With the announcement that Austan Goolsbee will be returning to the Univ. of Chicago, and the bad economic numbers, there has been a great deal of criticism of the statement made by Christina Romer that the stimulus would keep unemployment below 8%. Of course, the stimulus plan was passed and current unemployment is 9.1% (at best). What's missing from the discussions I've seen is whether these economic advisors truly believed the 8% figure.
a) Anyone who has run numbers knows that you're going to be required to give a level of specificity to your analysis/projections which is simply not there. I seriously doubt that this pressure is absent from our democratic process.
b) I think it is undeniable that the economy is something of a confidence game and that comments made by the President's economic advisors have to be constructed with this in mind. It seems quite possible to me that a more intellectually accurate statement that the stimulus would make things better but that there was no telling how high unemployment would go, would be a political non-starter.
c) a) and b) could be off the mark and Romer et al really did believe in the 8% figure. That anyone of such high rank could have such confidence, given the unprecedented situation that we faced, is astonishing. If they really made such a claim with confidence and conviction then they really need to start over from scratch.
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