Former Top Obama Adviser Christina Romer: A Weaker Dollar Is Good For America

Yahoo Finance ^ | 04/07/2011 | Aaron Task, Daily Ticker

[SeekAndFind]

Frustrated by "the suffering of real families," President Obama's former top economic adviser recently called for action: "If I have a complaint about policy these days, it's that we're not doing enough," Christina Romer said in a speech last month at Vanderbilt University. "I think there are tools we have tools we have that we can use, and I think it's shameful that we're not using them."

With unemployment still near 9% and the "real" unemployment rate at 15.7%, "we can't afford not to do more," Romer tells me in the accompanying video. "For heaven's sake with this many people unemployed — think of what it's doing to government revenues and support payments. If all you're worried about is the budget deficit, it's really important" to put people back to work.

In terms of specific policies, Romer recommends a payroll tax holiday for corporations - rather than workers. Because "firms respond to incentives", making it less expensive would encourage them to do more hiring.

Romer also wants more action from the Fed to boost the economy and financial markets.

"What I'd like is for the Fed to come at the unemployment problem with the same passion as when the financial system was in such distress," she says.

It's a "mistake" for the Fed to end QE2 in June as planned, Romer continues. "The evidence is it's been very effective. I don't understand why we'd be dialing back that tool."

Despite the recent rise in Treasury rates, QE has been effective at lowering long-term rates, she says, citing academic research such as report from the NY Fed entitled: Large-Scale Asset Purchases Were Effective at Lowering Borrowing Rates.

Lower rates encourage corporations to make investments and individuals to borrow, "which tends to encourage spending which puts people back to work," Romer says.

[dila813]

You know, it is bad enough, maybe there should be an entire forum devoted to helping us survive through the inflation that is coming down the pipe.

We are going to need each other more than ever.

[who knows what evil?]

Red...someone to be added to the gardening ‘ping’ list, please...

[who knows what evil?]

I have asked the garden moderator to add you...the new thread will go up tomorrow morning. When it does, post every question you have, and you will have more help than you can handle. The garden posters are awesome...I have never seen a question someone somewhere doesn’t have the answer for...

[who knows what evil?]

You have been added to the ‘Weekly Gardening’ ping list...you should have received a ‘ping’ already...join in!

[PSYCHO-FREEP]

Good Gawd!

Where do they find these idiots!

[GOPJ]

A weaker dollar also means EVERYTHING we buy from overseas costs more. But the elites don’t care about that - they’re buying from cute little boutiques ... it’s the middle class that will be hit hard with inflation.