Chief White House Economic Advisor Admits Her Forecast on Unemployment Was 'So Far Off'

[I AM NOT THAT GUY 5,715]

(CNSNews.com) - Christina Romer, the departing chair of the White House Council of Economic Advisors said America’s economic “turnaround has been insufficient.” She added that the current 9.5 percent unemployment rate is “an unacceptable level by any metric.” Romer also admitted that her prediction that the American Recovery and Reinvestment Act (ARRA) would bring unemployment down to 8 percent was “so far off.”

“Employment went from falling at a rate of 700,000 jobs per month to growing at the beginning of 2010. These swings from horrifying negatives to positives are a testament to the speed and effectiveness of the policy response,” she said during her final speech as the President’s chief economic advisor at the National Press Club on Wednesday.

“Compared to the problems we face, the turnaround has been insufficient. Though the unemployment rate has come down six-tenths of a percentage point, it is still 9-and-a-half percent--an unacceptable level by any metric. Real GDP is growing, but not fast enough to create the hundreds of thousands of jobs each month that we need to, to return employment to its pre-crisis level.”

Romer admitted that her original prediction of unemployment not exceeding 8 percent if Congress passed the $787 billion Recovery Act was “so far off.”

“What the act hasn’t done ... is prevent unemployment from going above 8 percent, something else that Jared [bernstein] and I projected it would do. The reason that prediction was so far off is implicit in much of what I have been saying this afternoon,” she said.

“An estimate of what the economy will look like if a policy is adopted contains two components: a forecast of what would happen in the absence of the policy, and an estimate of the effect of the policy. As I’ve described, our estimates of the impact of the Recovery Act have proven to be quite accurate. But we, like virtually every other forecaster, failed to anticipate just how violent the recession would be in the absence of policy, and the degree to which the usual relationship between GDP and unemployment would break down.”

http://cnsnews.com/news/article/72147

[Mr. Big Dog 10,747]

Do you ever bother to read what you post?

The reason that prediction was so far off is implicit in much of what I have been saying this afternoon,” she said.

“An estimate of what the economy will look like if a policy is adopted contains two components: a forecast of what would happen in the absence of the policy, and an estimate of the effect of the policy. As I’ve described, our estimates of the impact of the Recovery Act have proven to be quite accurate. But we, like virtually every other forecaster, failed to anticipate just how violent the recession would be in the absence of policy, and the degree to which the usual relationship between GDP and unemployment would break down.”

[I AM NOT THAT GUY 5,715]

Do you ever bother to read what you post?

Do you?

[Mr. Big Dog 10,747]

Do you?

I did. I took from the subtitle you chose for this thread that you did not.

[I AM NOT THAT GUY 5,715]

I did. I took from the subtitle you chose for this thread that you did not.

Christina Romer, the departing chair of the White House Council of Economic Advisors

What does that mean to you?

[Mr. Big Dog 10,747]

What does that mean to you?

That she's taking a different role in the administration. Specifically, she'll be a member of the President's Economic Recovery Advisory Board. Changing roles within the administration doesn't equate resigning and much less being fired.

[I AM NOT THAT GUY 5,715]

That she's taking a different role in the administration. Specifically, she'll be a member of the President's Economic Recovery Advisory Board. Changing roles within the administration doesn't equate resigning and much less being fired.

The PERAB meets periodically and solicits information and ideas from all sectors to promote the growth of the economy, establish a stable and sound financial and banking system, and create jobs.

http://www.whitehouse.gov/administration/eop/perab/about

So, she is leaving a paid position with the Administration, to sit on a committee for the sole purpose of advising on the failed policy she helped implement? As what? A reverse barometer?

Christina Romer, chair of the White House Council of Economic Advisers, has resigned her post to return to her old job as an economics professor at the University of California at Berkeley, the White House said Thursday. Her resignation is effective Sept. 3.

http://www.washingtonpost.com/wp-dyn/content/article/2010/08/05/AR2010080506682.html

Edited September 5, 2010 by ##########

[Mr. Big Dog 10,747]

So, she is leaving a paid position with the Administration, to sit on a committee for the sole purpose of advising on the failed policy she helped implement? As what? A reverse barometer?

