Welcome

May 16th, 2011 at 9:00 am

I recently left a great job at the White House, serving President Obama and Vice President Biden and working with an inspiring team of smart, dedicated economists.

Our office played an integral role in implementing the Recovery Act—I was the Vice President’s chief economist, I worked with a brilliant staff, and “Sheriff Joe” was the implementer-in-chief.  For a Keynesian economist, this was an exciting and challenging assignment, and under the guidance of the VP, that intervention broke the back of the great recession and significantly pulled forward the recovery that’s now underway.

I got to weigh in on the most important economic policies of the day, often with the President himself, whose economic vision I still very much believe in and support.   I had a really cool office, a decent parking space, and I even met George Clooney once in the White House (not to mention Bo!).

How could you leave a job like that?

It’s not, as some accounts suggested, because ideas that I was associated with, like more stimulus, are off the table.  I’m not happy about that and, in fact, I believe that if we were to make policy based purely on the economics, more stimulus would be at the top of the list.  Excess capacity in the private sector, most importantly in the job market, is still the biggest problem we face, and given the cost of capital right now, the best way to both reduce unemployment and the short-run deficit is to grow faster.

So if it were up to me, I’d step a bit more on the fiscal accelerator.  But that’s not why I left.

I left because I was frustrated.  Not with what was going on inside the White House, but with what is going on outside.

The national debate over economic policy is way off track and the stakes are as high as can be.   In every important area of economic and social policy—health care, fiscal policy (deficits, debt, taxes), public investment, retirement security, climate change, education, job growth, income distribution—there’s so much misinformation, so many false assertions, that it is impossible for anyone paying attention to evaluate the choices with which they’re faced.

Most important, as the 2012 election season gears up, we are poised to have a fundamental debate about the size and role of the federal government.   But absent straight talk and plain, understandable facts from both sides of the argument—about the costs and benefits engendered by this choice—it will be impossible for voters to make an informed choice.

Let me be clear about where I stand.  I view the conservative agenda right now as trying to implement a large shift in who bears the risk of those events in our personal and economic lives that are inadequately handled by private markets.  In my view, to get this wrong means significant disinvestment in public goods from education to infrastructure, diminished health and retirement security, more booms and busts—a move from “we’re in this together” to “you’re on your own.”

But let me also be clear about this: there’s a legitimate argument to be had about this choice and I don’t assume that if the quality of our economic debate were suddenly vastly improved, my view of what’s good economic policy would prevail.  A majority of the American electorate might well decide, once they had the facts, that they wanted a quite different sort of government, one that was much smaller, did less, and cost less as well.

But that’s not the argument we’re having.   Conservatives essentially argue we can have it all for less: get government “out-of-the-way” and health care, job growth, investment, upward mobility, would be enhanced, not diminished.   These claims are difficult to defend using facts—as opposed to assertion—and part of this blog will be devoted to sorting through them.

Democrats lately seemed to be trapped in a position that amounts to: “sure, we have to cut and shrink—just not as much as the other guys want.”

There’s got to be a better way—a way to widen this terribly narrow debate.

Why couldn’t I do more to help from the inside?  One reason is that in order to move the ball forward, you need consensus, and in today’s politics, that is particularly elusive.  And that makes it especially hard to call out people and their arguments.  There’s a reason why Jon Stewart can speak truths that highly-placed elected officials cannot.  When you’re on the inside at a time like this, you’re constantly balancing the risk of losing the support of people you need to lead.

So, not meaning to be at all grandiose, I’m going to try to do my part to improve the debate from the outside, to make sense out of the arguments, to go for truth over truthiness, to elevate the facts of the case in a way that’s respectful to all sides of the case.  It’s also my hope that by dint of my recent experience at the White House, I can imbue this blog with a sense of political realism that’s sometimes missing in critical commentary.

And while I have only one voice, I’m joining a choir that already makes some very powerful music (Paul Krugman’s voice is particularly notable, and his list of other choir members looks a lot like my own).

We are still a great nation with a tremendously flexible economy.  Yes, it’s an economy that has a long way to go to get where it needs to be—from the middle class on down, conditions are still extremely tough.  But I intimately know how deeply screwed-up things were a few short years ago, and I’m frankly surprised by how well we’re doing relative to where we were.

