Former WH economist: Unemployment won't drop below 8% before 2013

Remember Jared Bernstein?  Barack Obama brought him on board the transition team as one of his economic advisers, which produced the stimulus proposal asking for $775 billion in order to keep joblessness below 8%.  In fact, that prediction reportedly came from Bernstein himself.  CNS News caught up with Bernstein yesterday, who admits that perhaps that prediction wasn’t very good:

The White House economic adviser who determined in 2009 that if President Barack Obama’s stimulus bill were passed unemployment would not go above 8 percent, now says he was wrong and that he does not think unemployment will go below 8 percent before the end of 2012–the last year of the four-year Obama won in 2008. …

“Look, we made that projection back in 2008 at a time when the most recent information about the economy was that it was contracting at a rate of less than 1 percent,” Bernstein said. “At the time, we simply didn’t have good information. We now know with revised data that in the very quarter where we made that wrong projection, the economy was contracting at almost 9 percent.”

“So the statistics were way off at the time,” Bernstein continued. “It’s also the case that that forecast that we gave back then was the consensus forecast of the economics community. I mean, it wasn’t just that we were wrong. Everyone was wrong. And I think it’s largely because we just didn’t have a clear picture yet of how bad this recession actually was going to be.”

Seriously? That report got published in January, not October. The collapse of the economy was not just well-known, it was used by the incoming Obama administration to demand nearly $800 billion in emergency spending. The White House certainly knew that the US was losing 700,000 jobs a month, not the kind of job destruction one finds in a -1.0% GDP quarter. Anyone who didn’t recognize by January that we were in a deep hole has no credibility on economic projections at all.

The belated admission that their joblessness projections, which were hardly corrected in the White House’s political arguments, won’t help Obama make an argument for economic stewardship. However, that’s been obvious during the last 30 months with or without Bernstein’s confession.