As the Obama administration's "Recovery Summer" crumbles, CBS's Early
Show on Thursday noted how the poor economic data has made many
Americans deeply pessimistic about the future, with 37% saying that the
economy "is in permanent decline."
So does that mean Obama's $862 billion stimulus is a failure? Not
according to economist Mark Zandi, who was interviewed by co-host Erica
Hill. Zandi asserted that "the recession ended about a year ago, in
large part because of the stimulus efforts," and the current
sluggishness was because "the stimulus is now fading," and thus "the
benefit to growth is winding down."
Of course, Zandi has been a consistent enthusiast for the stimulus,
as far back as early 2009, a fact which was not disclosed today. "We
need stimulus," Zandi championed on the January 28, 2009 Early Show.
"It's about preserving jobs."
After President Obama signed the behemoth spending bill, Zandi was
back on the February 18, 2009 Early Show: "It`s a reasonably good
plan....The fact that policymakers are working really hard here, I
think, is a reason for some optimism."
Viewers might have benefitted if CBS had paired Zandi with an
economist who sees the data differently (for example, the Heritage
Foundation's Brian Riedl put out a good report last week [1]
on why rampant federal spending risks destroying the economy). On the
flip side, Zandi did argue against the Obama administration's scheme to
raise taxes in January, saying that while it would be "reasonable" to do
so in later years, the economic recovery is now too "fragile" to
withstand such an action.
Here's more of how the August 26 Early Show covered the economy:
# Report from correspondent Rebecca Jarvis, headline: "Economic Woes"
REBECCA JARVIS: From housing to jobs to the health of the U.S. consumer, the latest economic data has slowed significantly, and it's having an impact on how Americans feel about the recovery. According to the most recent CBS News poll, over one-third of Americans, or 37%, think the decline is here to stay.
# Interview with Mark Zandi
ERICA HILL: There's so much focus on the Obama administration, on what was done on the stimulus package. How much of what we're seeing in the economy right now is a direct result of the administration's policies and of the stimulus?
MARK ZANDI: Well, it is related. I think it's fair to say the recession ended about a year ago, in large part because of the stimulus efforts. I don't think it's any coincidence that the recession ended as the stimulus provided its maximum benefit to the economy. But, the stimulus is now fading - the housing tax credits being part of that stimulus, as an example - and so the impetus to growth, the benefit to growth is winding down, and that's one of the reasons why the economy is slowing.
HILL: So, would that be a case then, as you see the economy slowing, to extend those Bush tax cuts which we're hearing so much about, and which has really become important as we move forward to the elections in November?
ZANDI: Yeah, good point. I mean, I don't think it would be wise to raise taxes for anyone in 2011 when the economic recovery is so fragile. Now, the President has proposed raising tax rates back to where they were [in the Clinton years] for people who make over $250,000 a year on a joint basis - that's a very wealthy group, about three percent of the population. I think that's reasonable, but only in 2012, 13, 14 - when the economy's off and running. I wouldn't do it in 2011 when the recovery is so weak.
-Rich Noyes is Research Director at the Media Research Center. You can follow him on Twitter here [2].