Monday, January 23, 2012

Jim Pethokoukis alerts us to the stunning release of a confidential memo sent to Barack Obama by senior economic adviser Larry Summers on December 15, 2008.

Pethokoukis: Secret 2008 Memo to Barack Obama reveals White House knew Stimulus was a partisan scam - Doug Ross

11 stunning revelations from Larry Summers’s secret economics memo to Barack Obama - The Enterprise Blog

A lengthy piece in The New Yorker looks at policymaking in the Obama White House. A key source for writer Ryan Lizza is a 57-page, “Sensitive & Confidential” memo written by economist Larry Summers—eventually to be head of Obama’s National Economic Council—to Obama in December 2008.
1. The stimulus was about implementing the Obama agenda.
The short-run economic imperative was to identify as many campaign promises or high priority items that would spend out quickly and be inherently temporary. … The stimulus package is a key tool for advancing clean energy goals and fulfilling a number of campaign commitments.
2. Team Obama knows these deficits are dangerous (although it has offered no long-term plan to deal with them).
Closing the gap between what the campaign proposed and the estimates of the campaign offsets would require scaling back proposals by about $100 billion annually or adding new offsets totaling the same. Even this, however, would leave an average deficit over the next decade that would be worse than any post-World War II decade. This would be entirely unsustainable and could cause serious economic problems in the both the short run and the long run.... more at the link
The Obama Memos - The making of a post-post-partisan Presidency - New Yorker