Commentary Magazine


Topic: National Economic Council

RE: A Significant Letter

I concur with Pete and the e21 authors. The e21 group not only has the benefit of Pete’s wisdom but that of a number of other key thinkers also. Keith Hennessey, formerly Assistant to the President for Economic Policy and Director of the National Economic Council under President Bush; Bill Kristol; and Andrew Laperriere, a Managing Director of International Strategy and Investment Group Inc., are on its board of advisers. And its staff and contributors includes impressive, serious economic and policy gurus. We’ll be hearing more from them in the days and weeks ahead. The group that released an open letter signed by a list of economists, business leaders, and policy wonks (including Michael Boskin, Roger Hertog, Amity Shlaes, Paul Singer, and John Taylor) is certainly going to be of critical importance in the public discussion ahead.

As the Wall Street Journal points out, this group is not alone in raising concerns about the Fed’s printing press. The e21 group has been discussing the issue with Republican office holders and potential 2012 candidates and has come on the heels of criticism of the plan both by Rep. Paul Ryan and Sarah Palin. The report explains:

“Printing money is no substitute for pro-growth fiscal policy,” said Rep. Mike Pence, an Indiana Republican who has been privy to early discussions with the group of conservatives rallying opposition to the Fed plan. He said the signatories to the letter “represent a growing chorus of Americans who know that we should be seeking to stimulate our economy with tax relief, spending restraint and regulatory reform rather than masking our fundamental problems by artificially creating inflation.”

The Fed faces potential pressure of a different sort from the left as well. Some prominent Democratic congressmen, including the current chairman of the House Financial Services Committee, have endorsed the quantitative-easing move.

If nothing else, the letter and the emergence on the scene of a group like e21 will demonstrate that Republicans are serious about weighty economic issues and focused on the long-term health of the dollar and the U.S. economy. The party of no — which really was never only about no — is getting some intellectual heft. This is good for it, but even more important for the country and the public debate.

I concur with Pete and the e21 authors. The e21 group not only has the benefit of Pete’s wisdom but that of a number of other key thinkers also. Keith Hennessey, formerly Assistant to the President for Economic Policy and Director of the National Economic Council under President Bush; Bill Kristol; and Andrew Laperriere, a Managing Director of International Strategy and Investment Group Inc., are on its board of advisers. And its staff and contributors includes impressive, serious economic and policy gurus. We’ll be hearing more from them in the days and weeks ahead. The group that released an open letter signed by a list of economists, business leaders, and policy wonks (including Michael Boskin, Roger Hertog, Amity Shlaes, Paul Singer, and John Taylor) is certainly going to be of critical importance in the public discussion ahead.

As the Wall Street Journal points out, this group is not alone in raising concerns about the Fed’s printing press. The e21 group has been discussing the issue with Republican office holders and potential 2012 candidates and has come on the heels of criticism of the plan both by Rep. Paul Ryan and Sarah Palin. The report explains:

“Printing money is no substitute for pro-growth fiscal policy,” said Rep. Mike Pence, an Indiana Republican who has been privy to early discussions with the group of conservatives rallying opposition to the Fed plan. He said the signatories to the letter “represent a growing chorus of Americans who know that we should be seeking to stimulate our economy with tax relief, spending restraint and regulatory reform rather than masking our fundamental problems by artificially creating inflation.”

The Fed faces potential pressure of a different sort from the left as well. Some prominent Democratic congressmen, including the current chairman of the House Financial Services Committee, have endorsed the quantitative-easing move.

If nothing else, the letter and the emergence on the scene of a group like e21 will demonstrate that Republicans are serious about weighty economic issues and focused on the long-term health of the dollar and the U.S. economy. The party of no — which really was never only about no — is getting some intellectual heft. This is good for it, but even more important for the country and the public debate.

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Flotsam and Jetsam

It is getting worse, not better, for the Democrats in the congressional generic polling.

