Monday, June 27, 2011

The Decline of Economic Power at 1600 Pennsylvania Avenue

The Financial Times on the departure of the economic "Dream Team":
Today, the need for good economic advice – and talent for selling a policy’s merits – is greater than ever. But the all-star team has disbanded.

This week, Mr Obama leads budget talks with Congress over raising the statutory debt ceiling. To break the impasse, the White House should plan for cautiously phased spending cuts and tax increases and strive to get the public behind it. Lack of commanding economic policy promoters will make that task harder. Between now and the elections of November 2012, firmer leadership will be demanded of Mr Obama. It is a shame he did not provide it when he had the best help he could get.
The loss of Summers is a blow that will be hard for Obama to recover from.  The departure of Goolsbee and Romer also stings.  At a time when the nation needs a firm, experienced and disciplined hand at the economic helm, Mr. Obama is left with little in the way of economic star power to drive a functional agenda forward.  Instead he will kowtow to the GOP Tea Party and give in to recovery-killing tax cuts and job destroying austerity programs.  The rich will get richer, the middle class will stagnate and the poor will die.  But that's all part of the plan.

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