Among her challenges was explaining why her prediction that the Obama-backed fiscal stimulus would keep the unemployment rate below 8% proved overly optimistic. The unemployment rate is now at 9.5%.Well, as least she hoped it would be better. But it's not her fault, you see? The "world deteriorated!" "I'm not to blame! It's not my fault!" (Is that Dr. Robert Stadler or James Taggart -- or both -- from Atlas Shrugged?)
"I certainly hoped it would be lower," she said. "The world deteriorated between November 2008 when I started" and the initial estimates were made "and when we took office January 21. Do I wake up every morning and wish it were 8% instead of 9.5%? You bet."
I wrote about Romer in November 2008 when she was first picked to lead the Council. I quoted the following passage from a Boston Globe article:
The lesson she drew from that crisis, according to colleagues and a review of her writings, is that strong government intervention is sometimes necessary medicine. That may mean she will urge Obama to act aggressively to keep capital flowing through the financial system and to enact an economic stimulus package that injects government spending into the economy at the risk of ballooning the deficit.See my post for Henry Hazlitt's take on how well that worked when FDR did it. Similar policies threw the country into deeper depression which only relaxed when FDR (and the Supreme Court) finally lifted the boot from the neck of American business.
And yet, after seeing the failure of her policies -- even though she wishes! for lower unemployment -- Romer did, in fact, learn something new:
Where we are today is certainly not good. But in the absence of the actions [of the government --ed.] the economy would have been even more terrible."See? She learned that as bad as things are, it would have been worse without her. What evidence does she have for that? To quote a favorite phrase of Ayn Rand's, "blank out."
One thing she says she hadn't realized previously: "The degree to which you often only get one shot at something like the Recovery Act."
Romer only got "one shot" and it was right on target. She hit America in the jugular and we've been hemorrhaging red ink ever since.