KeithHennessey.com

Friday’s jobs report was good news because the bad news beat expectations, and because it signaled that things might turn around more quickly in the future. But the President is wrong – the U.S. economy is not yet pointed in the right direction.

Real GDP shrank at a 1.0 percent annual rate in the second quarter of this year.

Provoked by the Vice President’s comment on Sunday that the Administration “misread the economy,” the Obama Administration is partway through an unplanned shift in their topline economic message. It’s hard to reconcile a “stay the course” strategy with (a) new bad data, (b) “we misread the economy” and (c) “we had incomplete information.”

The Vice President says that “we and everyone else misread the economy,” and that “no one anticipated, no one expected that that recovery package would in fact be in a position at this point of having to distribute the bulk of money.” This is inaccurate.

I want to propose a four-part test for measuring any particular bill on health care cost control.

short run

long run

Federal deficit

1

2

Government health care spending

X

3

Private health care spending

X

4

In each case, I will define the test so that “yes” is a good outcome:
Test 1:  The bill does not increase the federal deficit in the short run.
Test 2:  The [...]

This morning on Fox News Sunday, host Chris Wallace moderated a discussion about the auto industry.  One of his guests was Dr. Austan Goolsbee, who is a Member of President Obama’s Council of Economic Advisers and chief economist on the President’s Economic Recovery Advisory Board.
I want to focus on some incorrect and inflammatory statements by [...]

This is the second in a series of occasional posts about the nitty gritty of working in the West Wing of the White House.  I am describing things as they were in the Bush Administration.  YMMV in the Obama Administration.  Again, it seems a bit silly to write about such trivial details, but given the [...]

I began this blog at the end of March after the stimulus bill had become law.  I had been struck by how much the stimulus debate had focused on whether the bill was efficient.  (It clearly was not.)  There was much less discussion of whether the stimulus would be effective, and of the timing of [...]

Many of you are new to this blog since I wrote extensively about autos six weeks ago.  As background, I coordinated the auto loan process for President Bush last fall as the Director of the White House National Economic Council (the position now held by Dr. Lawrence Summers).  I wrote a series of posts on [...]

I wrote last Friday about the China/India hole in the American climate strategy:
America appears to lack a high-probability strategy for how to get China, India, and Russia to agree to self-impose a significant positive carbon price.
The Administration and its Congressional allies are trying to impose a significant carbon price in the U.S. through something like [...]