The recession has been worse for men than for women, but the Obama team needs female voters. So: “The National Economic Council released a report Thursday detailing women’s economic hardships and the different ways the administration is helping to alleviate their pain. … Economist Mark Perry, visiting scholar at the American Enterprise Institute, told The Daily Caller that the lack of attention to the economic problems of men has been foolish. ‘My initial impression of the report is that it completely ignores all of the significant and disproportionate hardships faced by men in the recession. We just went through an unprecedented ‘mancession,’ and it’s still not over.’”

There are worse things than being fired by NPR. “Fox News moved swiftly to turn the controversy over Juan Williams’s firing to its advantage, offering him an expanded role and a new three-year contract Thursday morning in a deal that amounts to nearly $2 million.”

What is worse — firing Juan Williams or concealing the underlying reason for it? Fred Barnes writes: “I have no doubt that Juan’s comments about Muslims were merely a pretext. There had been prior run-ins between NPR and Juan over his appearances on Fox. But fire him over remarks that most Americans would identify with? I didn’t think the loathing of Fox would cause NPR to do something so ideologically driven, unprofessional, and bigoted. … The motto is, Fox is fair and balanced. Mainstream media types sneer at this. Juan actually embodies it. He’s both fair and balanced. NPR is neither.”

He says he’s not running. But is there a worse nightmare for Obama in 2012? “In one long year, Mr. Christie, the governor of New Jersey, has gone from little-known prosecutor to GOP rock star. The Newark native won last November on a blunt promise to fix a ‘failed state.’ He’d stop the ‘madness’ of tax hikes and chronic overspending. He’d demand New Jersey ‘live within its means,’ tackling the rich public-employee benefits driving the state off the cliff. He’d be straight-up with voters. The promises won him election; it’s the follow-through that’s won him acclaim. Democrats were appalled when he impounded $2.2 billion in spending; taxpayers cheered. The liberal class gasped when he vetoed a ‘millionaire’s tax’; business owners hurrahed. He’s demanding government unions help close $46 billion in unfunded pension liabilities. He’s tough-talking but common-sense, and his approval rating keeps going up.”

Hard to recall a worse pre-election argument than Obama’s faux science explanation for the rise of anti-Obama sentiment. A real, former psychiatrist comments: “Faced with this truly puzzling conundrum, Dr. Obama diagnoses a heretofore undiscovered psychological derangement: anxiety-induced Obama Underappreciation Syndrome, wherein an entire population is so addled by its economic anxieties as to be neurologically incapable of appreciating the ‘facts and science’ undergirding Obamacare and the other blessings their president has bestowed upon them from on high.”

If anything, a change for the worse. “A majority of voters in key battleground races say President Obama has either brought no change to Washington or has brought change for the worse. In 10 competitive House districts, 41 percent of likely voters say Obama has brought change for the worse, and 30 percent say he has made no difference.”

It is getting worse, not better, for the Democrats in the congressional generic polling.

The recession has been worse for men than for women, but the Obama team needs female voters. So: “The National Economic Council released a report Thursday detailing women’s economic hardships and the different ways the administration is helping to alleviate their pain. … Economist Mark Perry, visiting scholar at the American Enterprise Institute, told The Daily Caller that the lack of attention to the economic problems of men has been foolish. ‘My initial impression of the report is that it completely ignores all of the significant and disproportionate hardships faced by men in the recession. We just went through an unprecedented ‘mancession,’ and it’s still not over.’”

There are worse things than being fired by NPR. “Fox News moved swiftly to turn the controversy over Juan Williams’s firing to its advantage, offering him an expanded role and a new three-year contract Thursday morning in a deal that amounts to nearly $2 million.”

