July 01, 2011
Marketplace radio had an interview with Larry Summers, formerly the head of President Obama’s National Economic Council. At one point the interviewer questioned Summers about whether he viewed the size of the stimulus as too small. Summers responded that while he felt the economy needed a bigger stimulus, he thought the stimulus was the biggest package that it was possible to get through Congress at the time.
It would have been appropriate to ask, if Summers held this view, why neither he nor President Obama made such a statement after the stimulus passed. If they knew that the stimulus was too small then it meant that the recovery would be weak and that unemployment would remain higher than necessary.
In such circumstances, it would have been reasonable for President Obama to take credit for passing a big stimulus, which was an important step for getting the economy back on track, but that it would likely be necessary for further measures.
Instead, President Obama quickly began touting the “green shoots of recovery” and focused on reducing the deficit. This has created a political environment in which further discussion of stimulus has become almost impossible politically.
This pattern of behavior is completely inconsistent with what Summers claims was his view of the state of the economy at the time. This would indicate that either President Obama ignored the head of his National Economic Council or that Summers is not accurately describing the advice he gave to Obama at the time.
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