Cutting Through The Crap

Monday, October 29, 2012

Romney's Economic Guru



It's a guy named Glenn Hubbard, George Bush's key adviser as well. Famous for getting everything entirely wrong, economy-wise. Or unwise.

 On August 22, 2001, he published anarticle in the Wall Street Journal entitled "Tax Cuts Won't Hurt the Surplus." Oops. In the article, also, Hubbard predicts that his tax cuts would preserve the Clinton budget surpluses by causing GNP to grow 0.3 percent per year faster.
[...]
... Hubbard wrote that "The ascendancy of the U.S. capital markets" had yielded "enhanced stability of the U.S. banking system... more jobs and higher wages... less frequent and milder [recessions}... a revolution in housing finance." Later in the article: "The capital markets have helped make the housing market less volatile... " Next, "Credit crunches... are a thing of the past... " and my personal favorite, "The revolution in housing finance has also... been important in making the economy less cyclical." In other parts of the article, Hubbard and Dudley specifically praise credit default swaps for their role in reducing and spreading risk. (emphasis mine, in case anyone missed the significance!)

There've been conflict-of-interest issues, too:

... On his CV, Hubbard lists The Analysis Group as a consulting client. That is misleading at best. The Analysis Group is one of a half dozen major firms that specializes in matching private companies and lobbying groups, who are the real clients, with professors who they pay to support their positions in regulatory, policy, Congressional, and legal disputes. It was The Analysis Group, for example, that arranged for Hubbard to testify on behalf of two Bear Stearns hedge fund managers who were prosecuted for securities fraud in 2009. Hubbard was paid $100,000 for his testimony.
Oh, yeah, and here's a bit on another of Mitt's economic powerhouses, dubbed "the world's worst economist." (Among Romney's guri, that's gotta be some competition.)

Prior even to “Dow 36000″ Hassett had co-authored a paper exploring the question of what to do with Clinton’s budget surplus making the implied case that the best option was to use it to pay for tax cuts. There wasn’t enough to fix Social Security for good, he argued, and Clinton’s proposals to invest at least half the surplus in initiatives in “health, education, childcare, transportation, school construction and the environment do not appear to contain meaningful cost-benefit analysis.” 
Excerpts from Hassett’s 2001 testimony make for amusing reading today. President Bush’s “relatively cautious” plan would dedicate about half of the surplus to tax relief. But no worries about damaging the fiscal integrity of the U.S. government — according to Hassett, the surplus was likely to grow even faster than currently predicted, even if a recession came to pass. 


How is it that anyone (much less that Iowa newspaper) could claim Romney would be better for the economy? The economy which is clearly, if slowly, recovering under Obama, and the plans for which espoused by Romney 1) don't add up by any known math and 2) are exactly those that caused the crash in the first place and 3) if enacted would devastate domestic spending. Really? On what planet? (Oh yeah, the one of which Mitt will be king when he dies.)

Phew. Got that out there just in time. With facts like these...


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