President Obama's former top economic adviser is jumping on Friday's weak jobs numbers to make the case that the economy needs a much bigger boost from Washington than it's getting.
"The May employment report is further evidence that the US economy needs additional help," Christina Romer (pictured), who stepped down last fall as chair of the White House Council of Economic Advisors, told The Lookout via email.
U.S. employers added only 54,000 jobs in May--about a third as many as economists had expected--the Labor Department said Friday.
Romer, who now teaches at the University of California, Berkeley, also noted anemic first-quarter growth and a slowdown in manufacturing activity as evidence that "the economy is struggling."
What should Washington be doing? Romer called for additional fiscal stimulus, as part of a package that reduces the deficit over the long term. That spending, she said, should take the form of a cut in the employer side of the payroll tax--an idea with bipartisan appeal--as well as more aid to state and local governments. She also supports infrastructure spending of the kind President Obama has proposed.
In addition, Romer urged the Fed to talk less about ending its monetary stimulus program--advice that at least one Fed official appears to disagree with--and to communicate more clearly to the markets about future rate hikes.
And she slammed the GOP for its unwillingness to raise the debt ceiling without major spending cuts. "Republicans talk a lot about the detrimental effects of uncertainty. I can think of nothing that is generating as much uncertainty these days as the fight over the debt ceiling."
This isn't the first time since leaving the White House that Romer, who was seen as one of Obama's more progressive advisers, has called for more action on jobs. "I frankly don't understand why policymakers aren't more worried about the suffering of real families," she said in a March public appearance. "I think there are tools we have that we can use, and I think it's shameful that we're not using them."
And she's hardly alone in responding to Friday's numbers with a call for more aggressive measures from Washington. "The May jobs report should have provided the sort of stiff kick that is needed to revive discussion of additional stimulus," Dean Baker, the co-director of the liberal Center for Economic and Policy Research, wrote today on The New Republic's website. "Instead, it seems to have barely shaken Washington's ongoing obsession with deficits." Baker concludes that we could be in a for "second Great Depression."
(Jose Luis Magana, File/AP)
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