Christina Romer: Obama Is No Roosevelt

Economist Christina Romer defends the stimulus she helped devise and delivers a few laughs in the process. Among the lessons learned from the stimulus experience she notes the importance of salesmanship and public confidence (aka Krugman's "confidence fairy"):

Finally, there’s little question that policy makers — myself included — should have worked harder to earn the public’s support for the act. One frustrating anomaly is that many of its individual components routinely received favorable reactions in polls, while the overall act was viewed negatively.

That is more than a simple public relations problem. Recovery measures work better when they raise confidence — as Franklin D. Roosevelt understood. His fireside chats, and his inaugural address proclaiming he would fight the Great Depression with the same resolve he would muster against a foreign foe, were aimed at reassuring Americans. Recent research suggests that New Deal programs may actually have had their primary impacton the economy by influencing consumer and business expectations of future growth and inflation.

Partly because of fierce political opposition, and partly because of ineffective communication and imperfect design, the Recovery Act generated little such rebound in confidence. As a result, it didn’t have that extra, Rooseveltian kick.

Fierce political opposition? Surely she remembers that Roosevelt's New Deal aroused bitter opposition, and yet here we are.

Ms. Romer also lauds a couple of academic efforts to track the results of the stimulus:

TWO careful studies have looked at the relationship between this formulaic spending and employment. Both find that states that received more money fared substantially better. This is the strongest direct evidence that the Recovery Act contributed to employment growth. Based on the estimated size of the effect, the studies suggest that the act created more than three million jobs.

Well, well. Ms. Romer provides links to Chodorow-Reich, Feiveson et al [1] and Daniel J. Wilson of the FRB San Francisco [2]. Both papers were noted in Ezra Klein's stimulus push a year ago and in our humble pushback. Mr. Klein had failed to note that the June 2011 draft of the Wilson paper rebutted the Chodorow et al result. The revised October 2011 version is less visibly contradictory.

Comments

[PD]

She seems to be saying that the pig needed better lipstick.

[Frau Hefte-Frauen]

"Rooseveltian kick"

Has Christina forgotten the Obama administration kick she received?

[Rick Ballard]

Perhaps raping GM and Chrysler bondholders in the Rose Garden attenuated the public confidence building to some small extent? Surely it couldn't be a problem with the pseudo-Keynesian modeling employed. After all, the models are functioning today as well as they were when Romer first ran them.

[narciso]

'It's the beatings will continue, until morale improves' strategy, Rick, of course,
Moran's assumption is the Vizziniesque premise, that economic growth was the point of the stimulus.

[hit and run]

as Franklin D. Roosevelt understood. His fireside chats

Joe Biden watched them on television.

[GMax]

Here how I read that. "{I the great and powerful Romer designed a great new dog chow. It beat the hell out of me why the dogs wont eat it!"

[maryrose]

clarice;
What a wonderful "Pieces" today. As a person who has been independent my whole life I really resent this Obama administrations depiction of women as needy and helpless. It is degrading and condescending. Self-made women are not amused. Ladyparts {an odious slogan} and the false contraception scam are really the bottom of the barrel. Smart women should take note and administer the correct punishment on election day.

[maryrose]

should have an apostrophe after administration . I do not want a recurrence of the Strunk and White "Elements of Style" debate.I was first introduced to this topic freshman year of college back in 1968.

[narciso]

So, as I notice from Figure 2, in Chodorow, it seems the states who received less stimulus funds seems better, and vice versa,

[Clarice]

Thanks, maryrose.

[MD]

Hello Gary,

How have you been?

[Jim Eagle]

Who the hell is Gary?

Skin's on the move. OL can't seem to handle the Gmen DL. RG3 has been their punching bag all day. He did convert a 4th and 3. Now another 4th and 1 and they are going for it. RG3 makes it on his own. This guy is special and dangerous. He will be the first of his class to make a super bowl. Skins fumble Gmen recovery. Geeeeez!

[Abadman]

"One frustrating anomaly is that many of its individual components routinely received favorable reactions in polls, while the overall act was viewed negatively."

Do you want a pony? = Individual component

You will have to get up every morning to feed it and muck out the stall. = Overall act

How much effort do they have to expend to be this stupid?

[Jim Eagle]

Thanks, Eli. Recover the fumble then immediately give it back with an INT. Skins ball with a little more than 6 in the game down by 7. Tried to run option and failed. Another 4th down but they are trying a FG. 4 pt. game.

[Adjoran]

No economist worth the title would make the outrageous claim that FDR's "New Deal" programs "worked" in any economic sense.

Several recent studies have indicated that the New Deal actually prolonged the Depression by seven years! Hitch your wagon to a star, Romer!

The real mystery is how this idiot was ever portrayed as a "conservative economist" in the first place. She certainly holds no conservative views at all.

[NK]

Lack of public support due to lack of PR? Perhaps. Or perhaps the Dems didn't dare explain what was in the STIMULUS! Bc if they did voters wouldvhave revolted andobamacar would have never passed. It s hard to do PR when you're corruptly paying off public unions.

[Lizards, lizards, everywhere, and forked tongues are fraught.]

Code Clown. Stalker MD on Alien Battle Cruiser.
==============

[War WAS an answer to the Depression.]

Sure, Adjoran, but Romer has hitched herself to two stars, one real and the other illusory: Roosevelt's real PR ability, and his mythical acts of recovery.
==========

[Jim Rhoads a/k/a vjnjagvet]

RG3 ain't done yet. TD to Moss. Now Manning has about a minute and a half to get a field goal to tie.