What is worse — firing Juan Williams or concealing the underlying reason for it? Fred Barnes writes: “I have no doubt that Juan’s comments about Muslims were merely a pretext. There had been prior run-ins between NPR and Juan over his appearances on Fox. But fire him over remarks that most Americans would identify with? I didn’t think the loathing of Fox would cause NPR to do something so ideologically driven, unprofessional, and bigoted. … The motto is, Fox is fair and balanced. Mainstream media types sneer at this. Juan actually embodies it. He’s both fair and balanced. NPR is neither.”

He says he’s not running. But is there a worse nightmare for Obama in 2012? “In one long year, Mr. Christie, the governor of New Jersey, has gone from little-known prosecutor to GOP rock star. The Newark native won last November on a blunt promise to fix a ‘failed state.’ He’d stop the ‘madness’ of tax hikes and chronic overspending. He’d demand New Jersey ‘live within its means,’ tackling the rich public-employee benefits driving the state off the cliff. He’d be straight-up with voters. The promises won him election; it’s the follow-through that’s won him acclaim. Democrats were appalled when he impounded $2.2 billion in spending; taxpayers cheered. The liberal class gasped when he vetoed a ‘millionaire’s tax’; business owners hurrahed. He’s demanding government unions help close $46 billion in unfunded pension liabilities. He’s tough-talking but common-sense, and his approval rating keeps going up.”

Hard to recall a worse pre-election argument than Obama’s faux science explanation for the rise of anti-Obama sentiment. A real, former psychiatrist comments: “Faced with this truly puzzling conundrum, Dr. Obama diagnoses a heretofore undiscovered psychological derangement: anxiety-induced Obama Underappreciation Syndrome, wherein an entire population is so addled by its economic anxieties as to be neurologically incapable of appreciating the ‘facts and science’ undergirding Obamacare and the other blessings their president has bestowed upon them from on high.”

If anything, a change for the worse. “A majority of voters in key battleground races say President Obama has either brought no change to Washington or has brought change for the worse. In 10 competitive House districts, 41 percent of likely voters say Obama has brought change for the worse, and 30 percent say he has made no difference.”

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How About a Competent Replacement for Summers?

Larry Summers is heading back to Harvard. His tenure as head of the National Economic Council was marked by escalating unemployment, a flood of red ink, and an assault on employers. The Obama team, we are told, is out looking for a “female CEO.” Aside from the irony (Summers got in hot water for suggesting that the relative paucity of women in the sciences isn’t due to discrimination but to some innate inability and lifestyle preferences), this is yet another instance in which the Obama team seems obsessed with the wrong things.

What about someone — woman or man — who knows what the heck she/he is doing and doesn’t view American business as the enemy? How about someone who thinks raising taxes in a recession is a horrid idea? The short list includes such non-CEO types as “Rebecca Blank, a Commerce Department official who oversees the Census Bureau and Bureau of Economic Analysis” and Laura Tyson, who has split her time between government and the University of California at Berkeley (not kidding). In other words, the CEO part is optional; the female part is not. There are also some real CEOs on the “only gals need apply” list.

This females-only-for-the-economic-team-captain gambit is ludicrous — the type of overt discrimination that, if evidenced in the private sector, would be illegal. It once again reveals that politics and groveling to special interests are much more important to the Obami than is sound governance.

Larry Summers is heading back to Harvard. His tenure as head of the National Economic Council was marked by escalating unemployment, a flood of red ink, and an assault on employers. The Obama team, we are told, is out looking for a “female CEO.” Aside from the irony (Summers got in hot water for suggesting that the relative paucity of women in the sciences isn’t due to discrimination but to some innate inability and lifestyle preferences), this is yet another instance in which the Obama team seems obsessed with the wrong things.

What about someone — woman or man — who knows what the heck she/he is doing and doesn’t view American business as the enemy? How about someone who thinks raising taxes in a recession is a horrid idea? The short list includes such non-CEO types as “Rebecca Blank, a Commerce Department official who oversees the Census Bureau and Bureau of Economic Analysis” and Laura Tyson, who has split her time between government and the University of California at Berkeley (not kidding). In other words, the CEO part is optional; the female part is not. There are also some real CEOs on the “only gals need apply” list.

