I heard this on CNN this morning. In reference to the economic summit that Bush/Cheney are holding this week, Rick Sanchez, (who is becoming the biggest whip of any television news person. Ever), interviewed Steve Friedman, one of Bush's senior economic advisors. The conversation was a prime example of television interviewing without anything real actually being asked and of answering questions without ever actually saying anything of merit. The transcript is here.
But I have a question, and it is one that I think Brad DeLong is perfectly suited to answer, in regards to this segment of the interview.
SANCHEZ: But is there anybody -- here's what was described in most of the big newspapers, like the "Washington Post": "A hand-picked panel of business executives with close ties to the White House."
Is there anyone who's going to be at this conference who doesn't fit that description?
FRIEDMAN: Well, you know, I don't -- I don't think these are people who are -- who are -- who are short of a range of personal views, nor will they be shy about expressing them. So, I don't think any of the key issues will be -- that the economy faces will be off the table.
As I said, in the first panel, we already started hearing them. I think you do want to put this in the context that Marty Feldstein of Harvard did in his closing remarks.
Four years ago, when they had a summit in Waco, the economy was -- was in or moving into a recession, and -- and the president-elect was hearing some alarming things.
This year, we are in a -- in a very strong and positive economy that's moving forward, and it is now time -- we now have the wind at our backs and we can now face some of the longer term challenges that need to be dealt with to keep the economy strong in the decades ahead.
SANCHEZ: Everyone seems to be talking about the trade deficit. Make us understand why this is such a big concern and what our government is going to be doing about it. Because so many people have been saying that if we don't get that thing under wraps, then the dollar is going to be devalued and we're going to have some real serious problems.
Could you put that in perspective for us?
FRIEDMAN: Yes. I won't speak about the dollar, per se. The secretary of the treasury and the president are the only ones of the administration who talk about currencies.
But I will say that it's very, very important for us to increase our national savings. And that's something that the president has been very clear about. He wants to -- he wants to reduce the budget deficit, cut the deficit in half by 2009. That has -- has a direct impact on the trade deficit.
Ok, first off: The characterization of this economy, in comparison to the economy of four years ago, as positive and moving in the right direction seems grossly optimistic to me. Secondly: Doesn't starting off any discussion of trade deficits by saying, "Yes. I won't speak about the dollar, per se. The secretary of the treasury and the president are the only ones of the administration who talk about currencies," make the discussion moot? Aren't the declining dollar the the trade deficit unable to be separated? I'm not an economist, but maybe Brad, if he reads this, can shed some light.
Well, considering the dollar is down (to the point that tuition for study abroad students is now MORE than their US tuition--it has traditionally been less because of exchange rates) and the housing market is about to burst because of interest rates going up, and the increase in employment rates has due more to lower paying service jobs (read, Walmart) than white collar office jobs, yes, I would say his peception of the economy is a bit optimistic.
Posted by: Ty | December 15, 2004 at 01:28 PM