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Former Obama adviser Austan Goolsbee explains why the economy hasn't bounced back the way White House officials hoped
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President Obama's made lots of promises about the economy he promised to cut the deficit half and he said the stimulus would keep the unemployment rate below 8%.
But right now the unemployment rate is eight point 3% and the US is facing crushing debt so why isn't the economy doing better.
Austan Goolsbee is a former chairman of president Obama's -- of economic advisors he joins us -- see Austin.
-- -- -- -- Okay Austin hot what do you ditto if you weren't charged heavily wrapped up the economy to get -- more aggressive more robust what would you like to them.
Well that what we have to do as an economy and it's not something -- driven by watching it's gotta be driven by the private sector.
You got to shift.
From building houses.
And consuming more than we're learning which is what drove the growth in the two thousands we gotta have more.
Manufacturing got to have more exports got to have more investment stuff that's sustainable so.
There are a number of policies in each of those areas that that you pursue but the fact is anybody who has the issue of what they're doing it's always a long tough process.
Now we know we did know that I mean if you look at the of forecasts made by this GA in the fall of 2009.
After the initial.
Really beginning of what could have been a depression added after we gotten through that the forecast three years ago for what the unemployment rate would be now.
Was eight point 2%.
And it you know they're definitely all of 2012 so I mean the we are progressing at about the speed it was expected three years ago it's just that's a slow.
Pull out of a deep downturn.
Which is what when I say get I -- -- -- would not I know that dead people quibble I ghetto where the president and then within a Viennese causes a more conservative hot how league.
Get to the next step probably do better I'm curious let me just identified a manufactured.
How do we improve or increase manufacturing this country in light of the fact.
That that he can buy things cheaper other places and other countries in hot how do you know how you reconcile that why would anyone want to build anything in this country if -- get -- if a consumer can buy.
Cheaper someplace else.
Well look I think that's a great question and that thing it's not well understood by people when they look and they say what -- Somebody in China makes you -- five bucks a day or something that why why are they gonna ever make something the US.
He had -- remember.
Our workers are the most productive in the world by far the US is probably has never -- -- a problem of quality.
Our problem has been other countries had half the productivity we had.
But at 15 the price so what has happened is number one we got more productive.
Number two a lot of those places have come up from the really the basement floor of wages that they used to have.
And number three we have good rule of law unenforceable property rights on intellectual property -- -- you don't have to worry about.
People stealing your blueprints and stealing your stuff.
And so you've seen in the last two years although the job -- has been pretty tough overall.
Manufacturing is actually had its best two years and in several decades.
And so I think.
We are all heading the right way and a lot of sectors they are recovering.
It's just that it's a tough process.
Shift things did -- direction of what the economy's doing -- as I want to emphasize.
That's not primarily driven by Washington DC I mean that's got to be driven by the private sector.
Well except that that when -- this little more commented that yes -- -- we -- by the private sector but the private sector adds to the freedom to be the private sector without being for instance over regulated mean there are.
Other questions about that it does require the Washington leadership a lot of but Clinton and I don't I -- manufactured -- is -- read a simple question though is that.
Is that it still remains a promising to buy -- cheaper someplace that's just not gonna build it here.
And that mean that is a fact knowing when asked is there really isn't good.
-- -- -- Ask yourself the what is worse okay so it's cheaper they ship it over here it's cheaper but it's no good the fact is we we have.
Up pretty high level of demand our exports have been growing on a path.
To double about every five to six years over the last couple years here.
It's what we should have been doing in the 2000.
To a lot of that nations we compete against -- doing they're growing their exports ever growing their investment.
And we work it so what we got to shifted to doing that.
I want OK let me -- -- to Germany which is the -- most robust economy.
In Europe.
You Germany is now begin to feel the pain from its relationship with -- all the other countries so mean.
Even a successful in manufacturing company is now -- in the -- what the world is Germany going to do in light of its problems because their problems eventually become our -- infect us.
Yeah look look at you you're on to something here Greta because they -- that problems of Europe.
Are really deep seeded and they really go back to the formation of the Euro itself.
So they're locked in a currency that I think Germany is going -- Eventually have to choose either they're going to subsidize to hold the thing together or else is gonna blow itself apart.
Now the ironic thing is that as much as we're struggling to get out of the doldrums.
In the US.
We actually have the highest growth rate of all the advanced world so that was.
For people saying.
They think it has to do with policy or anything specific to the United States why the growth rate isn't higher.
I think that challenge for those people is to explain why isn't it.
Modest growth rate in the US above the growth rate in Germany in the UK and Japan a bunch of places where there following policies that are totally different.
Then following his -- and our growth rate this last quarter was this there was one point 5% since -- -- not -- -- bragging rights on ours.
Hostin thank you hope your comeback this enormously complicated very hard all hooked up ended down market yes thank you Austin we mid westerners got to stick together -- -- and --
