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Sunday, November 28, 2010

 
Structural Problem

by digby

If anyone's wondering why the administration hasn't been able to get on message about jobs and unemployment, it might be because they just don't know what the hell they are doing. This rather breathtaking post by Mark Thoma discusses the extremely disconcerting fact that the Obama administration can't communicate, not because they are bad communicators but because they can't decide what the problem is that they have to fix:

The administration needed to be out there pushing for employment policies, doing everything it could to signal to people that it was on their side, not the side of corporations and big banks. That requires that you figure out that you have a cyclical unemployment problem before the election is all but over, and that you begin pushing for solutions in public forums. That push needs to start at the very top with Obama, and it needs to be reinforced every single day by other administration officials. One mention by Obama in a Saturday address to the nation doesn't get the job done.

I understand that Congress may not have supported additional policy to try to stimulate employment, but the fight would have been worth it no matter the outcome, and with the administration actually leading rather than accepting defeat before the game has been played, the outcome may not have been as preordained as the administration seems to believe:

Obama could learn from Bush, by Richard Wolffe, Commentary, LA Times: The day before his party's shellacking in this month's elections, President Obama sat down with his economic team to examine the single most important issue for voters across the country: jobs.
But the question on the agenda was not how to accelerate the recovery or target job creation... The president had called the meeting to grapple with what he and his propeller-head economists have been debating for some time: the wonkish question of whether today's high unemployment rate is structural or cyclical. ...
Two years into this presidency, and many months into a sluggish recovery, may be a little late to try to agree on the root cause of today's high unemployment.
This lack of agreement on economic fundamentals is a primary factor behind one of this White House's most obvious failures: communications. As one senior Obama advisor told me the day after the disastrous midterms: "It was hard to find a single economic message when the economic team couldn't agree on a single economic policy." ...
However, a new economic team will not resolve the communications problems... In fact, the president has been frustrated by his communications strategy for most of the last year. ... Obama told me six months ago that poor communications had hampered his ability to execute his policies, and that was after several months of internal reviews.
Oy vey. Brad DeLong says that while they may have disagreed, there was nobody in the administration who didn't at least think anything was better than nothing (except for Peter Orszag, whose deficit fetish rules his world) and suspects that the meeting has been mischaracterized. Perhaps that's true, but then it still leaves unresolved the question of why the administration can't seem to get its act together on jobs.

Krugman says:
What I want to know is, who was arguing for structural? I find it hard to think of anyone I know in the administration’s economic team who would make that case, who would deny that the bulk of the rise in unemployment since 2007 is cyclical. And as I and others have been trying to point out, none of the signatures of structural unemployment are visible: there are no large groups of workers with rising wages, there are no large parts of the labor force at full employment, there are no full-employment states aside from Nebraska and the Dakotas, inflation is falling, not rising.

More generally, I can’t think of any Democratic-leaning economists who think the problem is largely structural.

Yet someone who has Obama’s ear must think otherwise.

No wonder we’re in such trouble. Obama must gravitate instinctively to people who give him bad economic advice, and who almost surely don’t share the values he was elected to promote. That’s what I’d call a structural problem.

No kidding.

I have to laugh at this bit in the Richard Wolfe piece though which, coming from Obama's designated scribe is just amazingly unreflective. He claims that Bush won reelection six years ago because of his disciplined message and "undisciplined" opponent and proclaims:

The lesson of 2004 is that the president cannot be an empty vessel for hope, no matter how big or small his own hopeful base. And if he doesn't fill the vessel with his own story of how and why he delivered on hope, then his opponents will fill it for him. ...

You don't say?

Why this is supposed to be the lesson of 2004 I don't know. I think the lesson is of a little bit more recent vintage than that.

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