I always kind of liked Austan Goolsbee. He was one of the few reasons I had hope that this Administration wouldn’t completely screw the economic pooch. After he resigned, I saw him on The Daily Show and he was giddy as a schoolgirl at the prospect of leaving politics.
And now it looks like Austan is off-message:
Former Obama administration economic adviser Austan Goolsbee said Thursday that if given a second chance he would not have backed the Cash for Clunkers program or the home buyer tax credit passed in 2009 to stave off further economic distress.
“Because we didn’t know if [economic recovery was] going to be short or long,” the Obama administration tried measures to address both scenarios, Goolsbee explained on MSNBC’s “Morning Joe.”
“If you look at Cash for Clunkers or the first home buyer tax credit, they were geared to trying to shift [recovery] from 2010 into 2009. Given it’s taken this long [to recover], I don’t think you would do that short-run stuff,” Goolsbee added.
What he’s saying is that that the fiscal and economic crisis were far worse than anyone knew. The economy was shedding jobs and GDP at rates never seen. We really were headed for a Great Depression.
What exactly prevented that is debatable. Goolsbee thinks it was the stimulus. It might have been the Federal Reserve. Other think it was TARP. Zakaria argued that it was globalization — we were able to lean on the economies of India and China to prevent a complete collapse. Personally, I think it will be along time before we know why we ended up here instead of in Hoovervile. It was decades before anyone really understood the Great Depression. And Keynesians still don’t.
In any case, we’re finally getting to the point where even Team Obama have to admit that, given the severity of the crisis, all these ridiculous gimmicks like Cash for Clunkers didn’t work and could never have worked. Of course, conservatives knew this all along and were pilloried for it, just like we’re being pilloried right now for opposing Stimulus IV: Hire More Government Workers right.