Obama Believes High Productivity Growth Story

I’ve been saying all along that Obama’s economic  policy was heavily influenced by the apparent high productivity growth figures  (see my lengthy post from March 2011 here ). However, I didn’t realize that the problem stemmed directly from the President.  According to Ron Suskind’s new book  (taking the excerpt from Brad DeLong’s blog),  Obama’s advisers were distressed that the President appeared to believe that high productivity growth was the main cause of high unemployment.

If Obama felt that 10 percent unemployment was the product of sound, productivity-driven decisions by American business, then short-term government measures to spur hiring were not only futile but unwise .

This explains an awful lot about the Administration’s unwillingness to tackle the job problem.  What makes this a tragedy is that much of the measured productivity ‘gains’ are actually driven by shifts to lower-cost suppliers overseas (see here).

 

Comments

  1. Hmm, if that quote is indeed true, Obama just became a lot smarter in my eyes. He really is stuck in a tough situation. The Democratic party is captured by economic dimwits who want to seize this moment to expand govt and grab more power. However, Obama may know that what we’re going through is a growth gap, like in all recessions, where productivity is accelerating faster than our ability to create new jobs for those recently laid off. If you just wait it out, some tech pioneer will figure out the problems and deliver, but you only make things worse if you take money away from Jeff Bezos, that he could be investing in the next tech startup, to dump in temporary boondoggles like Solyndra. Unfortunately, that’s what his leftie base wants so he obliges to a large degree, witness the large deficits and the trillions in stimulus he did pass, but I’ll give him credit for not going all out on such idiocy like the morons who advise him want.

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