John Ransom

In the clearest sign that the administration's economic policies have failed, the White House announced Monday night that Austan Goolsbee, Obama's economic recovery guru, is leaving the administration for a teaching job the University of Chicago says the LATimes.

"Goolsbee, one of the White House's primary spokesmen on the economy, will return to his position as an economics professor at the University of Chicago's Booth School of Business, the White House said in an announcement Monday night," writes the Times.

"In a prepared statement, Obama said: 'Since I first ran for the U.S. Senate, Austan has been a close friend and one of my most trusted advisors. Over the past several years, he has helped steer our country out of the worst economic crisis since the Great Depression, and although there is still much work ahead, his insights and counsel have helped lead us toward an economy that is growing and creating millions of jobs.'''

If that were true Goolsbee would stay on the job.

"Mr. Goolsbee has focused on developing the economic arguments for government assistance and public-private partnerships for promoting innovation, research and development, education and infrastructure," reports the New York Times "an area he once taught about, and will do so again — even as the federal government is reducing spending elsewhere to try to rein in the growth of the national debt."

When Bill Daley took over as White House chief of staff he brought with him a penchant for results-oriented government. With the economy on the skids, Goolsbee's out.

The Times reports that tonight House Speaker John Boehner wasted no time in ripping Goolsbee and Obama through a spokesman for the poor performance of economy .

"'With anemic job growth, plunging economic confidence and no real plan to rein in the debt, this departure is just the latest sign that the president has no answers for Americans concerned about the economy,' Brendan Buck, a spokesman for House Speaker John A. Boehner (R-Ohio), said Monday night." 

Ouch.

The Times points out that turnover amongst Obama's econ team has been high: "Obama has lost [Christina] Romer, National Economic Council Director Lawrence Summers, budget chief Peter Orszag, and Jared Bernstein, who was Vice President Joe Biden's top economic advisor." 

But don't expect Obama's fundemental approach on the economy to change.  

The New York Times says that Obama will likely tap an academic economist this summer to replace Goolsbee. 

That about sums up the definition of economic insanity.  

CNN’s Charles Riley, meanwhile, is floating the idea that a do-nothing Congress that took power last January, not President Obama, is responsible for the slowing economy.

It’s likely that Riley is floating the idea in order to determine how much wiggle room Obama has in blaming Congress for the poor state of economy.

Instead of reporting the news, media seems determined to act as communications consultants to the president.   

“Economic indicators are pointing to slower growth, writes Riley. “More Americans are looking for jobs, and the housing market is in a confirmed double dip. In another time and place, lawmakers might have responded with economic stimulus measures to get the country back on track. This time around, it's not in the cards.”

It’s not in cards because the administration pursued economic policies that would not work. Obama bet the farm on wild economics ideas that have been discredited by experience in the last one hundred years.

The auto industry has been nationalized as have banks, healthcare, student loans and mortgages. The Fed is keeping interest rates banks pay artificially low, even though banks aren’t loaning money. Americans are getting used to higher prices and a lower living standard.

This is what fairness look like. It stinks equally for all of us.     

Eugene Steuerle, a liberal economist, points out in Riley’s piece that because we have run such large deficits we can no longer afford spending even on things we need: "We've boxed ourselves in with these long-run deficits to the point that it's weakened our ability to manage a short-term crisis," says Steuerle told Riley.

But by slanting the article, Riley implies that’s it’s the GOP’s fault. But Obama owns this economy. It’s his creation.  

It’s not like the GOP didn’t tell Obama that we’d end up in the exact place we are now with no jobs, slowing growth and high inflation. His policies were more geared to spending money on presidential friends while punishing enemies. Some get more fairness than others.

And the country has received no return for the money liberal Democrats spent on these special interests.

Riley suggests that the Fed should try to pump more money into the economy by buying back U.S. Treasuries, known as quantitative easing. The second round of easing- known popularly as QE2- is slated to end this month.  While the policy has artificially inflated the prices of things like oil, food and common stock, it’s produced no long-last results for the economy

If the types of comments on CNN’s site for the story are any indication, readers aren’t amused by indications that anyone would suggest extra stimulus measures:

“No it is not in the cards,” writes one reader, “over the past 3 years Congress and the President have doubled the national debt, running up an additional $7.5 trillion dollars in pork-barrel deficit spending.”

“Obama/Biden/Reid should resign,” writes another, “would be the best stimulus. Nightmare over.”

“I think Charles Riley needs to explain how stimulus or money printing produces wealth?” says another reader. “Because it doesn't. I'm not sure how Republican[s] complicate matters, unless you believe that money printing and more debt will fix the problem.”

CNN isn’t the only media outlet that is banging the more-stimulus-now drum.

The Atlantic Monthly coincidently put out a piece today Why Washington Won't Fix the Economy. It reads like a DNC press release.

Atlantic associate editor Derek Thompson says “Washington has done a lot, but it hasn't been enough. TARP stabilized the banks, but financial stability didn't trickle down. The $800 billion stimulus repaired state budgets, but only for a few years. The Federal Reserve's two quantitative easy plans have made borrowing a cinch, but credit is still tight for small businesses. The December tax deal fattened our wallets, but higher gas prices made them thin again.”

What-ever, dude. Washington has done way too much, not too little.

The problem is that each of the remedies Thompson described above concentrated money in areas at the top of the financial food chain. There’s plenty of money out there. But it’s chasing up prices rather than creating jobs.

That’s happening because there is less risk in buying things than there is in creating jobs.

And as long as this model persists, prices will remain high along with real unemployment.

Does that seem fair to you? Or just plain foul?


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John Ransom

John Ransom is the Finance Editor for Townhall Finance.