This females-only-for-the-economic-team-captain gambit is ludicrous — the type of overt discrimination that, if evidenced in the private sector, would be illegal. It once again reveals that politics and groveling to special interests are much more important to the Obami than is sound governance.

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Setting the Stage

John Boehner’s timing is pretty good. Today, in a pre-election rabble-rousing speech, he called on Obama to can his economic team:

Virtually no one in the White House has run a small business and created jobs in the private sector. That lack of real-world, hands-on experience shows in the policies coming out of this Administration. … We have been told that the president’s economic team is ‘exhausted’ — already, his budget director and his chief economist have moved on or are about to. Clearly, they see the writing on the wall, and the president should too.

President Obama should ask for – and accept – the resignations of the remaining members of his economic team, starting with Secretary Geithner and Larry Summers, the head of the National Economic Council.

He also made other suggestions — retain the Bush tax cuts, veto job-killing bills (e.g., card check, energy tax), and support aggressive cuts in nondefense discretionary spending. And he argued for repeal of ObamaCare’s “1099 mandate”:

The president’s government takeover of health care is already wreaking havoc on employers and entrepreneurs. This is a law that – upon its enactment – triggered the creation of more than 160 boards, bureaucracies, programs, and commissions. By the end of July, Washington had already racked up nearly 3,833 pages of regulations to direct the law’s implementation.

One of the new law’s most controversial mandates requires small businesses to report any total purchases that run more than $600. … What is the point of making employers and entrepreneurs spend $17 billion to send all this paperwork to Washington, where it’s going to cost about $10 billion to log it in and file it away? Talk about overhead.

And on the same day as Boehner’s speech, this news bolstered conservatives’ argument that the economy is still in the dregs:

Housing sales in July plunged to their lowest level in more than a decade, exceeding even the grimmest forecasts. … “Truly gut-wrenching,” said Jennifer H. Lee, senior economist for BMO Capital Markets. July sales were down 27.2 percent from June. It was the lowest rate for existing-home sales, which include houses, condos, co-ops and town houses, since 1999. For sales of single-family homes, it was the lowest rate since 1995.

The chances that Obama will embrace the Minority Leader’s suggestions are nil. But after the November election, there might be something to talk about. Especially if both the economic news and the Democrats’ political fortunes continue to sink.

John Boehner’s timing is pretty good. Today, in a pre-election rabble-rousing speech, he called on Obama to can his economic team:

Virtually no one in the White House has run a small business and created jobs in the private sector. That lack of real-world, hands-on experience shows in the policies coming out of this Administration. … We have been told that the president’s economic team is ‘exhausted’ — already, his budget director and his chief economist have moved on or are about to. Clearly, they see the writing on the wall, and the president should too.

President Obama should ask for – and accept – the resignations of the remaining members of his economic team, starting with Secretary Geithner and Larry Summers, the head of the National Economic Council.

He also made other suggestions — retain the Bush tax cuts, veto job-killing bills (e.g., card check, energy tax), and support aggressive cuts in nondefense discretionary spending. And he argued for repeal of ObamaCare’s “1099 mandate”:

The president’s government takeover of health care is already wreaking havoc on employers and entrepreneurs. This is a law that – upon its enactment – triggered the creation of more than 160 boards, bureaucracies, programs, and commissions. By the end of July, Washington had already racked up nearly 3,833 pages of regulations to direct the law’s implementation.

One of the new law’s most controversial mandates requires small businesses to report any total purchases that run more than $600. … What is the point of making employers and entrepreneurs spend $17 billion to send all this paperwork to Washington, where it’s going to cost about $10 billion to log it in and file it away? Talk about overhead.

