Most countries faring worse economically than US, ex-aide says
Updated: 2012-09-05 11:20
By Joseph Boris in Charlotte (China Daily)
The US recession that officially ended three years ago - though millions of Americans remain frustrated by unemployment, debt and shrunken home values - "would have been a hell of a lot worse" without President Barack Obama's stimulus spending, a former White House aide said on Tuesday.
Austan Goolsbee, who headed Obama's Council of Economic Advisers in 2010-2011, said that despite current US unemployment of 8.3 percent and the economy's slow recovery, the more than $800 billion package helped avoid pushing the United States into a devastating recession.
Speaking in a jobs-and-economy panel discussion in Charlotte, North Carolina, on the first day of the Democratic National Convention, Goolsbee's remarks prefigure the sometimes confounding argument his ex-boss must make in trying to persuade voters to give him a second term.
Obama, who will accept his party's nomination for the 2012 election in a speech to the DNC on Thursday night, has acknowledged Americans' unease over the economy and their own finances while insisting that without the 2009 stimulus and other of his policies, conditions now would be much tougher - an argument that Republicans have derided as either impossible to prove or flat wrong.
Furthermore, the president and other Democrats say that voting for Obama's opponent Mitt Romney would return Americans to Republican policies that created the current mess.
Because the financial crisis that began in 2008 was global, Goolsbee said, the US economy is faring comparatively well but that restoring growth to pre-recession levels takes time.
"I'm not downbeat at all. Almost any other country in the world would rather have our problems than the problems they have," he said, pointing to Europe's debt crisis in particular.
Dan Pfeiffer, Obama's communications director, said on the same panel on Tuesday that the White House is unlikely to support a "financial transaction tax", affecting stocks and bonds, such as the one France implemented in August.
"We don't always agree with the rest of the world," Pfeiffer said in response to a question from an audience member at the discussion, Growing the Economy: Creating Jobs and Building Opportunity, sponsored by news outlet Politico and the Washington-based National Association of Manufacturers. The White House adviser said, however, that the idea of the tax has been discussed.
Proponents say a tax of as little as 1 percent could raise billions of dollars in needed revenue while discouraging speculation among big investors, including those that quickly buy and sell using complex computer trading systems.
But critics argue that the tax would make US financial markets less attractive to investors, pushing their business overseas. Treasury Secretary Timothy Geithner is among members of Obama's administration who have said they oppose the tax.
Though the panel generally agreed that sustained improvement of the US economy will depend on more manufacturing and exports of the goods produced, policy debates on international trade have yielded in importance to more pressing economic concerns in Washington.
Goolsbee, who left his White House post for a professorship in economics at the University of Chicago, said trade has become a "second-tier issue" even among business leaders, yielding to acrimonious divisions between Democrats and Republicans in Congress over jobs, healthcare, the housing market and the US government's debt.
Susan Molinari, the chief lobbyist in the Americas for tech giant Google Inc and a Republican former US congresswoman from New York, partly explained the seeming paradox of a renewed focus on exports while trade policy recedes in importance.
She said on the panel that free-trade agreements "are always controversial" among political leaders in Washington, while Goolsbee pointed out that soft demand in almost every country limits any gains that US exporters might realize in the near term.
China is the third-biggest importer of US goods, behind Canada and Mexico. Last year, 420 of the 435 districts represented in Congress recorded higher growth in sales to China than to other export markets, according to a survey released in August by the US-China Business Council. In 418 of the 420 districts with year-on-year growth, exports to China hit triple digits between 2002 and 2011.
"Exports to China contribute to America's economic recovery and support good jobs for American workers," said the business group's vice-president, Erin Ennis.