Much to the amusement of the conservative blogosphere, Austan Goolsbee, the former Economics Advisor to President Obama whose name sounds as if it belongs to a Charles Addams character, has admitted that Cash of Clunkers and the First Time Homebuyers Credits were a bad idea. This directly contradicts his old boss who said of his economic policies,
I believe all the choices we’ve made have been the right ones.
Goolsbee is, of course, correct in his conclusion, but it seems that he arrived at it through faulty reasoning. He says, in essence, that the reason the programs didn’t work is because the recovery has been so slow. Nonsense! He has cause and effect reversed. A principal cause of the sluggishness of the recovery has been caused by these and many other “stimulus” programs driving excessive federal borrowing.
Yet Goolsbee still supports the stimulus programs as a whole.