In his press conference today, the President signaled an understanding of the effectiveness of stimulus along with the need for more of it. He also stressed the very real political constraints he faces in this regard.
“I’m absolutely convinced, and the vast majority of economists are convinced, that the steps we took in the Recovery Act saved millions of people their jobs or created a whole bunch of jobs.
So my strong preference would be for us to figure out ways that we can continue to provide help across the board. But I’m operating within some political constraints here, because whatever I do has to go through the House of Representatives.
So as part of a component of a deal, I think it’s very important for us to look at what are the steps we can take short term in order to put folks back to work. I am not somebody who believes that just because we solve the deficit and debt problems short term, medium term, or long term, that that automatically solves the unemployment problem.”
He talked about a payroll tax holiday (“…which might not be exactly the kind of program that I would design in order to boost employment but does make a difference”–I agree), extending unemployment benefits, infrastructure, and trade deals. All “coulds,” if not “shoulds.”
Clearly, the President is responding to the perception that he’s abandoned fiscal stimulus at a time when that’s about the best medicine for what ails us. He may not press as hard as some of us would like, but I was glad to hear him make these points.
The ghost of Keynes may not be staying over in the Lincoln Bedroom anytime soon, but at least he made a brief appearance at the White House today.