Chatting with a former blogger: Jared Bernstein, Chief Economist for the Vice President

(noon. – promoted by ek hornbeck)

Just a little while ago, the White House held a ‘progressive media and bloggers teleconference’ with Jared Bernstein, Chief Economist for the Vice President.  As a quick reminder, Jared is one of the bloggers that have become “former bloggers” by transitioning into the Obama Administration.

Not surprisingly, Bernstein’s call focused on the American Recovery and Reinvestment Plan, which has just passed through the Conference Committee as a $789 billion package, incorporating some of the good ideas from the White House and the House, and the bad ideas from the Senate.

NOTE:  The Bernstein photo is from a Drinking Liberally event …

When it comes to things from the House bill that were left out from the overall bill, like school construction, my question:  “While aware of the need to pass this bill, we should recognize that many high-value elements of the House bill were stripped in the conference committee. Are you already looking ahead, working on trying to get these good elements passed.”  To that, Bernstein had this comment:

My understanding from conversations with some of the opponents were not they were against things like school construction, but that they did not feel it appropriate such long-term projects should be in a stimulus package.

Clearly, one speaking from the Administration needs to be cautious and aware of the politics.  In this case, that sort of money would have had real stimulative impact, enabling public school systems to pursue construction and renovation projects (and, hopefully, green schools) that they are currently putting on hold to cut current expenses (e.g., to shed jobs as well).

But, Bernstein suggested that there can be reason for hope:

My view is that no windows are closed in this regard.

And, in response to a later question pushing on family planning funding and the economic value of this.

I am not specifying any particular element in terms of funding.  Some of the things came out of the plan because people had a reasonable argument that the programs didn’t fit into a stimulus package.  But, without speaking to a specific program, we will be revisiting good ideas that did not get funded to see what should be put forward.

To begin the call, Bernstein laid out the urgency of the situation:

• January 2009: 600,000 jobs lost, the worst in over 3 decades
• Nov and Dec 08 were almost as bad
• Nov 08 through Jan 09: nearly 2 million jobs lost
• There is a very serious acceleration of job losses.

We all (or should) know this, that the situation is quite serious. But, as Jared said, “such numbers seem antiseptic” and then talked to the reality of people facing real struggles in the real world.  “There were lots of middle class families struggling when the economy was expanding, now it is contracting.”

He emphasized, to answer the right, it seems, that “90 percent of the jobs will be created in the private sector”.

—–

One question (Jonathan Singer, MyDD?) turned to the issue of the bank bailout, whether the stimulus package could be effective without the bank bailout also moving forward.

Bernstein:

Absolutely, the stimulus package will help in the way that I said … its nto rocket science … If you put out a contract for repairing a bridge, it will create jobs.

The issue is the multiplier effect, the full potential impact of the stimulus for improving the economy can’t take hold if credit isn’t flowing.  

To use a medical analogy, the Recovery Act gets the heart beating again. The bank bill will clean out the arteries.

John Aravosis

asked a question focused on how salary limits when it comes to tax cuts works when it comes to quite expensive areas, like New York, where the average cost of living (and salaries) might be far different.

Bernstein Answer:  

Very interesting question, but there is no rigorous, BLS-blessed metric for the cost-of-living differentials between differing areas.  But, I could see this being a valuable thing to look to do for Government programs going into the future.  … I looked at this when I was in the think tank world, have to be clear, however, that I am no longer in the think tank world …

Oh, the painful transition from free-thinking academe to governance.

A comment responding to MB

Meteor Blades (DKos) asked a question of me:

what’s your take on how well green infrastructure did in the ARRA? Is the total anywhere near what is needed, in your view?

Well, MB, to start with, haven’t seen the package that came out of the conference committee but, based on the limited reporting (and Bernstein’s comments), I am not holding my breath in expectation on being thrilled with the results. The AMT tax adjustment ($70 billion) stayed in, with the overall bill being cut in cost. That meant needing to “find” funding to pay for those increased tax cuts. Thus, cuts to help to local government and elimination of funding for schools.

In addition, more importantly, the original House bill was inadequate without enough focus on paths to stimulate the economy today that would also strengthen the economy into the future, while cutting our fossil fuel addiction, helping cut global warming emissions, and strengthen our social fabric.  Even the House bill fell far short of what could (and should) have been.  Compromising away from that bill to the “moderates” in the Senate?  Sigh …

Now, hopefully the Administration (President Obama) has learned a quick (very expensive!) lesson:  don’t go to the table already compromising. Make the other side do something to earn your compromise.  Thus, perhaps the original bill should have had five percent tax cuts with Obama ‘willing’ to compromise to 20 or 25 percent.  Then, when the R House members didn’t vote for the bill, President Obama could have said: “I gave them $150 billion and they still won’t vote for it. They lost the election and they seek to roadblock dealing with this crisis.” Again, hopefully, this is a lesson learned. Don’t we all wish that it didn’t cost some $300 or so billion in tax cuts (actually, tax increases on the unborn) to drive that lesson home?

A concluding thought …

This was a quality call, with quality questions. (Unlike what a Washington Post reporter might have done, no one asked “what are the economic impacts of professional baseball steriod use?”) Like President Obama calling on a journalist from the Huffington Post in press conference, this call is a clear indication that the Obama White House recognizes that “traditional media” doesn’t, necessarily, translate to “mainstream media”.  Speaking with online journalists and bloggers will be, it seems clear, part of how the Obama Administration will communicate with the American people.

PS:  Baratunde at Jack & Jill Politics did a better job capturing the Q&A.