Obamacares cost estimates continue to rise based upon newer pesimistic views on the numbers of Americans that will likely qualify for tax subsidized healthcare services."


Medicare Part D comes to mind as well, in the category of 'Republican additions to the deficit'. Ignoring that, the obvious solution to the problem of the projections for eligibility in 'obamacare' is to reduce the number of people who become eligible. How do we do that? Create jobs. How do we create jobs? Improve cash flow. How do we improve cash flow? 1) extend unemployment benefits; 2) invest in our infrastructure; 3) invest in R&D for new technology, particularly alt energy. Yes, I'm saying Keynes, Keynes, Keynes. We screwed up during the 90s & 2000s by continuing deficit spending during the good times; but it is wrong to address that shortcoming by cutting spending now, when our economy needs it the most. To regain sound financial footing as soon as possible, we have to get cash flowing through the economy, so individuals have money to spend, so businesses have cash flow to survive & evidence of ability to repay loans to make capital available for growth. Its all about the cash flow & only the gov't can open that tap.

Posted by: bsimon1 | July 2, 2010 12:07 PM | Report abuse

fasteddie, now you've just lost your mind and are babbling incessantly. go back to the electrons, why doncha?

on the right, i understand that hysterical posturing counts as a sage position, but in the rest of the world, we like people to make some sense.

Posted by: howard16 | July 2, 2010 12:08 PM | Report abuse

If I lower the cost on a cup of lemonade, I sell more cups of lemonade.

If the federal government lowers the cost(and liabilities, i.e. legal costs) on creation of a private sector job, there will be more private sector jobs.

If a restaurant needs to hire ten more workers in order to expand its business, BUT hiring the 50th worker triggers huge healthcare liabilities and/or fines, that restaurant caps its expansion at the 49th worker.

This is WAY easier than electronics.

My guess is you have even more experience working in the private sector than Obama or Pelosi. But I'm sure Pelosi's rich banking buddies are quite happy with their ignorance.

The biggest LIE is that Pelosi and Obama care a bit about working class Americans!

Posted by: FastEddieO007 | July 2, 2010 12:11 PM | Report abuse

bsimon1: you've got your '90s confused. thanks to clinton, dems who supported higher taxes in '93, and a congressional committment to paygo, we moved by '99 to a general fund surplus. we didn't simply deficit spend during the '90s good times.

Posted by: howard16 | July 2, 2010 12:12 PM | Report abuse

fasteddie, i have some private sector work to do, so let me deal with your 12:11.

lowering the price of something doesn't guarantee that people will buy more of it. price mediates between supply and demand, and if demand isn't there, cutting the price doesn't automatically encourage demand.

more broadly, no one gets HUGE healthcare liabilities from hiring a 50th worker: stop believing what the right-wing liars tell you. HUGE has a meaning.

and finally, we've just had two decades of test tube.

in the '90s, we had an increase in taxes that right-wingers assured us would destroy the economy. instead, we had the greatest economic boom of the postwar period.

in the '00s, we had two rounds of tax cuts that right-wingers assured us would boost the economy. instead, we had a weak growth period, shoddy job creation, and system vulnerabilities exposed everywhere.

that doesn't mean that tax hikes automatically create jobs; it doesn't mean that tax cuts automatically lead to work economic performance; it does mean that your notion that the federal government is standing in the way of job creation is a little, uh, simple-minded....

Posted by: howard16 | July 2, 2010 12:19 PM | Report abuse

Kevin Willis has it right, as usual. I'll only add that "the American people" mentioned by FastEddie is some portion of the roughly half of the country that disapproves of President Obama's performance. The other roughly half of the country think he's doing, at least, mostly ok, and they either don't think he's a socialist or think that being a socialist is a good thing. The sample size of "me, my friends, and the blogs I read" does not "the American people" make.

Posted by: MosBen | July 2, 2010 12:21 PM | Report abuse

I'll also add that conservatives should really give up on repealing the ACA. There's a very good chance they won't take control of the Senate, but even if they did, there's no way they're getting to 60 votes. Repealing the ACA is a pipe dream to get people worked up, but it's not happening.