[narciso]

The problem really lies in what is relayed at the end of this piece,

http://www.powerlineblog.com/archives/2012/10/george-mcgovern-rip.php

And one can substitute 'credentialed moron'
for intellectual, there is no longer a tie to the 'brick and mortar' crowd that would support a real public works program, this is why Keystone was killed, despite strong
public support, same for coal miners, being
led to the 'Mason designed abattoirs' by
Trumka,

[Jim Rhoads a/k/a vjnjagvet]

Manning hits Cruz for 6. Back to RG3.

[jimmyk]

I've only given the Wilson paper a quick read, but it seems to measure the impact of spending directed to one state, paid for by taxpayers in all states. If that's the case, it's going to be a vast overestimate of the impact of sending money to all 57 50 states.

Suppose sending $1M to Ohio creates 8 jobs there, but costs 6 jobs in the rest of the country. Then you do that in all 50 states and you only get 100 jobs, not 400. And the cost is $500K per job, not $125K.

[Jim Eagle]

jimmyk,

No fair. You're using math. Math is anathema to the One and his regime. They deal in negatives but make it up in volume. One thing to their benefit is that the "The Stimulus" didn't need an apostrophe:)

[Rick Ballard]

"And the cost is $500K per job, not $125K."

Hmmm... interest doesn't accrue? I see every little serflet born during the reign of Obama Ø being issued a nice shiny little collar embossed with "Due by" and a number somewhat larger than $500K.

[PD]

Looks like Trump's gonna be on Letterman this week. Is that where he's gonna reveal his big news about Obama?

[Barry Dauphin]

One frustrating anomaly is that many of its individual components routinely received favorable reactions in polls, while the overall act was viewed negatively.

Note to Self: Do not attend an all-you-can-eat buffet with Ms. Romer.

[jimmyk]

LOL, Barry D.

[sbwaters]

Do I read this right that with Roosevelt's PR skill a bad economic idea need not cause the incumbent to lose re-election?

[Jim Eagle]

According to Tammy Bruce, Obama will be the first incumbent to wear a hat during the last debate tomorrow.

Photo

[Rick Ballard]

SBW,

Roosevelt had the Saturday night newsreels with dams and bridges and skyscrapers (plus CCC crews working in National Parks). All Obama has is lousy pollsters who can't even keep the SkyDragons breath lit.

It's just not fair.

[Dave (in MA)]

Quadruple Obowma montage @Drudge.

[Cecil Turner]

How hard is this? Per the Administration's own briefing slides, the goal of the stimulus was to keep unemployment under 8% . . . not boost it above 8% and keep it there until enough people bailed out of the labor pool to artificially lower it.

Either they're clueless (and anything that happened was blind chance), or the stimulus was a miserable failure. Take your pick.

(Though I suppose it could be both.)

[Jane - Mock the Media!]

I definitely go for both.

[jimmyk]

Romney should certainly congratulate O for getting the all-important Chavez/Castro/Putin triple crown of endorsements.

[Jim Eagle]

Two terrific games on right now. The Jags and Raiders are in real donnybrook with the Raiders trying to tie it up and the Jets are giving the Pats all they want recovering a fumble with 2 to go and the game tied up. BFDs.

[narciso]

Well remember that thread keying off a Kevin Drum review of that Susskind book,
where the assembled staff, realize he has
the wrong diagnosis of the crisis, and hence the wrong answer.

[jorod]

FDR was a populist like our populist President and continued with Hoover's policies. FDR had no plan, ad libbed it. He had a nice voice, used the taxpayers money to buy votes. Demonized business. Knew nothing of economics. Had a charmed, sheltered life except for polio. Gave away Eastern Europe to the Soviets. Sad.

[peter]

You're no FDR would be a compliment in my book, except that Obama has much more power than FDR had, thanks to the many inroads on the Constitution that have occurred since 1933.

[Patriot4Freedom]

People who disagreed with Keynes's acolytes in the Obama administration said in early 2009 that the "stimulus" wouldn't work. But the political advisers, especially the pinhead troika (AxelPoopCutter) worked their magic and sold that bill of goods to the public in the guise of their "investments" in shovel-ready projects.

They refuse to acknowledge the words of FDR's Treasury Secretary, Henry Morgenthau, Jr., in his famous speech on November 10, 1937, to the Academy of Political Science. He noted that the Depression had required deficit spending, but that the government needed to cut spending to revive the economy. He questioned the value of the deficit spending that had not reduced unemployment and only added debt:

"We have tried spending money. We are spending more than we have ever spent before and it does not work. ... I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises. ... I say after eight years of this Administration we have just as much unemployment as when we started. ... And an enormous debt to boot." (emphasis added)

LUN to a nice article from 2009 by Heritage.

[Gus]

FDR sucked. Frankie Roosevelt, was a simpleton and an idiot. WWII, saved Roosevelt from being Carter/Obama/Lite.

[Gus]

Patriot 4 Freedom.

Obama is an imbecile. Doesn't matter what his "INTENT" is. Obama is a clusterfugg.

[Steve]

FROM THE FOLKS WHO BROUGHT YOU "OIHO" now comes "FOWARD"

http://commoncts.blogspot.com/2012/10/from-folks-who-brought-you-oiho-comes.html