Math and Job Creation

Christina Romer has a PhD in economics from MIT and has been a professor at Princeton and then MIT before agreeing to serve as the head of Barack Obama’s Council of Economic Advisers. She’s one of the foremost authorities on the Great Depression. Lawrence Summers got tenure as an economics professor at Harvard when he was 28; he’s served as chief economist at the World Bank and as Secretary of Treausury and now he’ll be heading the National Economic Council. Paul Krugman just won a Nobel Prize in economics. These and other people approve of Obama’s plans for a deficit-financed job-creating stimulus package.

Under the circumstances, I really don’t understand how Bloomberg thinks it’s credible to run a Caroline Baum column titled “Obama’s Job-Creation Program Flunks Basic Math”. Brilliant and well-qualified people can be wrong about stuff, but surely Obama’s team knows “basic math.” They know advanced math! To claim otherwise is almost offensive to the reading public.

Meanwhile, her argument concludes with some paragraphs that might be plausible if you’ve been asleep for the past eight (or perhaps I should say 28) years:

It’s said, or used to be said, that government’s role is to create an environment that encourages private job creation. That used to mean a backdrop of low taxes and light regulation.

With the public clamoring for more stringent rules to prevent a recurrence of the current crisis, it doesn’t seem as if a business-friendly backdrop is even on the table.

Maybe that’s why the government has to do the private sector’s work.

Seriously? We’re in this current crisis because recent policy has been insufficiently business-friendly? Who thinks that?