Hello! How are you? I'm doing fine here in Pittsburgh. We didn't have a crash in Western Pennsylvania because we're always economically depressed here—how would we know the difference? I certainly hope your family is settled in and doing well there in the White House.
I heard you on the radio last Friday during your live press conference. You didn't sound good, let me tell you. All that Change We Can Believe In seems to have been replaced with long, rambling, unsatisfactory responses to unanswerable questions about very high, sustained unemployment and other disasters.
But it's not too late to change course, as I will explain below. You'll never succeed politically—get used to it!—but at least you can leave office in 2013 with your dignity and reputation intact, not to mention your conscience. As it stands now, you will be regarded by future historians as among the worst presidents we've ever had, and they will be right in arriving at that judgment. Surely, that shouldn't be acceptable to you!
Right from the start of your administration, you demonstrated that you had no clue about the depth of the economic crisis facing America. You did that by hiring the same clowns who fostered today's disaster in the 1990s when they were working for Bill Clinton. These Friends of Bob Rubin, people like Larry Summers, who is the unholy spawn of the Prince of Darkness, were never going to admit that it was their policies—pushing financial deregulation and home ownership to enable the Wall Street takeover—that got us into today's mess.
And then you rehired Ben Bernanke, who as far as I can see, or any other observer who is not brain dead can see, has never been right about anything. To this day, Ben will not admit that there was a Housing Bubble! That should tell you something right there.
The real problem is that you live inside what I call the Washington Bubble. It's as though there is a real plexiglass enclosure surrounding that insane, corrupt town—your buddy Rahm calls it fucknutsville. And most of the people you call to public service also live inside the plexiglass, or worse, they are from Wall Street. Don't do that! Stop hiring those people, they're flushing you down the toilet just like they flushed the rest of us. Get rid of them!
A recent example should suffice to bring this home to you. You just hired Austan Goolsbee to be the new head of your Council of Economic Advisers. The chief qualification of this political hack long-term political adviser to the Democrats appears to be his ability to field questions on ABC's This Week or Fox News Sunday—
During an earlier appearance on "Fox News Sunday," Goolsebee said when Vice President Joe Biden coined the term "Summer of Recovery", he was referring to the projects that would be created this summer, rather than the actual progress gained.
"The vice president was talking about the Summer of Recovery in reference to the recovery act, that you would see the creation of a series of infrastructure and other projects ramping up over the summer, and you did see that," Goolsbee said on Fox News Sunday.
Republicans have repeatedly tried to use the phrase against Democrats, pointing to the continued job losses and weak economic growth. Democrats have acknowledged there is much work to be done, but point to gains in private-sector jobs and other indicators.
Lame excuses do you no credit, Mr. President. And then there was this abomination—
Goolsbee also blamed the financial crisis in Europe for stunting the nation's economic progress.
This explanation, of course, is utter bullshit. The only other place I've heard this inexcusable, self-serving nonsense tentative theory was from Treasury officials, including Tim Geithner, a former protégé of Bob Rubin who you hired, when they recently met with a select group of bloggers. I'm sure you've heard this crap from Geithner across the table inside the White House, and now Goolsbee is spreading this manure in the vain hope that we'll see some green shoots soon.
In short, the main problem is that you surrounded yourself with Washington Insiders, or Wall Street bankers, who had their own corrupt agendas. It's time to toss out the power-crazed ass-kissers and liars. They weren't straight with you, and you weren't straight with us. And what was it they didn't, or couldn't, tell you?
Summers, Geithner, Romer and now Goolsbee did not tell you that our economic troubles are structural in nature. Rather than explain it myself, I'll let Harvard economist Ken Rogoff do it—
Little wonder that, with mid-term congressional elections coming in November, Americans are angrily asking why the government’s hyper-aggressive stimulus policies have not turned things around. What more, if anything, can be done?
The honest answer – but one that few voters want to hear – is that there is no magic bullet. It took more than a decade to dig today’s hole, and climbing out of it will take a while, too. As Carmen Reinhart and I warned in our 2009 book on the 800-year history of financial crises (with the ironic title “This Time is Different”), slow, protracted recovery with sustained high unemployment is the norm in the aftermath of a deep financial crisis.
Why is it so tough to boost employment rapidly after a financial crisis? One reason, of course, is that the financial system takes time to heal – and thus for credit to begin flowing properly again. Pumping vast taxpayer funds into financial behemoths does not solve the deeper problem of deflating an overleveraged society. Americans borrowed and shopped until they were blue in the face, thinking that an ever-rising housing price market would wash away all financial sins. The rest of the world poured money into the US, making it seem as if life was one big free lunch.
Even now, many Americans believe that the simple solution to the nation’s problem is just to cut taxes and goose up private consumption. Cutting taxes is certainly not bad in principle, especially for supporting long-term investment and growth. But there are several problems with the gospel of lower taxes.
First, total public-sector debt (including state and local debt) is already nearing the 119%-of-GDP peak reached after World War II. Some argue passionately that now is no time to worry about future debt problems, but, in my view, any realistic assessment of the medium-term risks does not permit us simply to dismiss such concerns.
A second problem with tax cuts is that they might well have only a limited impact on demand in the short run, with the private sector hoarding a significant share of the funds to repair badly over-leveraged balance sheets.
Last but not least, there is a fairness issue. By some measures, nearly half of all Americans do not pay any income tax already, so cutting taxes skews an already very unequal income distribution. Deferred maintenance on income equality is one of many imbalances that built up in the US economy during the pre-crisis boom. If allowed to fester, the political consequences could be severe, including trade protectionism and perhaps even social unrest...
Mr. President, there's a lot more where that came from, and we can't cover everything we need to in a short letter—Rome wasn't built in a day!
The bottom line is this: when it came time to hire a new head of the Council of Economic Advisers, you should have hired Ken Rogoff or someone like him, not Austan Goolsbee. And why not? He's soft spoken, smart, admittedly a bit of a nerd, but he won't embarrass you in public. And most importantly, Rogoff lives in Boston, not inside the plexiglass Washington Bubble. Your main problems with Ken would be that he might not accept the job, or he might quit after a short while because he can't stand the smell.
You might object that Ken Rogoff does not know the rules of the Washington Game. You're right—he doesn't! That perceived weakness is his greatest strength. He would tell you the truth, and it would be your job to relay that truth to all Americans. One would have thought that was your job all along.
If you're concerned with losing politically, don't worry about it. You've already lost, you've got nothing to lose, you're already fucked! More than ever, Mr. President, it's time to level with the American people. It's time to Go Big Or Go Home. After all, you can't do any worse at this point.
Thanks for taking time out of your busy schedule to read this.
Sincerely,
Dave Cohen
Pittsburgh, Pennsylvania
Hah, the signoff reminded me of Leonard Cohen's song, Famous Blue Raincoat. It ends, "Sincerely, L. Cohen". I wonder if it could be altered to be more appropriate to the decline of the empire.
Any lyricists out there?
[By the way, I spotted a typo: "Lames excuses".]
Posted by: Tony | 09/13/2010 at 05:30 PM