Economy headed in the right direction, says Obama’s top economist

We noted earlier that real GDP growth declined in the second quarter from 2.0 percent to 1.5. In the final quarter of 2011, GDP growth was 4.1 percent, according to the latest adjustment.

Alan Krueger, chairman of President Obama’s Council of Economic Advisers, had this to say about the latest economic news: “While the economy continues to move in the right direction, additional growth is needed to replace the jobs lost in the deep recession that began at the end of 2007.”

Does the Obama administration really believe that the economy is moving in the right direction when GDP growth has slumped from 4.1 percent, to 2.0 percent, to 1.5 percent? That’s like baseball manager claiming that his team is moving in the right direction when its record over the past three seasons has fallen from .550, to .515, to .510. Such a manager would probably be fired, along with the GM who hired him.

But in this case the economy isn’t even at “.500.” GDP growth of better than 2 percent is the norm in the United States. Traditionally, we hope for 4 percent and expect at least 3. So even if the economy had held steady at 1.5 percent growth, this would still be bad news.

Krueger agrees that 1.5 percent growth is insufficient — he says additional growth is needed to replace jobs lost in the recession that began in 2007. But 1.5 percent growth has never been considered acceptable. If there had been no recession, that growth rate would be woeful.

The adminstration has either accepted American decline or is lying about how it views the latest economic news. I’d bet it’s some of both, but mostly lying. In either case, Krueger should be fired, along with the president who hired him.