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Black Helicopters Hover Over Economic Reality

by Caroline Baum, Bloomberg, February 8th 2012 -

Maybe it’s inevitable that politics play a role in economic policy. After all, the two disciplines were pretty much intertwined until the 20th century.

Today, political economy has taken on a whole new meaning. Perhaps “politicized economy” would be a more accurate description.

Some of the politicization is natural and understandable: Political philosophies dictate economic preferences and vice versa.

Much of it is over the top. Today, politics infect everything from the analysis of economic reports to the interpretation of Clint Eastwood’s “Halftime in America” Super Bowl commercial for Chrysler. Here are the categories I’ve assigned to reflect the four degrees of politicization:
No. 1: I Think, Therefore I Am

It’s natural for a president to appoint advisers who share his views on government’s role in the economy. For example, if you believe that the cure for a weak economy is more government borrowing and spending — if you are a Keynesian — you might be tapped as an economic adviser for President Barack Obama.

Alternatively, if your beliefs run to laissez-faire capitalism (no longer an oxymoron) and market-based solutions, you were probably last employed in the Reagan administration.

Once an economist becomes a top presidential economic adviser, she becomes a political tool, sacrificing both her objectivity and credibility in the process. Berkeley economist Christina Romer, Obama’s first chairman of the Council of Economic Advisers, may be a respected researcher, but to me she will always be Ms. “Jobs Created or Saved.” Romer was trotted out quarterly to justify the cost of the administration’s 2009 fiscal stimulus, currently estimated at $825 billion. Talk about pulling numbers out of a hat.

No. 2: Sour Grapes

If the foregoing reflects the inadvertent politicization of economics, what follows is intentional, pure and simple.

Last Friday, the Bureau of Labor Statistics reported a 243,000 increase in January non-farm jobs (257,000 in the private sector) and a decline in the unemployment rate to a three-year low of 8.3 percent. The internals of the report — hours worked, wages, breadth of job creation — were positive, as well.

Republicans, hoping to run in November against Obama’s lousy economic record, would prefer a rising jobless rate to a declining one, which historically has been a good credential for re-election.

“Anemic growth is not growth,” said former House Speaker and Republican presidential hopeful Newt Gingrich, responding to the report. “I believe the economy will begin to recover the day Barack Obama is voted out of office.”

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