And they told us how smart he was! From Ron Suskind’s book on the Obama presidency, Confidence Men:
[Summers and Romer] were concerned by something the president had said in a morning briefing: that he thought the high unemployment was due to productivity gains in the economy. Summers and Romer were startled. “What was driving unemployment was clearly deficient aggregate demand,” Romer said. “We wondered where this could have been coming from. We both tried to convince him otherwise. He wouldn’t budge.” Summers had been focused intently on how to spur demand, and on what might drive a meaningful recovery. [W]ithout a rise in demand, in Summers’s view, nothing else would work. But productivity? If Obama felt that 10 percent unemployment was the product of sound, productivity-driven decisions by American business, then short-term government measures to spur hiring were not only futile but unwise. The two economists strained their memory had they said something he’d misconstrued? After a month, frustration turned to resignation. “The president seems to have developed his own view,” Romer said. [Emph. added]
Oy. Now I get why he has it in for ATMs. . . . President Obama’s view of productivity growth, assuming what Suskind writes is true, is extremely dispiriting. It’s one thing for the president to harbor some misguided economic idea or other. All presidents do that. One way we sort out the good ideas from the bad ones is by holding elections. But if the president really thinks that productivity growth causes unemployment and, by implication, impedes economic growth, he misunderstands, in the most basic possible way, how free-market industrial economies create wealth. It is a profound ignorance. And if he can’t get even Larry Summers to set him straight on the topic, President Obama might be a lot thicker than anyone realizes. . . Not encouraging. . . .