And on the same day as Boehner’s speech, this news bolstered conservatives’ argument that the economy is still in the dregs:

Housing sales in July plunged to their lowest level in more than a decade, exceeding even the grimmest forecasts. … “Truly gut-wrenching,” said Jennifer H. Lee, senior economist for BMO Capital Markets. July sales were down 27.2 percent from June. It was the lowest rate for existing-home sales, which include houses, condos, co-ops and town houses, since 1999. For sales of single-family homes, it was the lowest rate since 1995.

The chances that Obama will embrace the Minority Leader’s suggestions are nil. But after the November election, there might be something to talk about. Especially if both the economic news and the Democrats’ political fortunes continue to sink.

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Obama Economic Team Tied up in Spin

The Obama administration is lowering expectations and getting tangled up in its own spin. On one hand, the Obama economic team needs to prepare the public for a period of high unemployment:

The economy is growing again, but at a pace unlikely to quickly replace the 8.4 million jobs erased in the recession that began in late 2007. More than 11 million people are drawing unemployment insurance benefits.

“We’ve got a long way to go,” said Lawrence Summers, director of the National Economic Council. “We’ve inherited a terrible situation, the most pressing economic problems since the Great Depression in our country.” [In case you thought the Obama team was ever going to stop blaming George W. Bush, think again.]

Christina Romer, head of the White House Council of Economic Advisers, said consumers still face “a lot of head winds” from the financial crisis. For example, debt and credit difficulties are hampering stronger job growth.

They were echoing the words of Treasury Secretary Timothy Geithner, who said last week the administration was “very worried” about returning to a more normal jobless rate of around 5 percent.

Summers said Obama was preoccupied with creating jobs. “The trend has turned, but to get back to the surface, we’ve got a long way to go,” Summers said.

Preoccupied? Well, that can certainly be said of health-care reform, but what, precisely, has Obama been doing to promote job growth? Certainly raising billions and billions in new taxes in the guise of health-care “reform” and allowing the Bush tax cuts to expire aren’t helping job creation. Nor will cap-and-trade, if the Obama team has its way.

And the job picture is likely to get worse, not better, as more workers return to the job market, as this report explains:

Some economists assert that the unemployment rate, which held steady at 9.7 percent in March, is likely to be driven higher as many more such people are lured into looking for work by hopeful signs of recovery.

The number of people looking for jobs rose by more than 200,000 in March compared with February, according to the Economic Policy Institute — and that’s a good sign, economists say. It means that Americans are seeing more jobs being created, and that they’re optimistic about their prospects.

But the supply of new jobs — 162,000 in March, the biggest monthly increase in three years — will accommodate only a fraction of the unemployed. Some economists say the jobless rate will not recede to pre-recession levels near 5 percent for four more years.

Meanwhile, the buckle-your-seat-belts-it’s-going-to-be-a-bumpy-ride warning runs headlong into the Obama team’s persistent defense of the original stimulus bill, which was supposed to keep unemployment at 8 percent. Christina Romer proclaimed, “I think it has done exactly what we would say it would do.” Uh… not really. Needless to say, Republicans are pouncing on the insistence that everything is going exactly according to plan. “Romer’s comments are likely to raise the ire of Republicans in Congress. On Friday, the office of Senate Minority Leader Mitch McConnell (R-Ky.) released a memo showing that the stimulus has failed to keep unemployment under 8 percent as the administration said it would do.”

In sum, job growth is anemic, and the Obama administration cannot identify  a single effective policy it has advanced to promote job creation. Instead, it has run up a mound of debt and pursued policies that are likely to hamper rather than to facilitate job growth. The administration’s spinners can’t quite decide — brag about their expertly designed stimulus or lower expectations for any relief in the near term from sky-high unemployment? Frankly, the Obama team can spin all it likes; the voters can see for themselves that Obama administration and Democratic Congress have failed in their own stated goal to keep unemployment below 8 percent and promote robust private-sector job growth.

