‘Oomph’ There it is: Optimistic Romer Says ‘Oomph’ From Stimulus Will Usher in ‘Very Rapid Growth’
EmailABC News’ Matthew Jaffe reports from Arlington, Va.:
Critics have complained the Obama administration has been all doom and gloom about the economy, but in an apparent shift in rhetoric since the President’s address to Congress last week, one of his top advisers today predicted the stimulus package will prove even more beneficial than expected in helping the nation out of its recession and ushering in a period of "very rapid growth".
“A common argument is that fiscal stimulus will have less effect because financial markets are operating poorly and lending is not flowing. I want to offer a different view,” said Christina Romer, chair of the Council of Economic Advisers. "I think it is possible that fiscal policy will have even more oomph in this situation. When households and businesses are liquidity-constrained by reduced lending, any money put in their pockets is more likely to be spent.”
In a speech this morning at an economics conference in northern Virginia, just outside Washington DC, Romer, noting that "the deeper the recession, the more rapid the rebound," forecasted that when the country recovers from its current crisis, it will enjoy a period of “very rapid growth”.
“When the economy turns around and confidence returns, the resulting pent-up demands spur rapid growth," she said. "What this means for the current situation is that fiscal policy may have a very large effect at some point. Given how far the economy has fallen, it is clear that sooner or later, we are going to have a period of very rapid growth as things return to normal.”
In fact, Romer said, the stimulus, the financial rescue plan, and the housing plan could combine to become the modern-day version of President Franklin Roosevelt’s New Deal that drove the country out of the Great Depression.
“In my mind, the American Recovery and Reinvestment Act, together with the financial stabilization plan and housing reforms announced over the past few weeks, may provide just such a Rooseveltian moment,” she said. “We could see fiscal policy having more effect than usual by giving American consumers and producers the confidence and certainty they need to get back to spending and investing.”
Romer’s optimistic address to the National Association of Business Economists’ annual conference came at a time when she acknowledged that consumer and business confidence has been crumbling.
"Concern over what could happen is almost surely greater than perceptions of what is likely to happen," she noted.
Romer later fielded one question expressing concern that the administration’s tone on the economy has been too negative, but her comments today were anything but.
Just one day after the Dow dropped to its lowest close in 12 years, Romer said, “We feel very confident that eventually the markets will respond when they understand the policies and when the policies start doing what we firmly think they’re going to do.”
On the administration’s budget projections, she acknowledged that she was “more optimistic than average”, but said that this "rosier" outlook was based on her belief that the administration is implementing good policies.
If there was any pessimism from Romer, it was her assessment that the nation is enduring and will endure a difficult first three months of 2009.
Citing last week’s second reading of 2008 fourth quarter GDP getting revised down more than expected, Romer warned that “we’re now thinking the first quarter is gonna be pretty lousy.”
One negative prediction on a day when the view from the administration was predominantly positive.
– Matthew Jaffe
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Can you all please actually question some part of the idiocy coming out of Obama’s people? The idiocy of Obama’s economic advisors continues….actually drawing a parallel, favorably, to FDR’s economic plan that of course resulted in nearly a DECADE of 20 percent unemployment. So we’re “saved” because we’ll have FDR’s decade of double digit unemployment prior to a recovery? I feel like we’ve entered an alternative universe devoid of logic.
Quote:
In fact, Romer said, the stimulus, the financial rescue plan, and the housing plan could combine to become the modern-day version of President Franklin Roosevelt’s New Deal that drove the country out of the Great Depression.
“In my mind, the American Recovery and Reinvestment Act, together with the financial stabilization plan and housing reforms announced over the past few weeks, may provide just such a Rooseveltian moment,” she said. “We could see fiscal policy having more effect than usual by giving American consumers and producers the confidence and certainty they need to get back to spending and investing.”
Posted by: G | March 3, 2009, 11:57 am 11:57 am
Jaffee quotes Romer:
“eventually the markets will respond when they understand the policies”
Riight. Capitalism’s in the crapper because the dumb old “markets” don’t understand the “Obama” organization.
Where do they GET these people … and what kind of happy-talk DRUGS are they on?
Bob Herbert, today:
“The United States is on its knees economically. As Obama fights for his myriad domestic programs and his dream of an economic recovery, he might benefit from a look over his shoulder at the link between Vietnam and the still-smoldering ruins of Johnson’s presidency.”
The “Obama” organization sooo sucks.
Posted by: Human Intelligence | March 3, 2009, 11:57 am 11:57 am
Romer:In my mind, the American Recovery and Reinvestment Act, together with the financial stabilization plan and housing reforms announced over the past few weeks, may provide just such a Rooseveltian moment,
=========
I wonder if Romer even read the specifics of the ARRA as written by noted financial guru Nancy Pelosi.
Posted by: MayBee | March 3, 2009, 12:04 pm 12:04 pm
Whee did she go to school? The school I went to required both history and econ. She seems to have missed both.
Posted by: smith | March 3, 2009, 12:08 pm 12:08 pm
but proof reading was not required sorry where
Posted by: smith | March 3, 2009, 12:09 pm 12:09 pm
“Dow down again today.
