Goolsbee: Keep jobs report out of debt talks
JEREMY HOBSON: OK, let’s get to the jobs report that came in this morning from the government. It said the economy created just 18,000 jobs last month — that’s much lower than expected. It also said the unemployment rate ticket up to 9.2 percent.
STEVE CHIOTAKIS: We’re going to start now with the White House take. Austan Goolsbee is Chairman of the Council of Economic Advisers in the Obama administration. He joins us from Washington. Good morning, Austan.
AUSTAN GOOLSBEE: Good morning.
CHIOTAKIS: If there is an economic recovery going on in this country, where is it?
GOOLSBEE: Well, look — this jobs report reiterated what we have known and what we saw in the last one which is in the start to middle of this year, we had some significant headwinds that slowed the growth rate down in the economy. And so previous to to the last two months, we were growing at a more robust rate and we added more than 2 million jobs in the private sector in the preceding 15 months. When the economy slows down, so we’re growing but we’re not growing that fast, that has a negative impact on job growth. No question.
CHIOTAKIS: You’re saying headwinds as in temporary factors — Japan, the weather, some other stuff — right? But you can’t blame it all on that can you?
GOOLSBEE: You know, I would add also we’ve added some uncertainty as where people are actually going out in public and saying well maybe the U.S. government shouldn’t pay its bills. As some of the kind of headwinds that we’ve been facing. What I would say is if you go look at private forecasters — the Fed, the Congressional Budget Office, etc. — virtually all of them are forecasting some rebound in the second half of the year. So now you cannot blame everything on temporary factors, but there are enough temporary factors that most of the private sector is saying they expect some rebound.
CHIOTAKIS: I don’t want to keep nay saying, but a lot of those economic forecasters were saying the same thing about the first half of the year right?
GOOLSBEE: Some of them were. Look you can take that up with them. I never try to forecast anything beyond what’s in our official government forecast. So, that does show some rebound in the second half of the year and continued growth in 2012.
CHIOTAKIS: I want to talk about the debt talks that you mentioned and you say that some people say it’s OK for the U.S. not to pay its bills. How will this jobs report do you think play into the negotiations going on at the White House between the president and these Congressional leaders over the debt ceiling?
GOOLSBEE: You know I don’t totally know the answer to that. Certainly the actual legislative discussion and negotiation is one that’s taking place within the Congressional leadership itself and with the president. I would say personally we shouldn’t be using data as a leverage point for negotiations. In my view, these numbers, and the numbers from last month, should be a call to action to Washington that if we want the private sector to be leading the recovery, which is the thing that we can do at this point — it shouldn’t be the government as the primary driver of long-term recovery — we should stop bickering and pass a series of bipartisan things that are just sitting there unpassed as Congress is arguing about it. So things like passing the free trade agreements to expand the number of export-related jobs in the country by hundreds of thousands, passing an extension of the payroll tax cuts, creating an infrastructure bank — which has been created on a bipartisan basis and is now just sort of sitting there, and doing a bipartisan balanced deficit reduction plan in which we remove the uncertainty that is lingering over the market in the last two months. There are people in public saying maybe we shouldn’t pay our bills. Look we ought to do all of those things right now. All of those are things that have historically been completely bipartisan. And we ought to do them. There are others — patent reform — there are five or six major things that we could do right now if the two parties would stop bickering and I think they would go along way to helping the private sector get back growing and leading the recovery.
CHIOTAKIS: What about more federal stimulus?
GOOLSBEE: I mean, of what form?
CHIOTAKIS: You had a $800 billion package that came out a couple of years ago. Do you we need another one?
GOOLSBEE: OK well look — that was passed at a moment of free fall in the private sector. That was a moment in which the only entity that could help prevent a depression was the federal government. We have moved out of that rescue mode into more of a transition mode. And I think the right policy response are those things that are going to help the private sector to start growing on its own — like what we did in the tax deal in December. I mean investment incentives and the payroll tax cut, those are things which can work quite effectively in a period where the private sector is getting its mojo back. And those are the things we ought to be doing right now. Now that doesn’t have to be exactly the same form as what you would do as a government when you’re in rescue mode and trying to prevent a depression. But as I say there are five or six major bipartisan things that we could do right now if people would just stop bickering and do them. And it strikes me that these jobs numbers are a call to action. For the sake of the economy, let’s start doing some of this stuff.
CHIOTAKIS: But realistically, the bickering is not going to stop. You realize that right?
GOOLSBEE: Well, look. I’m just a policy guy. I’m no political expert but I would think that people are going to look at the economy. They can see we saw that the growth rate is not fast enough — that we’ve got to do more. If the jobs numbers had come in well better than expected, rather than worse than expected, I would’ve been saying the same thing. And I can prove it because I was saying it when the jobs numbers were coming in better than expected. And that is the recession began in 2007. We lost something like 8 million jobs. We’ve got a long way to go, and what we need to do is get the growth rate up so that the hiring rate increases and that is the only way we’re going to grow our way out of this. It took a long time — this crisis and downturn were many years in the making. And the only thing we can do is just keep plugging our way to get out of it. And when you see numbers like this, that is a call to action that we need to do things to get the growth rate up. And there are a whole bunch of things that we can do on a bipartisan basis. So what I don’t understand, why focus on the many things that we disagree on, let’s focus on some of the things that we actually agree on. And let’s pass those.
CHIOTAKIS: Austan Goolsbee, Chairman of the White House Council of Economic Advisers. Sir, thank you.
GOOLSBEE: Great talking to you.
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