The Obama administration is lowering expectations and getting tangled up in its own spin. On one hand, the Obama economic team needs to prepare the public for a period of high unemployment:

The economy is growing again, but at a pace unlikely to quickly replace the 8.4 million jobs erased in the recession that began in late 2007. More than 11 million people are drawing unemployment insurance benefits.

“We’ve got a long way to go,” said Lawrence Summers, director of the National Economic Council. “We’ve inherited a terrible situation, the most pressing economic problems since the Great Depression in our country.” [In case you thought the Obama team was ever going to stop blaming George W. Bush, think again.]

Christina Romer, head of the White House Council of Economic Advisers, said consumers still face “a lot of head winds” from the financial crisis. For example, debt and credit difficulties are hampering stronger job growth.

They were echoing the words of Treasury Secretary Timothy Geithner, who said last week the administration was “very worried” about returning to a more normal jobless rate of around 5 percent.

Summers said Obama was preoccupied with creating jobs. “The trend has turned, but to get back to the surface, we’ve got a long way to go,” Summers said.

Preoccupied? Well, that can certainly be said of health-care reform, but what, precisely, has Obama been doing to promote job growth? Certainly raising billions and billions in new taxes in the guise of health-care “reform” and allowing the Bush tax cuts to expire aren’t helping job creation. Nor will cap-and-trade, if the Obama team has its way.

And the job picture is likely to get worse, not better, as more workers return to the job market, as this report explains:

Some economists assert that the unemployment rate, which held steady at 9.7 percent in March, is likely to be driven higher as many more such people are lured into looking for work by hopeful signs of recovery.

The number of people looking for jobs rose by more than 200,000 in March compared with February, according to the Economic Policy Institute — and that’s a good sign, economists say. It means that Americans are seeing more jobs being created, and that they’re optimistic about their prospects.

But the supply of new jobs — 162,000 in March, the biggest monthly increase in three years — will accommodate only a fraction of the unemployed. Some economists say the jobless rate will not recede to pre-recession levels near 5 percent for four more years.

Meanwhile, the buckle-your-seat-belts-it’s-going-to-be-a-bumpy-ride warning runs headlong into the Obama team’s persistent defense of the original stimulus bill, which was supposed to keep unemployment at 8 percent. Christina Romer proclaimed, “I think it has done exactly what we would say it would do.” Uh… not really. Needless to say, Republicans are pouncing on the insistence that everything is going exactly according to plan. “Romer’s comments are likely to raise the ire of Republicans in Congress. On Friday, the office of Senate Minority Leader Mitch McConnell (R-Ky.) released a memo showing that the stimulus has failed to keep unemployment under 8 percent as the administration said it would do.”

In sum, job growth is anemic, and the Obama administration cannot identify  a single effective policy it has advanced to promote job creation. Instead, it has run up a mound of debt and pursued policies that are likely to hamper rather than to facilitate job growth. The administration’s spinners can’t quite decide — brag about their expertly designed stimulus or lower expectations for any relief in the near term from sky-high unemployment? Frankly, the Obama team can spin all it likes; the voters can see for themselves that Obama administration and Democratic Congress have failed in their own stated goal to keep unemployment below 8 percent and promote robust private-sector job growth.

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Can the Obama Administration Afford Any More Missteps?

As problems continue to mount and the president’s approval ratings continue to sink — the latest Rasmussen poll has Obama’s approval rating down to 44 percent, a new low — there are a lot of different, and damaging, story lines developing around the Obama administration. You can add a lack of basic competence to the list.

To take just one example from yesterday: on NBC’s Meet the Press, White House economic adviser Christina Romer was asked if the recession was over. Her first answer was that according to the “official definition … I think we have, at least in terms of GDP, reached that point” — before she then added qualifiers, inviting a follow-up question. When Romer was then asked, “So in your mind, this recession is not over,” she answered, “Of course not. We have — you know, for, for the people on Main Street and throughout this country, they are still suffering. The unemployment rate is still 10 percent.”