Obama, shut the piehole! Can’t you figure it out that everytime you open it, the markets tank.
Save us and resign. You don’t know a thing of what you are doing.
Resign now. View it as patriotic.”
….
If a president ersigned every time the market went down, then there would be no presidents in office. GWB would have resigned in 2000.
The people who should resign are the bank CEOS who caused this mess and the people who helped deregulate the market. They are the reason the market keeps falling. Ask any financial expert.
Posted by: reason | March 3, 2009, 12:15 pm 12:15 pm
“We feel very confident that eventually the markets will respond when they understand the policies and when the policies start doing what we firmly think they’re going to do.” +++++++++ The markets know what’s going on and what direction we’re going. Keep throwing good money at bad money, sooner or later you will run out of money. Next on Obama’s agenda, “The Tax Man Cometh”. Maybe your income tax was lowered, but you’ll be paying it back and then some through other taxes. A new era of Spend & Tax.
Posted by: Willy | March 3, 2009, 12:18 pm 12:18 pm
Tag Team back again check it top
Wreck it – let’s begin
Party people let me hear some noise
DC’s in the house jump jump and rejoice
There’s a party over here
a party over there
Wave your hands in the air
Shake the deriere
These three words mean you’re gettin’ busy
Whoomp there it is
whoomp there it is
Posted by: Bridget | March 3, 2009, 12:19 pm 12:19 pm
“Hope”? NOPE!!!
And “Change” is what you will “hope” you have after this Chicago thug mob gets finished destroying the USA.
RESIGN Obama. Your approval is plummeting, your disapproval ratings have doubled. The stock market has NO CONFIDENCE in you, your cronies, or your integrity. People’s lives and futures are being destroyed because of your deliberate, hate-motivated Marxism.
OBAMA = FAILURE
Posted by: JD | March 3, 2009, 12:21 pm 12:21 pm
I wonder if Romer thinks the promised increase in the capital gains tax rate is a good incentive to get people investing again.
Posted by: MayBee | March 3, 2009, 12:25 pm 12:25 pm
LMAO people are abandoning this marxist/socialist policy of obamas left and right..he has declared war on the middle class
Arrest BArney Frank
Arrest chris dodd
appoint a special prosecutor to investigate these crooks for their dealings on fannie mae/freddy mac
Posted by: bawlknee phwank | March 3, 2009, 12:38 pm 12:38 pm
I am more inclined to believe that the markets foresee the total disarray in the republican party as a sign that the good old days of UNBRIDLED capitalism are over for a long long time
Posted by: tom | March 3, 2009, 12:40 pm 12:40 pm
does Romer have any kind of degree, if she does, they need to check for drugs. something is not right in her head, look at the stock market, housing, basically everything is slumping. You can say it’s bouncing back all you want, it still does not make it true. Looks like a BHO supporter, or member of the Church of Obama the savior.
Posted by: USdoomed | March 3, 2009, 12:44 pm 12:44 pm
Romer is in La-La land. These policies will be about as effective as buying lottery tickets to fix the economy.
Posted by: Obama, the second coming | March 3, 2009, 12:47 pm 12:47 pm
what the heck! Timmy is on tv talking about early childhood education and no new revenue requests until 2011
He must be short the market
Hope he is banking some for taxes
Posted by: smith | March 3, 2009, 12:55 pm 12:55 pm
It’s so funny reading the comments today…especially the ones complaining that Presidnet Obama’s Stimulus Plan is dead in the water. Do you realize that if it’s dead in the water, then you won’t be typing your sad stories on the computer…’cause you won’t be able to afford one. I guess the Republicans have a better plan, like the one they followed during the Bush years that put the country in the place it is now. Then again, when the Republican Party leader is a comedian with drug and moral problems, what can you expect.
Posted by: algwriter | March 3, 2009, 12:57 pm 12:57 pm
Watching the Tax Cheat Formerly Known as the Chairman of the Ways and Means Committee and the Tax Cheat Formerly known as the Secretary of the Treasury patting each other on the back and telling each other it’s all good, don’t worry be happy.
Posted by: Bridget | March 3, 2009, 1:01 pm 1:01 pm
BREAKING NEWS!!!!
TurboTax Timmy is speaking before congress at this moment
GET YOUR MONEY OUT OF THE MARKET NOW..after he finishes speaking the markets will be at 0
This announcment sponsored by..Barracks new Deal. socialism for everyone
USSA (united socialist states of America)
Posted by: bawl knee phwank | March 3, 2009, 1:14 pm 1:14 pm
Jim Cramer of CNBC lambasts Obama’s economic disaster
Watch the video at Gateway Pundit!
Posted by: Michelle | March 3, 2009, 1:15 pm 1:15 pm
I still have a job, I have lost about half of my retirement account , my home value has dropped. To make up the losses I’ll have to save more and spend less as retirement and or a job loss will be likely the next few years.
I’ll bet that I am not the only one in this position so it is unlikely that the economy will be spurred along by people like myself.
Me thinks she is slightly more optimistic than I am and the 13 dolar tax credit won’t change my attitude.