Posted by: MosBen | July 2, 2010 12:29 PM | Report abuse

Say, FastEddie, what's the inflation rate now? What are your precious private sector executives doing besides being layabouts? Those lazy idiots certainly aren't trying to create jobs and demand. For all their talk about "funemployment" and telling those lazy people to get a job, conservative layabouts are doing absolutely nothing to create now-nonexistent jobs? Why should they when conservatives in Washington are only all too willing to hand them corporate welfare that they can hoard, because deflation means they make more money doing nothing than investing in this country?

Keep up with your Limbaa-approved talking points. I know it beats thinking, but then thinking is for liberals. Conservatives are too good for that, right?

Posted by: DrSquid | July 2, 2010 1:19 PM | Report abuse

Dems message should be:

"This is where the American Recovery and Reinvesment Act was signed (with no Republicans voting in favor)."

[note massive turnaround in monthly private job change over the next 15 months]

"This is where Democrats felt the economy needed an extra boost to maintain the recovery momentum, and have since had multiple job bill versions filibustered by the Republican senators."

[note stagnation in the private job growth starting May 2010]

There is nothing else that needs said. The "Republicans are fighting the recovery tooth and nail because it is an election year and they can't let the Dems look good" meme will resonate with voters.

Posted by: eggnogfool | July 2, 2010 1:26 PM | Report abuse

FastEddieO007:

A business owner in 1984 who listened to Mondale say that taxes must go up to pay for the 1981 tax cuts and the spending increases and thus reacted to defend against this would have made a horrible mistake even if the idea that taxes must increase to cover the debts was accurate. Refusing to expand the business during a good economy would have lead to the business likely closing as other more efficient operators would destroy you. Furthermore, moving into tax hedges like Real Estate would have destroyed you in 1986 after tax reform. Private individuals won't have enough information to anticipate future taxation and will have no way to mitigate that impact anyway. The proposed refusal to act on the short term signals that overwhelm the potential long term impacts are fatal to almost all economic actors. The CEO in 1984 who cut back due to future tax hikes would have been disgraced by 1993 when they actually came.

Posted by: windshouter | July 2, 2010 2:35 PM | Report abuse

Ezra, You really have no shame trying to polish this tird. You are a complete shill for this administration.

Posted by: Bubbette1 | July 2, 2010 3:05 PM | Report abuse

Bubbette1, how is he shilling here? He posts the White House's position, and then he says that though it makes political sense to make these arguments that it makes it harder for the administration to argue strongly in favor of more stimulus. As he's said in nearly ever post of the last few months, Ezra clearly thinks more stimulus is necessary. If this is shilling than I need to get in on that action!

Posted by: MosBen | July 2, 2010 3:26 PM | Report abuse

The Bush administration and policies added $5 trillion to our national debt while resulting in ZERO net jobs gained over eight years (contrast Clinton's net 22 million jobs gained), the ense guys didn't say bo othe entire time. Not once.

Republican=no economic credibility.

Posted by: spudpuppy2000 | July 2, 2010 4:20 PM | Report abuse

The Bush administration and policies added $5 trillion to our national debt while resulting in ZERO net jobs gained over eight years (contrast Clinton's net 22 million jobs gained) while destroying the world economy, and these guys didn't say boo the entire time. Not once.

Republican=no economic credibility.

Posted by: spudpuppy2000 | July 2, 2010 4:21 PM | Report abuse

windshouter

The tax hikes came five times during the Regana administration (yup, to pay for the 1981 cuts0, and once or more during the Bush I administration (billed at the time as "the largest tax increase in US history").

Posted by: spudpuppy2000 | July 2, 2010 4:23 PM | Report abuse

@MosBen: You are obviously a product of our public school system. Please look up the definition of "shilling" and get back to us.

Ezra is a stool of the establishment. The sooner liberal rags go into bankruptcy the better for the Nation. What passes as journalism these days is a joke, as is Ezra.

Posted by: Bubbette1 | July 3, 2010 2:27 PM | Report abuse

While the "Affordable" "Care" Act might not be repealable, it could fail on its own. THe combination of effects of the iron law of unintended consequences, NEVER ONCE CONSIDERED BY KLEIN, (yet which must be massive given the size of this takeover), ordinary, expectable snafus, and the stench of the filth in which this thing was born, the filth of deal making, bribes, threats, and pocket lining, could make the whole enterprise unworkable.

Posted by: truck1 | July 5, 2010 10:12 AM | Report abuse

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