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Former McCain Adviser Says Boehner Wrong On Stimulus, Geithner, And Summers
Moody's Analytics chief economist Mark Zandi
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Former McCain economic adviser, and longtime stimulus defender, Mark Zandi took issue today with House Minority Leader John Boehner's criticisms of President Obama's economic policies, and with multiple GOP calls for Obama's top economic advisers to resign.
"I think we'd be in a measurably worse place if not for the stimulus," Zandi said at the Christian Science Monitor breakfast this morning. "If we had not had the stimulus...we'd have fewer jobs today than we actually have."
Zandi was responding to Boehner's contention yesterday that stimulus spending "has gotten us nowhere." Asked whether he agreed with Boehner, Zandi said "no."
"Without the stimulus spending," Zandi insisted, "instead of a 9.5 percent unemployment rate, we'd have an 11.5 percent unemployment rate."
Zandi also defended the performance of Treasury Secretary Timothy Geithner and Obama's Chief Economic Adviser Larry Summers, both of whom have been called upon by leading Republicans to resign.
"I think that, in totality, the policy response [from Geithner and Summers] has been excellent. That it was very aggressive and ultimately very successful, so I give them high marks. Any individual aspect of the policy response one could debate... broadly speaking I think it was very effective."
Zandi took particular issue with the size of the stimulus. He says it should have been larger, with more money dedicated to tax incentives to small businesses and less to infrastructure spending. More infrastructure spending, he said, "would have enormous productivity benefits," but is necessarily stimulative in the near-term.
"I would have made it larger," Zandi said. "I think we underestimated -- significantly underestimated -- the severity of the situation that we were in and still are in. And that that would have argued for a larger stimulus package."
Those failings, though, were a fault of the political process. According to Zandi, "The most important criteria for the stimulus passage in that time was getting it done fast, because the economy was going down fast.... They had to make compromises to get it through the Senate...and part of that compromise was adding to the infrastructure spending."
Zandi holds out little hope for more stimulative spending at this point, even though the economy is on the brink of a double-dip recession.
It's very difficult to envisage any significant policy response to current economic problems in the near term," he said.
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jsdc007
August 25, 2010 11:56 AM
Now watch old man McCain foam at the mouth against this man.
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Ugg the Repug
August 25, 2010 12:21 PM in reply to jsdc007
Yes, but won't call him "stupid cunt." That reserved for his wife. Har har har.
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alkfuiwueiu
August 25, 2010 9:51 PM in reply to Ugg the Repug
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voreason
August 25, 2010 1:04 PM in reply to jsdc007
McCain will simply ignore this, of course.
He is much more interested in sniping at the President than he is in actually defending any of his "positions". What I mean, of course, is that he has no positions any longer, if indeed he ever really did. He has turned into a rather bitter old man. Tragically, he only has himself to blame for his irrelevance.
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Ann Arbor
August 25, 2010 12:23 PM
These are pretty much the only possible answers from a reality-based economist. He must accept that he won't be working for any more Republicans in the foreseeable future.
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GenePoole
August 25, 2010 1:05 PM in reply to Ann Arbor
Nor will you see him being invited to McCain's other economic adviser's (Phil Gramm) Labor Day BBQ.
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darosenthal
August 25, 2010 12:28 PM
Isn't it interesting to watch people juggle their common sense and personal orthodoxies? How many times can Zandi halve the distance between himself and Keynes and still be neoliberal?
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NobleCommentDecider
August 25, 2010 12:43 PM
The Republicans are the party of anger and fear, they don't want economic recovery, they want endless war abroad and a jackbooted government at home that does not tolerate dissent.
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Dave
August 25, 2010 1:22 PM in reply to NobleCommentDecider
They read 1984 and said "how can we outdo this?"
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mona
August 25, 2010 1:49 PM in reply to NobleCommentDecider
Unfortunately I agree with the sentiment that Republicans of today only want to create fear and anger in their drive to regain power. The end seems to justify the means so if they have to lie, obstruct desperately needed jobs legislation and pander to the extremists that is what they will do. It's sad. In the end they will lose as the party shrinks to cult status but the country loses in the near term.
It is so very obvious but unfortunately I suppose it is possible that there enough voters out there who will fall for the manipulation.
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CityGuy
August 25, 2010 10:19 PM in reply to mona
The latest polls show deep dis-satisfaction with President Obama. However, the GOP is not benefiting from this angst as might be expected. I guess the bottom line for most Americans is: No matter how bad things are under Obama, the Repugs would just make things worse!
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tonigo
August 25, 2010 12:47 PM
Any economists who support and defend current Republican economic polices are like the few environmental scientists who deny global warming exists; they are either on the payroll of some vested interest, or they are from some obscure college in the middle of nowhere that the media dug up so they can say there's still controversy over the issue.
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mona
August 25, 2010 1:50 PM in reply to tonigo
Exactly
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August 25, 2010 12:57 PM
Good for him -- a Republican with the cojones to call out the lies and idiocy of the sunburned pig called Boehner. And we all learned in 2008 what McCain knows about economics as he sat at that ridiculous roundtable he called for and said barely a word -- after all, "the fundamentals of the economy are sound". I guess he was measuring the economy by his wife's check book.
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Early Out
August 25, 2010 1:06 PM
The link on the front page says that this adviser is saying that McCain is wrong, not Boehner. Should be corrected.
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mona
August 25, 2010 1:51 PM in reply to Early Out
The reason he says that is because he is speaking in response to Boehner's big speech in Cleveland in which he called for the resignation of the President's economic team.
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Rich in NJ
August 25, 2010 1:30 PM
That's why the Fed has to act, and act soon.