Our workforce is highly productive, our capital markets among the most developed and fluid in the world, our technological prowess and entrepreneurial spirit as strong as ever.  But if we don’t start getting a lot smarter about the choices we face, these great institutions will erode.  Of this I am certain.

So enjoy the blog.  I was going to say: “let me know what works and what doesn’t”—but I have a feeling I don’t need to tell you that…

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36 comments in reply to "Welcome"

  1. Crystal Simpkins says:

    Great post. I look forward to following your blog. Congratulations on your new endeavor.


  2. Merrill Goozner says:

    Congrats Jared on your new address. Your wise counsel on budget and tax issues, and on Social Security and Medicare reform will be much needed in the months ahead. A definite addition to my blog roll.


  3. Andy Hailey says:

    The America I grew up in was about “we.”

    Today American’s are mostly about “me.”

    Most Americans would rather shop than pay taxes to replenish what they have taken from the nation’s common wealth, or to pay our national bills. Let others like China or Japan pay our bills.

    America has an “empathy deficit” that is far greater than our national deficit and there needs to be more discussion of our empathy deficit and our responsibility as citizens to replenish the nation’s common wealth in proportion to what we take from it.

    Income taxes are the dues we all owe this great nation. Income taxes are required to keep America a great nation – a nation about we, the citizens, not about greedy corporations and individuals only concerned about me.

    Thank you for starting this blog.


    • johnnyblaze360 says:

      I have heard that there are people out there (so called Americans) like this that exist but have never truly believed it. Call it wishful thinking. This is one of the most shocking things I’ve come across in quite sometime. I can only guess that you are either broke, a government worker, living in a basement, or a combination of the three. How sad.


      • IAdmitIAmCrazy says:

        I am impressed by your guess. I particularly like your “so called Americans.”

        As so often, leaping from a few uttered opinions to personal characteristics, reveals more about the guesser than the “guessee”. (But sure, I am broke and I am a government employee.) The funny thing is there are so many people out there who are neither of the three, and still share Andy’s feelings.

        And about “so called” Americans, did it ever occur to you that your United States of America is only part of the two half continents called the Americas? Thus, Fidel Castro is not a socalled American, he IS an American like you and unlike me.

        But what you mean is that somebody who isn’t of your opinion is really more like Fidel Castro and not a “true” citizen of the U.S. I was happy enough to having been born after WWII but the husband of my god-mother was hanged for being “un-German” during WWII.

        Both assumptions in the ignominious tradition of Martin Dies and Joe McCarthy are preposterous: Neither is only the U.S “America”, nor is only right wing ideology “American”.


  4. Michael Herron says:

    “The national debate over economic policy is way off track and the stakes are as high as can be. In every important area of economic and social policy—health care, fiscal policy (deficits, debt, taxes), public investment, retirement security, climate change, education, job growth, income distribution—there’s so much misinformation, so many false assertions, that it is impossible for anyone paying attention to evaluate the choices with which they’re faced.”

    This is a major truth of our time and a major challenge to our democracy. The abundance of information and perspective available to Americans is greater than it has ever been. Yet people who study these things tell us we like to hear opinions we agree.

    More worrisome, while we can feel pity for “anyone paying attention”, I fear the impacts of those who vote and barely pay attention, if at all. We end up with democracy by media, for media, of the corporations.

    Excellent Post. I am looking forward to more insights. Truth telling is a good outside business.


    • Jeanne says:

      I agree with Michael. He sums it up well. I am often reminded of what a person I respect told me. There is this 1/3 that will always vote one way, and 1/3 that will always vote the other way. Then there is this 1/3 in the middle that will vote on the weather of the day, if it’s raining they won’t come out, the last sign they saw on the way to the polls, the last issue they had had with the government. Just shallow. I was at a forum last week, one of the presenters said, that Facebook is the equalizer after many years of not having the money to run those expensive media campagins. I hope so. And I don’t believe that the American people who still had a roof over their heads, money for a weekend getaway and new vehicle payment money left in the checkbook really realize the condition of the economy Sept.2008 or why. How bad things were the day Pres. Obama was sworn in. These stories need to be told and retold as we head to 2012.


      • Rob says:

        If it’s the same Michael Herron that I know, he is a fabulously smart and rigorous social scientist who has done great work on the butterfly ballot and on numerous other aspects of modern American politics.


  5. Ken says:

    Jared,

    I think that the fundamental problem is that it IS impossible for voters to make an informed choice about ISSUES.