Posted by: david | March 3, 2009, 1:25 pm 1:25 pm
In fact, Romer said, the stimulus, the financial rescue plan, and the housing plan could combine to become the modern-day version of President Franklin Roosevelt’s New Deal that drove the country out of the Great Depression.
————————————–
Remind me of how long that took .
Posted by: mad | March 3, 2009, 1:26 pm 1:26 pm
what the heck! Timmy is on tv talking about early childhood education and no new revenue requests until 2011
He must be short the market
————————————–
If you recall, one of the errors on his taxes was failure to pay the penalty for cashing out a pension fund.
Additionally, Bloomberg is reporting that pension funds are very underfunded.
Posted by: mad | March 3, 2009, 1:31 pm 1:31 pm
That’s a way to put it scientifically…
No wonder the market stank every time the Obama economic team marches out of their Cheney bunker…
Posted by: matt | March 3, 2009, 1:32 pm 1:32 pm
PB0: 60 people get jobs today from stimulus $$.
The Smartest Clueless Leader is so brilliant to have created 60 jobs today from the $1.5T stimulus that will cost your children and grandchildren for generations to come.
We kat only hope, HOPE, that PB0 has better things to do, i.e., stop giving speeches so that the Stock Market would stop sliding down, than counting numbers.
Posted by: ace | March 3, 2009, 1:46 pm 1:46 pm
Here is my problem…which one of the members of the Council of Economic Advisers has every had to create a job or make a payroll. Easy answer…none. In a time of crisis we have 3 college professors and one community activist trying to make decisions on what is best for business. And not one of them have any idea about what makes business tick.
Posted by: jb | March 3, 2009, 1:57 pm 1:57 pm
What is with “8 years of bush” What a lame blame comment. The Economy was quite fantastic for 6 of those 8 years and the country remained safe for all eight. Congress is in charge of legislation. Where was all the legislation for reforming the markets during the democratically controlled congress? They were having hearings on Steroids and baseball!
Posted by: beati | March 3, 2009, 2:13 pm 2:13 pm
++++eventually the markets will respond when they understand the policies++++
NEWS FLASH – THEY ALREADY DO, AND NO ONE BELIEVES IN THESE INSANE POLICIES!
Posted by: Mike_C | March 3, 2009, 4:19 pm 4:19 pm
+++++ Citing last week’s second reading of 2008 fourth quarter GDP getting revised down more than expected, Romer warned that “we’re now thinking the first quarter is gonna be pretty lousy.” ++++++
Does anyone need any further proof that these people have no idea what is going on OR what to do about it????
The 1st qtr is 2/3 over you idiots!!!!
Your telling me at this point …because of some 4th qtr numbers…you “think” the first qtr is going to be lousy!!!
The best investment that Obama can make for this country right now is to buy a few dozen pairs of socks and start stuffing them into the mouths of every person in his administration including himself!!!!
Posted by: Mike_C | March 3, 2009, 4:23 pm 4:23 pm
The stock market values directly reflect future earnings growth for corporations. I think the Democrats have made it clear that they do not want earnings to increase for corporations. The Democrats on this site, in Congress, and in the media continually characterize corporations as fundamentally “evil” and in need of “regulation”. With this sort of characterization, I certainly won’t invest my earnings into the stock market. I think others have seen this as well, and this is why the market has headed down since Obama looked likely to win the office.
Until we have a change from this government attitude, there is no hope that the market for stocks or homes will increase.
Posted by: Morris | March 3, 2009, 5:54 pm 5:54 pm
In 2010, state and federal spending will be about $6.5 trillion. The GDP total of all goods and services produced is estimated at about $14.2 trillion. So this means that nearly half of everyone’s work in this country will go to the government. 50%. Just ten years ago, it was only 2.8 T out of 8.3 T, a third. 33%. In the 1960s, it was a quarter. 25%.
Yet the burden is very unbalanced. The top 50% of works pay 97% of federal taxes. The bottom 50% pay 3%. That’s $32k as the dividing line for 2006.
Increasing government spending will do little to increase the quality of life for citizens of this country. It will only hurt actual employment and earnings for individuals.
The more that media vilifies business, and deifies government, the less likely that individuals will have the chance to earn more money and improve their standard of living. Instead, individuals will become dependent on ever-decreasing handouts from government.
Posted by: FreeToChoose | March 3, 2009, 6:23 pm 6:23 pm
Unless they use that stimulus money to build some factories and start up some multi-billion Fortune 500 corporations, I am at a loss to see how it’s going to stimulate anything except the crooked politician’s campaign accounts.
Posted by: RR GOP | March 3, 2009, 6:39 pm 6:39 pm
“Just one day after the Dow dropped to its lowest close in 12 years, Romer said, “We feel very confident that eventually the markets will respond when they understand the policies and when the policies start doing what we firmly think they’re going to do.”
> I think the markets (i.e., investors) UNDERSTAND what the Obama policies will do, thus the exodus from the market
“On the administration’s budget projections, she acknowledged that she was “more optimistic than average”, but said that this “rosier” outlook was based on her belief that the administration is implementing good policies.”
> This investor isn’t buying it
Posted by: tjp612 | March 3, 2009, 7:43 pm 7:43 pm