For Immediate Release
Sam Husseini, (202) 347-0020; or David Zupan, (541) 484-9167
Colbert or Goolsbee: Who’s the Clown?
WASHINGTON - Nearly two years ago, Chairman of President Obama’s Council of Economic Advisers Austan Goolsbee, told Comedy Central host Stephen Colbert, “A year from now we’re going to be in a very happy place.” (June 15, 2009, 1:40 mark of the video.)
TIMOTHY CANOVA, canova at chapman.edu
Canova is a professor of international economic law at the Chapman University School of Law in Orange, California. He is the author of numerous articles and book chapters forewarning of financial crisis and examining government intervention in the economy, including “The Federal Reserve We Need” and “Legacy of the Clinton Bubble.”
Today, Canova said: “According to Goolsbee, ‘the main driver of recovery at this point has got to be the private sector.’ Goolsbee recently told the Financial Times that only during ‘a rescue phase’ should the government be the primary driver of the economy. Likewise, for the past year President Obama has repeatedly said that the private sector must be the engine of job creation, a perspective shared by such Tea Party leaders and libertarians as newly-elected U.S. Senator Rand Paul and eerily reminiscent of the approach of the Hoover administration. Unfortunately, private sector job growth continues to stall and underperform. The U.S. added just 54,000 jobs last month, well below the 150,000 to 200,000 new jobs that are needed each month just to keep up with the increase in the working age population. The official U.S. unemployment rate is now 9.1 percent. According to the U.S. Bureau of Labor Statistics, nearly one in five American workers are either unemployed, underemployed, or discouraged workers who have given up looking for work.
“Goolsbee suggested that it is proper for the government to take the lead in rescuing Wall Street banks, but when it comes to creating jobs for American workers, all the government can do is provide tax incentives for businesses to hire. Yet, with fourteen million Americans officially unemployed, another ten million or more either underemployed or too discouraged to look for work and many millions of consumers under water on their mortgages, all the tax incentives in the world will not be enough to get U.S. businesses to invest. In fact, the largest U.S. corporations are sitting on more than $2 trillion in earnings. Given the dismal conditions in labor and housing markets, it makes little sense to rely on the private sector to lead recovery.
“We’re now heading into forest fire season and there’s no Civilian Conservation Corp to put young people to work clearing underbrush in national and state parks and forests. According to Robert Shiller, professor of economics and finance at Yale University, the federal government could employ a million Americans in a new CCC for only $30 billion a year, a drop in the bucket compared with the trillions of dollars the Federal Reserve and Treasury have already showered on Wall Street institutions and financial markets. President Obama has talked about investing in infrastructure, but he has proposed no new public works or jobs programs. Ronald Reagan’s father, like millions of Americans, survived the Great Depression working for the Works Project Administration which built schools, hospitals, highways, and bridges throughout the 1930s. During the Carter administration, hundreds of thousands of Americans were employed in major jobs training programs. But ever since the Reagan era, Democratic and Republican administrations alike have turned away from public jobs and training programs.
“Some will argue that House Republicans will never go for any federal jobs programs. That’s a weak excuse for Democrats to remain silent. At a time when mass joblessness remains a most serious obstacle to economic recovery and when private businesses are reluctant to invest, the federal government must take the lead in putting Americans back to work.”
Last month, Goolsbee was on Colbert’s show again and refused to contradict Colbert’s repeated assertion that the government has never created a
single job (0:50 mark of the video).
Canova has appeared on several panels recently: http://www.c-spanvideo.org/program/Reservefo and http://www.rooseveltinstitute.org/future-federal-reserve.
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