    In the same way that we do not have a poll about which blood vessels need to be clamped during brain surgery, we also should not have a poll about whether more or less government spending is needed during a recession. Yet this is exactly what the media does, despite the fact that most of those polled cannot balance their checkbooks.

    Most intellectuals like you and I tend to overestimate the average person’s intelligence by about 20 points. This is easily fixed by going to youtube and doing a search for “Jaywalking” and watching some of those.

    The point that I am making is easily proved in a logical way by the following example:

    Suppose you go downtown to do some shopping before an important doctor appointment at 2pm. After doing some shopping, you look to see how close it is to 2pm, but find you have forgotten your watch (and phone), and stores make a point of never having clocks (true). Two gentlemen are standing near you, and you ask them “What is the time?”. Both look at their watches, and one says “1:55pm” and the other says “1:40pm”.

    So, do you have more time or not? Who is correct? You have no way of knowing.

    One of the biggest secrets of life is – People who ask questions have no way of evaluating the truth of the answers they are given.

    When people hear the factually false statement: ” We don’t have a revenue problem, we have a spending problem ” – they have no way of determining that it is false, since they have neither the time nor the training to properly evaluate the statement.

    So, as with the two men with watches, they end up choosing whichever personality seems more trustworthy to them.

    Politics cannot be about issues, it can only be about who is more convincing.

    Note that about 30% of people are birthers and another 30% are truthers, despite contrary evidence being widely available.

    In 2010, Krugman’s blog and column made the economic truths widely available, but his readers were outvoted by those who believed blogs saying the opposite. With all due respect, one more blog, however true, is not what will make any difference.


  6. Larry Mishel says:

    Jared,
    Great to have you with a platform to weigh in on the economic issues of the day!
    Larry


  7. beezer says:

    Look forward to regularly reading your posts. While your observation about the inability of most folks to sort through all the available information is true, the fact is that the more folks involved doing honest legwork, doing the explaining, will win out.

    I believe the 2012 election will turn out to be one of ‘buyer’s remorse’ where the Tea Party will be shown the door. Why? Because their harsh social and economic views are inconsistent with the majority opinions of how the world should operate.

    So post often.


  8. Miracle Max says:

    Welcome to the jungle. You should try to average two F-bombs a week. And I’ll be disappointed if you don’t insult Greg Mankiw before the month is over.


  9. Q&A: The White House Economic Team’s Departing Lefty | Swampland says:

    [...] Center for Budget and Policy Priorities. He’ll also be blogging, and you can see from his first post that he left the White House because he was frustrated—not with President Obama or his more [...]


  10. Joe K says:

    Looking forward to your commentary as well your contributions to CBPP!!


  11. Peter Nightingale says:

    Dear Mr. Bernstein,

    You write:

    “The national debate over economic policy is way off track and the stakes are as high as can be. In every important area of economic and social policy—health care, fiscal policy (deficits, debt, taxes), public investment, retirement security, climate change, education, job growth, income distribution—there’s so much misinformation, so many false assertions, that it is impossible for anyone paying attention to evaluate the choices with which they’re faced.”

    How can you have an intelligent discussion, if you omit from list the single, dominant item of the discretionary budgett, namely, military spending, which for years has fluctuated in the 50% to 60% range? The budget-cut show Democrats and Republican put on, with all its bipartisan hyperventilation, is about just a tiny fraction of what has already been swept under the rug of the Washington consensus before the media arrive on the scene to do their so-called reporting.

    How much brainwashing did it take to cause this national delusion, in which you seem to participate without the slightest hesitation?


  12. Russ says:

    Looking forward to future posts!


  13. square1 says:

    I am thrilled to have the voice of a sane economist added to the public debate. That aside, Mr. Bernstein goes far too easy on the present occupants of the White House.

    Interestingly enough, the White House has tremendous power to shape the debate. But that power is rarely employed.

    Jared Bernstein writes that “I believe that if we were to make policy based purely on the economics, more stimulus would be at the top of the list.” But when has the White House ever said that? Has President Obama or any member of his economic team (in an official capacity) ever claimed that the 2009 stimulus bill was too small? If so, such comments were rare and not part of a concerted effort to shape public opinion.

    Even worse, when President Obama first extended the Bush tax cuts for the wealthy and then most recently cut a deal on spending, he praised those deals on their merits. He bragged about the “historic” spending cuts. He didn’t say that the GOP forced him to agree to a “job-killing” budget deal.