What failed policy? The stimulus package? CBO estimated that anywhere between 1.5 and 3 million more people would be out of work today had it not been for this package. There really aren't many experts out there that would deny the positive impact it had on the economy.

[I AM NOT THAT GUY 5,715]

What failed policy? The stimulus package? CBO estimated that anywhere between 1.5 and 3 million more people would be out of work today had it not been for this package. There really aren't many experts out there that would deny the positive impact it had on the economy.

Failure to meet expectations is a failure of the policy. Krugman says the measures were too timid, and now, the American people will not support any further "investment" in the economy. Other economists say the money should have been spent differently, or not at all. Bottom line is, the plan didn't work, and has only exacerbated the problem, and the Left has left us with an additional $3 trillion in debt, with nothing to show for the effort.

Edited September 5, 2010 by ##########

[Mr. Big Dog 10,747]

Failure to meet expectations is a failure of the policy. Krugman says the measures were too timid, and now, the American people will not support any further "investment" in the economy. Other economists say the money should have been spent differently, or not at all. Bottom line is, the plan didn't work, and has only exacerbated the problem, and the Left has left us with an additional $3 trillion in debt, with nothing to show for the effort.

According to the CBO, the stimulus has done what it was supposed to do - keep more people in employment than would have been the case w/o the policy. As Romer stated: "As I’ve described, our estimates of the impact of the Recovery Act have proven to be quite accurate." Yes, the premise was off. It would have been off for any other policy approach all the same. Back in 2008 and into 2009, nobody had expected the economy to take a hit that would make this the worst downturn since the 1930's. The other ticket went on record to say that the economic fundamentals remain strong. I'm sure any policy based on that premise would have had so much better an effect.

And where exactly are you taking that $3 trillion figure from?

[I AM NOT THAT GUY 5,715]

According to the CBO, the stimulus has done what it was supposed to do - keep more people in employment than would have been the case w/o the policy. As Romer stated: "As I’ve described, our estimates of the impact of the Recovery Act have proven to be quite accurate." Yes, the premise was off. It would have been off for any other policy approach all the same. Back in 2008 and into 2009, nobody had expected the economy to take a hit that would make this the worst downturn since the 1930's. The other ticket went on record to say that the economic fundamentals remain strong. I'm sure any policy based on that premise would have had so much better an effect.

And where exactly are you taking that $3 trillion figure from?

A mid-year budget review by the Obama administration forecasts the deficit will be $1.47 trillion this year and $1.42 trillion next year as the U.S. struggles to recover from the recession.

http://www.businessweek.com/news/2010-07-24/obama-budget-office-forecasts-1-47-trillion-deficit-this-year.html

[Mr. Big Dog 10,747]

A mid-year budget review by the Obama administration forecasts the deficit will be $1.47 trillion this year and $1.42 trillion next year as the U.S. struggles to recover from the recession.

Yo, genius: The deficit was over a trillion dollars a year when Obama took office. To blame the stimulus for the $3 trillion deficit since he took office is not just dishonest and ridiculous but actually quite lame.

[I AM NOT THAT GUY 5,715]

Yo, genius: The deficit was over a trillion dollars a year when Obama took office. To blame the stimulus for the $3 trillion deficit since he took office is not just dishonest and ridiculous but actually quite lame.

Why you getting so personal?

[Mr. Big Dog 10,747]

Why you getting so personal?

You can't attribute the entire deficit to the stimulus and then call it failed policy. Talk about the wrong premise.

ETA: Your graph proves my point, btw. The '09 deficit is largely what Obama inherited.

Edited September 6, 2010 by Mr. Big Dog

[I AM NOT THAT GUY 5,715]

You can't attribute the entire deficit to the stimulus and then call it failed policy. Talk about the wrong premise.

ETA: Your graph proves my point, btw. The '09 deficit is largely what Obama inherited.

Try again.

President Bush's budget chief blamed the faltering economy and the bipartisan stimulus package for the record $482 billion deficit the White House predicted for the 2009 budget year.

Jim Nussle, the director of the Office of Management and Budget, said the deficit would be about 3.3 percent of the nation's gross domestic product, the measure of the nation's total economy.

The fiscal year begins October 1, 2008.

http://articles.cnn.com/2008-07-28/politics/2009.deficit_1_budget-deficit-bipartisan-stimulus-federal-deficit?_s=PM:POLITICS