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mcrose68
August 25, 2010 1:35 PM
I'm confused about something in the article. He says,
He would have dedicated and less to infrastructure spending
and then says
More infrastructure spending "would have enormous productivity benefits,"
So, are "enormous productivity benefits" bad??? I must be misreading something here?
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August 25, 2010 2:22 PM in reply to mcrose68
I saw the same contradiction, but assumed it was a typo in reporting.
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gridian
August 25, 2010 2:29 PM in reply to mcrose68
I don't think this is a typo. Immediately after the quote, the article indicates that Zandi believes infrastructure spending delivers near-term gains, but not necessarily long-term gains. He believes that tax incentives for small businesses would provide better long-term benefits than infrastructure spending, despite the obvious near-term benefits infrastructure spending provides.
At least, that's how I read the article.
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tinsk
August 25, 2010 1:50 PM
I always have to laugh when I hear some tea bagger who probably makes $30,000 a year say how unfair it would be to not extend the Bush tax cuts to the top 2% income earners.
For 96% of American wage earners, the average additional amount of money in their paychecks due to the Bush tax cuts is roughly $600 - $900 per year.
However, the average additional amount of money the top 2% earners like Limbaugh, Hannity, Beck, O'Reilly, et al get back due to the Bush tax cuts is $275,000 - $375,000 a year.
I would be all for extending the Bush tax cuts to everybody as long as the top 2% - 3% income earners don't get back any more than the average of the other 97% wage earners. Now that is what I call fair.
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mona
August 25, 2010 1:55 PM in reply to tinsk
I agree. How they can call for the extension of the tax cuts for the very wealthy in this economic climate is stunningly selfish. Then to say they don't have to be paid for because they weren't paid for before is stunningly stupid. And all this while they are screaming at the President and the Democrats about the deficit. That alone should be enough to convince independents now to vote for them. The Republican supporters are a lost cause.
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August 25, 2010 2:24 PM in reply to mona
Yeah, like Bill Gates couldn't afford a little more to the government!
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jimson
August 25, 2010 1:54 PM
IF the GOP were to gain some kind of majority and/or the White House before the depression/recession/sh!tstorm is over, what exactly will they do? More tax cuts? And when things get worse, what unique excuses will they come up with to blame the Democrats?
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tinsk
August 25, 2010 2:19 PM in reply to jimson
Keep in mind, they are currently calling for the existing tax cuts, that did nothing to prevent the current situation, to be continued. Those cuts are doing nothing to help right now and won't in the future.
More cuts? Will only add to the debt because 40% of American already don't earn enough to pay taxes. 66% of all American corporations already don't pay taxes. The top income earners don't spend those extra tax cuts. Tax cuts that may end up going into the economy might end up being for only about 25% - 30% of American wage earners.... clearly not enough to spark the economy in any significant way. And that is IF they don't use the money to simply pay down their debt.
And as a small business owner, throwing tax cuts at me as an incentive to hire more people won't make me go out and hire new employees that I don't need. I hire to meet sales demand.
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mcrose68
August 26, 2010 1:00 PM in reply to tinsk
This is the stupifying thing to me.
Henery Ford knew he couldn't sell a car if no one could afford to buy a car.
Corporations and the wealthy are sitting on massive stockpiles of cash, but they won't spend it until they see consumers coming back. Somehow Republicans want to pretend that giving more cash to those that are ALREADY sitting on lots of cash is going to change the situation?? Are they stupid or evil.
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Rich in NJ
August 25, 2010 1:58 PM
That's why the Fed has to act, and act soon.
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sickofpalin
August 25, 2010 4:22 PM
PoliticalWire had a quote this morning about politicians running on their record.Don't waste your time and money.
Message to DEM's:
(1) Get Polosi out of camera view
(2) Stop talking HC reform and start talking about the GOP opposition to anything that doesn't benefit private industry
(3) Peel the paint off your opposition. That means actually calling them out
(4) The President has already done the job. It's up to the House and Senate DEM's to start speaking against the ideology of stupidity
Thanks for reading
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divrdan
August 25, 2010 5:14 PM
Is it just me or does this paragraph make absolutely no sense?
""Zandi took particular issue with the size of the stimulus. He says it should have been larger, with more money dedicated to tax incentives to small businesses and less to infrastructure spending. More infrastructure spending, he said, "would have enormous productivity benefits," but is necessarily stimulative in the near-term.""
Brian, is this really what you meant to write?
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crazycarnypoptart
August 25, 2010 6:10 PM
funny thing he is he is still acting like a republican in the form of rewriting history. If I remember correctly the package that passed the house actually was mostly infrastructure spending and aid to state and city budgets. It was the republicans filibustering in senate that forces them to change some of the infrastructure spending to tax cuts. Not vice versa as he would have you beleive.
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Peter Principle
August 25, 2010 6:33 PM
I know Zandi, and he's a genuinely good guy, and a smart economists. I didn't even know he was a Republican until he showed up advising the McCain campaign. Why he still wants to hang around with that pig-ignorant yahoos and demagogues who make up the modern GOP is beyond me.
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BrownEye
August 25, 2010 9:43 PM
Fox will have this as their top story for days.
"Stop Fox, the body dies."
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Leftflank
August 26, 2010 12:08 AM
No shit Sherlock, but since you were on the Mcain/Palin ticket, how much do you expect to be listened to? Also, that pretty much means the whole friggin' right-wing is wrong.
Now that's stimulating.
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Nancy Irving
August 27, 2010 3:50 AM
If Boehner was drowning and Obama swam out and rescued him, they would no sooner reach dry land than Boehner would start whining that Obama didn't get to him fast enough to prevent him getting water up his nose.
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