    Yes, there is a lot of economic misinformation out there. And this White House has decided, for rather shallow political reasons, to play along with the nonsense.


  14. DrSteveA says:

    The number one economic issue is, and has been for quite a while, the horrendous increase in income and wealth inequality; stagnant incomes for 90% of us, and truly insane increases for the top 1%. I am not sure what the solution is… increase miniumum wage, increased EITC, more progressive taxation…?

    But anybody who leads with talking about the deficit, to say nothing about tax cuts, should be hooted off the public the stage.


  15. Melissa Boteach says:

    Looking forward to reading your commentary!


  16. Sister Artemis says:

    Wonderful posts – linked over from Ezra Klein’s blog, and I’m really, REALLY glad I did. I’ve read all the posts you put up so far (thru “The Correct Diagnosis” posted Tuesday night 5/17) and I must thank you for your clear language. I’m no economist, but try to understand things as best I can, and your way of explaining things helps a lot. Chances are I won’t agree with everything you say, but if the entries so far are a good example, I’ll not regret reading a single word. Thank you!

    Consider yourself added to my RSS, if that means anything! ;)


  17. Michael C. says:

    Unfortunately the administration validates all the false claims and all the false choices by buying into the Republican rhetoric about a fiscal domesday being around the corner. I would like to see someone in the White House (preferably the president) paint a picture of what this country would look like today without deficit spending on things like unemployment, Medicaid and food stamps.


  18. Tom Matzzie says:

    Jared, you’ve been an important voice in our economic dialogue since I was in college. Glad you’re back on the outside. Some topics to explore:

    What can be done about housing so the ongoing crisis doesn’t wipe out what little savings the Middle Class still has?

    What can be done to improve income inequality?

    What can be done to create jobs now?

    Good luck.


  19. Chuck Sheketoff says:

    Thanks for a job well done with my tax dollars…and I am so, so glad to have you back on the outside working for the WITSs so the YOYOs don’t prevail.


  20. johnnyblaze360 says:

    Hi, Jared. Any explanation as to how we just hit the debt ceiling (again) and are 14 trillion in the hole? When you say you worked with a smart and inspiring team of economists in the WH I’m curious to know what the terms “smart” and “inspiring” mean exactly? I do applaud you for not running away from your record though as most would certainly do as fast as humanly possible.


  21. Eric Titus says:

    “I view the conservative agenda right now as trying to implement a large shift in who bears the risk of those events in our personal and economic lives that are inadequately handled by private markets.”

    Great point. Our society right now functions too much like a slot machine. Nine out of ten people who have no or inadequate health insurance won’t have a problem–but one out of those ten people will, and likely go bankrupt as a result. Same with payday loans, mortgages, etc. If 1 out of 10 airplanes had serious issues, people would notice pretty quick. If one out of a thousand oil wells leaks millions of gallons into the gulf that is highly visible. But at the moment you have a substantial portion of the population that thinks everying is A-Ok because they haven’t had the bad luck to be affected by a problem.


  22. Kenneth Mark Hoover says:

    So you left a job in which you COULD make a difference for a mininal role in which you become just another meaningless jabbering voice outside the halls of power?

    Then again if this is the kind of decisions you tend to make then Mr. Obama, and the country, are probably better off without you.


  23. Joshua S says:

    Prof. Bernstein, thanks so much for the post. I look forward to reading sane, reasoned dialogue rather than the shouting match that much of the web has become.


  24. Michael Sternfeld says:

    Finally, some econmic and politcal sanity in a sea of far right and far left kool aid aimed at voters who would vote race or religion and not pay attention to economic issue that will leave them destitute!


  25. James Hankins says:

    The fundamental problem as I see it is the following: If the Ship of State has a rudder, who is manning it? You refer to the “discussion,” the “debate” and the “legitimate argument,” but we are drowning in all of the above. But none of that has anything to do with the implementation of policy as far as I can see. To the contrary, the exercise of power and the implementation of policy takes place on another plane that is not accessible to reasonable discussion or to popular input, whether it be the vote or the public forum–which is precisely, I would assume, the reason you left government. The true nexus of power is not in “ideas” as explored in public forums; it is in the simple fact that the arguments of the greed merchants have carried the day. I don’t know how it can be put any more plainly than with a simple aphorism: He who has the money makes the rules. Everything else–all the media hoopla, the political subterfuge, the propaganda and disinformation, the endless “debate”– are just window dressing in an attempt to explain to ourselves what is painful for us to admit: we are an oligarchy whose citizens–through sloth, ignorance,inattention and self indulgence–have allowed our country to be systematically taken from us. We are all guilty, individually and collectively.


