Legal Commentary

Romer On The Unemployment Crisis: "It's Aggregate Demand, Stupid"

By Big Tent Democrat

Christina Romer, chair of the president’s Council of Economic Advisers, says:

The overwhelming weight of the evidence is that the current very high—and very disturbing—levels of overall and long-term unemployment are not a separate, structural problem, but largely a cyclical one. It reflects the fact that we are still feeling the effects of the collapse of demand caused by the crisis. Indeed, at one point I had tentatively titled my talk “It’s Aggregate Demand, Stupid”; but my chief of staff suggested that I find something a tad more dignified

Does Deficit Hawk Tim Geithner know? Romer continued:

It doesn’t have to be this way, she argued, essentially making the case for more government stimulus to help the economy. “We have the tools and the knowledge to counteract a shortfall in aggregate demand. We should be continuing to use them aggressively.”

Does anyone else in the Obama Administration agree? See also Brad DeLong and Matt Yglesias.

Speaking for me only

Full post as published by TalkLeft on April 18, 2010 (boomark / email).