Biden: We Blew It On The Economy

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Joe Biden told “This Week” that the Obama administration “misread how bad the economy was.” 

He also the administration made this mistake because they just looked at the consensus forecasts at the time…and they proved to be wrong.

If the latter is true, the administration deserves the crap it has been getting.  In the months leading up to Obama’s inauguration, the economy fell off a cliff.  The credit markets seized up.  Several major investment banks went bust.  The Fed and Treasury talked of an apocalypse.  Everywhere you looked, you heard one analyst after another saying the country was plunging toward another Great Depression.

If anything, the economy since the inauguration has been better than many analysts feared.  So this “we didn’t get it” sounds like revisionist history to us. 

More likely, in our opinon, the administration concluded that it would never get its huge spending increases passed if its projections reflected the “most likely” scenario for the economy.  And so it produced the economic forecasts (growth, stress tests, jobs, etc) that have begun to destroy Obama’s credibility on this critical issue.

Regardless of the thinking behind the over-optimism, Obama has made a serious error here.  Recovering from financial disasters like this usually takes years–and it likely will this time, too, regardless of what Obama does. 

Above all else on the economy, Obama had to under-promise and over-deliver.  By promising a relatively swift recovery, he has set himself up for failure.  If the economy does recover, he’ll be fine, but if it doesn’t (which seems more likely), he will increasingly be blamed for failing to fix it.  And given the singular importance of this issue to most Americans right now, it is hard to see how his presidency will survive that.

WASHINGTON (AP) — Vice President Joe Biden said the Obama administration “misread how bad the economy was” but stands by its stimulus package and believes the plan will create more jobs as the pace of its spending picks up.

Biden, in an interview airing Sunday on TV network ABC’s “This Week,” said the nation’s 9.5 per cent unemployment rate is “much too high.”

“The figures we worked off of in January were the consensus figures and most of the blue chip indexes out there,” Biden said.

“We misread how bad the economy was, but we are now only about 120 days into the recovery package,” Biden added. More jobs will be created in coming months, he said.

Biden noted that the $787 billion economic stimulus package was set up to spend the money over 18 months. Major programs will take effect in September, including $7.5 billion for broadband Internet service, plus new money for high-speed rail and the nation’s electrical grid, he said.

Biden said it was premature to say whether the country would need a second stimulus package.

On other issues:

— Biden, asked whether the United States would put the lives of U.S. troops on the line should violence flare up again in Iraq, said “no.” The U.S. still plans to withdraw all troops by 2011, Biden said. “That is the intention,” he said. “We believe the Iraqis will be fully capable of maintaining their own security.”

— Biden said if the Iranian government seeks to engage in a dialogue with the United States, the U.S. will engage. “If the Iranians respond to the offer of engagement, we will engage,” Biden said. “The offer’s on the table.”

— Biden said Israel has the right to pursue a different course of action on Iran than the U.S. does. “Look, Israel can determine for itself — it’s a sovereign nation — what’s in their interest and what they decide to do relative to Iran and anyone else.”

— On North Korea’s Saturday launch of more missiles, he said “the question is, is there anything that we should do about it?”

“Look, this has almost become predictable behaviour,” Biden said. “Some of it seems like almost attention-seeking behaviour.” The U.S. shouldn’t give North Korea the attention, he said, adding that the U.S. policy has been correct so far.

“We have succeeded in uniting the most important and critical countries to North Korea on a common path of further isolating North Korea,” Biden said.

— The Obama administration is “well on the way” to resolving a dispute between CIA Director Leon Panetta and National Intelligence Director Dennis Blair, Biden said. The conflict centres on Blair’s effort to choose his own representatives at U.S. embassies instead of relying only on CIA station chiefs. “They both won,” Biden said. He declined to give details, saying the resolution was not yet complete.

— Biden said he respected Alaska Gov. Sarah Palin’s decision to step down. “It maybe had a lot to do with what the state of their life was, and the state of their family, et cetera,” Biden said. “So I’m not going to second-guess her.”

Vice President Joe Biden:

ABC’s “This Week”:

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