White House CoS, Bill Daley, Has No Clue What’s Keeping US Out of a Depression
Appearing on Meet the Press, White House Chief of Staff, William Daley made one of the most clueless statements about the American economy we’re likely to hear outside the Tea-GOP.
Explaining why the President was putting so much effort into trying to reach a grand bargain with John Boehner that would include trillions in spending cuts on worthwhile government programs, Mr. Daley essentially said that Obama was doing this not merely because we need to raise the debt limit, but because, “this deficit is a serious drag on the economy.”
Think about that: “The deficit is a serious drag on the economy.”
Apparently, the man closest to the President of the United States, and on whom the President relies for political and economy advice, does not know that the only reason the terrible unemployment numbers that may end his President’s re-election hopes are at 9.2 percent and not 11 or 12 percent or higher is because of the increased federal deficit spending of the last two years.
And the only thing that can keep unemployment from reaching higher levels in 2012 is continued federal spending, which they will cover via more deficits. If Mr. Daley’s diagnosis were translated into policy — and that seems to be what’s happening — he and his President will need new jobs in 2013.
Now I wouldn’t expect a political appointee to know much about some accounting identity that explains why federal primary deficits are inescapable when the private sector just lost trillions in housing wealth and we have a trade deficit. So never mind that chasm.
But how is it possible Mr. Daley cannot recall that the principal reasons Mr. Obama proposed and signed the deficit spending stimulus bill in 2009 were to avert a depression and keep unemployment from rising and, they hoped, to reduce it below the higher levels predicted at the time. That their predictions were too optimistic and thus the stimulus too small has become fodder for Tea-GOP demagoguery, but that’s another story.
On the debt reduction negotiations, David Gregory asked Mr. Daley what he must have thought was a gotcha now question. He showed Mr. Daley a graphic showing the increase in the total debt since Obama took office, with the debt going from $10 trillion to $14 trillion or so, and projected to rise another $2 trillion.
Then Gregory smuggly concluded, “can’t you [Mr. Daley] see the logic of those who argue that given this huge increase in the debt, it makes sense that we reduce that only with spending cuts and not tax increases?”
The correct response to a question that jaw-droppingly stupid would have been to award Gregory the Douglas Feith Award and terminate his contract with NBC. Daley may not get the allusion and couldn’t say that in any event.
But in responding, Daley couldn’t even remember to remind viewers that the bulk of that debt increase was entirely the result of the recession: fallen tax revenues and increased safety-net spending, plus the stimulus, all responding to the recession Mr. Obama inherited. Instead, he left us with the lecture on how the debt or deficit was a serious drag on the economy, so our President was really focused on that.
There isn’t a single adult left in this conversation.