  26. peter mccauley says:

    Could be that the only thing more difficult than figuring out how best to improve our situation — is describing the solutions so clearly that most ordinary folks (like me) will find the explanation agreeable. Please do keep trying (it is really important.)


  27. Anonymous says:

    You said you left because of the poor quality of the political discussion in the country.

    Don’t you think it’s the president’s job to design, shape, and drive national political discussions instead of only reacting to political debates designed and led by others and otherwise staying cloistered up in the white house?

    If it’s not the president’s job, then whose is it?

    And if you think the president’s already trying to drive the national discussion, isn’t the base quality of the national discussion proof that the president is failing?


  28. Misaki says:

    “In every important area of economic and social policy—health care, fiscal policy (deficits, debt, taxes), public investment, retirement security, climate change, education, job growth, income distribution—there’s so much misinformation, so many false assertions, that it is impossible for anyone paying attention to evaluate the choices with which they’re faced.”

    Fundamentally, this is due to recent historical advances in measuring our social, economic and technological environment causing people to assume that the ‘system’ of judgements and evaluation heuristics they encounter are accurate.

    Most people assume that other people are doing the hard work of evaluating whether these metrics are accurate, while at the same time almost no one listens to people who point out the flaws in the validity of these metrics, due to the perception that a standard for evaluation can only arise by replacing the previous standard when neither is likely to be inherently more accurate.

    This can ironically be seen in a paper that introduced the idea of “countersignalling” (http://zhongwe2.serverpros.com/cs/), in which the authors failed to perceive the importance of the limited information available to participants in a game on their choices to signal or not signal, due to the significant lack of homogeneity of society on a large scale which results from active and conscious efforts by the participants and the implications of being aware or unaware of the decisions of other players resulting from this non-homogeneity.

    Within this context, any efforts to “educate people on more accurate standards to evaluate information” on these major issues, is likely to lead as much overall harm as it does good, because the assumption that the newly learned methods are accurate will naturally lead to problems when those specific methods deteriorate in quality or when methods on other issues are assumed to be just as accurate, when in fact they are not.

    Similarly, inaccurate standards will lead to an eventual improvement in the evaluation methods due to the system failures which will result, causing discussion and analysis of the specific failures. Educating people on how to critically evaluate information regardless of existing metrics is a somewhat more difficult thing to do, but a system similar to the one described at http://pastebin.com/Q86Zhgs9 should work.


  29. Charles Becker says:

    The Keynesian intervention of recent years was nothing but the last shot of morphine in the medic’s field kit. The United States is now unable, and Europe unwilling, to face facts and take necessary measures. Control of events is very nearly entirely out of the hands of government and industry authority. The much despised free market is close to breaking the last shackles … check the price and yield of Greek sovereign debt, and that of other, larger troubled European nations.

    The only thing left is for central banks to buy unlimited amounts of debt in a futile attempt to prevent the inevitable.

    Don’t for one second fool yourself, the sovereign debt of the US, at this point, is basically backed by the United States Marine Corps.

    The underlying structural collapse of the financial markets continues to vividly develop. And the structural decline of the US economy, which began around 1970 and tipped decidedly negative by 1980, also remains completely ignored. Keynesian interventions were never intended to address these types of structural catastrophes. And deficit stimulus spending cannot fix the collapse of either the financial sector or the manufacturing base. Impossible.

    It would be a ray of light to simply see someone lay the cards on the table: US post-War prosperity was the direct result of a nearly complete absence of foreign competition, and the selfless labors of The Greatest Generation. We benefit from neither of those factors today. We either develope a new model for American prosperity, or the lower 1/3rd of America slides off into the Third World. Period.


  30. Brad Omland says:

    I’m a libertarian and strongly oppose Keynesian policies and government intervention in all public matters, but I must say that this is an excellent, articulate blog. I have long believed that despite the vast amount of “information” available to the public, Bernstein says it best – “it will be impossible for voters to make an informed choice.”


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