Now compare that answer with what Lawrence Summers, director of the National Economic Council, said on ABC’s This Week: “Today, everybody agrees that the recession is over, and the question is what the pace of the expansion is going to be.” (Apparently “everybody” does not include Summers’s colleague Christina Romer.)

This is what is known as sending mixed messages; to have it done by two of the Obama administration’s leading economic spokespersons on a basic economic issue makes it all the more harmful.

The dazzling intellect and multitasking mastery of those who inhabit Obama’s World seem to be producing something less than was advertised. You can add to this the much more serious misplay by Harry Reid on his Medicare buy-in “compromise,” which has been soundly rejected by Senators Joe Lieberman and Ben Nelson, two key votes Majority Leader Reid needs if he hopes to pass health-care legislation. Reid’s effort to portray health care as “inevitable” — and his effort to pressure Lieberman into supporting legislation that the Connecticut senator clearly finds unacceptable — has not only failed; it has badly backfired. And as if determined to make a bad tactical mistake even worse, Reid’s aides are now trashing Lieberman as a person who broke his word. That is something that strikes me as not only untrue — I have worked with Senator Lieberman over the years and always found him to be a man of integrity — but bordering on insane. Why do they want to attack the character of a man whose vote they presumably still need?

Governing involves missteps; that is an inherent by-product of exercising power and needs to be factored in when judging an administration. Still, add these incidents to others and you have a picture emerging of an administration and a party that are not only overmatched by events but that also look downright pitiable at times. This is the kind of thing, especially so early in the life of an administration, that can easily become a proxy for a wider inability to govern. Come 2010, voters are likely to extract a cost for this.

As problems continue to mount and the president’s approval ratings continue to sink — the latest Rasmussen poll has Obama’s approval rating down to 44 percent, a new low — there are a lot of different, and damaging, story lines developing around the Obama administration. You can add a lack of basic competence to the list.

To take just one example from yesterday: on NBC’s Meet the Press, White House economic adviser Christina Romer was asked if the recession was over. Her first answer was that according to the “official definition … I think we have, at least in terms of GDP, reached that point” — before she then added qualifiers, inviting a follow-up question. When Romer was then asked, “So in your mind, this recession is not over,” she answered, “Of course not. We have — you know, for, for the people on Main Street and throughout this country, they are still suffering. The unemployment rate is still 10 percent.”

Now compare that answer with what Lawrence Summers, director of the National Economic Council, said on ABC’s This Week: “Today, everybody agrees that the recession is over, and the question is what the pace of the expansion is going to be.” (Apparently “everybody” does not include Summers’s colleague Christina Romer.)

This is what is known as sending mixed messages; to have it done by two of the Obama administration’s leading economic spokespersons on a basic economic issue makes it all the more harmful.

The dazzling intellect and multitasking mastery of those who inhabit Obama’s World seem to be producing something less than was advertised. You can add to this the much more serious misplay by Harry Reid on his Medicare buy-in “compromise,” which has been soundly rejected by Senators Joe Lieberman and Ben Nelson, two key votes Majority Leader Reid needs if he hopes to pass health-care legislation. Reid’s effort to portray health care as “inevitable” — and his effort to pressure Lieberman into supporting legislation that the Connecticut senator clearly finds unacceptable — has not only failed; it has badly backfired. And as if determined to make a bad tactical mistake even worse, Reid’s aides are now trashing Lieberman as a person who broke his word. That is something that strikes me as not only untrue — I have worked with Senator Lieberman over the years and always found him to be a man of integrity — but bordering on insane. Why do they want to attack the character of a man whose vote they presumably still need?

Governing involves missteps; that is an inherent by-product of exercising power and needs to be factored in when judging an administration. Still, add these incidents to others and you have a picture emerging of an administration and a party that are not only overmatched by events but that also look downright pitiable at times. This is the kind of thing, especially so early in the life of an administration, that can easily become a proxy for a wider inability to govern. Come 2010, voters are likely to extract a cost for this.

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