Most countries faring worse economically than United States

The US recession that officially ended three years ago "would have been a hell of a lot worse" without President Barack Obama's stimulus spending, a former White House aide said 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 slow economic recovery, the more-than-$800 billion stimulus package helped keep the United States out of 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 reflect the argument Obama must make in trying to persuade voters to give him a second term.

Obama, who accepted his party's nomination for the 2012 election in a speech to the DNC on Thursday night, acknowledged Americans' unease over the economy and their own finances. Meanwhile, he insists that without the 2009 stimulus and his other 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 Republican candidate Mitt Romney would return Americans to policies that created the current mess.

Despite the 2008 global financial crisis, the US economy is faring comparatively well, but restoring growth to pre-recession levels takes time, Goolsbee said.

"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 at the panel discussion on Tuesday that the White House is unlikely to support a "financial transaction tax", which would affect 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. 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 boosting manufacturing and exports, 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 government 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 weak demand in almost every country limits any possible short-term gains for US exporters.

However, demand in China, the third-biggest importer of US goods behind Canada and Mexico, has remained strong.

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.

josephboris@chinadailyusa.com

(China Daily 09/08/2012 page6)