Obama Tosses Chief Economic Advisor Under Bus

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LOS ANGELES TIMES: A White House official said the president would have “loved” for Austan  Goolsbee to stay. […] No president likes to lose a trusted confidante — a role Goolsbee played as campaign advisor and then as senior government official. But for Obama, the problem isn’t so much personnel as policy. Goolsbee’s departure comes as a recent spate of troubling economic news is sparking fears that a full recovery could be years away. Unemployment rose to 9.1% in May — its second consecutive monthly increase — and housing prices have dropped to their lowest level since 2002. Obama has few tools with which to create jobs on a scale that will reduce the unemployment rate. The Republican-controlled House won’t go along with ambitious new spending plans that might stoke hiring. The $800-billion-plus stimulus package has played itself out, and Congress is consumed by a debate over cutting federal deficits. MORE

RELATED:  The year 1980 was one in which economic forecasting models were in agreement that the economy had slumped too significantly to allow President Jimmy Carter to win re-election. Unemployment was at 7.5 percent and inflation was at 9.7 percent. Per-capita GDP and disposable income growth, adjusted for inflation, had been negative over the course of Mr. Carter’s term. The economy was officially in recession for much of the election year. But Mr. Carter — despite approval ratings in the 30s or low 40s — was holding his own against Ronald Reagan. Some polls, even well after Labor Day, showed the horse race to be tied or even had Mr. Carter with a slim lead. Mr. Reagan would win overwhelmingly, however, claiming 44 states (even Massachusetts and New York) while limiting Mr. Carter to just 41 percent of the vote. He surged in the final week of the campaign after he posed the following question to Americans in the presidential debate of October 28, the first and only such event in which he and Mr. Carter participated together: “Are you better off than you were four years ago?” Mr. Reagan asked, dwelling on Mr. Carter’s economic and foreign policy failures. Voters decided that they weren’t, and Mr. Reagan became the 40th president. MORE

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