White House Official Outlines Jobs Strategy The unemployment rate of 8.1 percent is the worst since 1983. Christina Romer, the chair of the Council of Economic Advisers, discusses what the White House is doing to get unemployment down.

White House Official Outlines Jobs Strategy

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ROBERT SIEGEL, host:

Now a talk with Christina Romer, who chairs President Obama's Council of Economic Advisors. Welcome to the program.

Professor CHRISTINA ROMER (Chairperson, Council of Economic Advisors): Thank you.

SIEGEL: There's some terrible unemployment numbers out today. What do they tell you about the economic outlook for the next few months?

Prof. ROMER: I mean, the first thing to say is they are, indeed, terrible. And we know that they really are a tragedy for the American people to see the unemployment rate go over 8 percent. That's certainly a lot of families hurting. I think the important thing from our point of view is it was largely expected. The president has been very careful to say that conditions would get worse before they get better. And unfortunately, we're in the they-will-get-worse part of this. And I think the thing we're trying to keep our eye on is, they will get better. And so we have, we feel we've put into place a very good plan that has lots of elements, and we fully expect it to eventually help the economy turn around. But there's just no way to say that we aren't hurting right now.

SIEGEL: How long do you think this it's-going-to-get-worse part is going to go on for?

Prof. ROMER: I think - I mean, I'm certainly looking at a lot of the private forecasters as well as our internal forecasters. And most them are saying, certainly, the first half of the year is going to be tough, and then it's the second half of the year when I think we start to see things turn around. And, you know, realistically, I think what we'll be seeing is smaller job losses for a while before we actually see them turn the other direction. But I'm certainly hoping by the end of the year that we're certainly in positive territory on GDP growth, and employment will be soon to follow.

SIEGEL: The other day when President Obama was asked about the stock market indexes and whether they indicate that investors haven't bought into the Obama program, he said that watching the indexes is like politicians watching the daily polls. They jump around a lot. If the Dow isn't a useful measure of economic confidence, are there any good, useful measures of economic confidence that you would turn to?

Prof. ROMER: I think the president had a good point of view there that, you know, confidence is inherently a hard thing to measure, and it's - we know it's very important, but it is a hard thing to tell when it's turned. Well, I certainly look at the various surveys, the Michigan Survey, the Rasmussen Survey. You know, they're certainly one way to get a read on consumers. Probably, ultimately, the best read is going to be: Do we see them spending? And that's certainly the kind of data that I'll be looking at to see if they are doing what we hope they will do.

SIEGEL: Consumer spending.

Prof. ROMER: Absolutely.

SIEGEL: I want to read something to you from a Financial Times column today. Gillian Tett writes: The government ought to persuade investors that banks are so healthy they cannot collapse, or promise to protect creditors if they do collapse. Instead, she writes, instead of doing something like nationalizing the banks, the U.S. and many European countries are rolling out piecemeal solutions. Meanwhile, efforts to persuade voters that banks are healthy are failing to convince, mainly because there is still so much uncertainty about asset values. Are you concerned - should the government be doing more? Should we be doing what Ms. Tett suggests?

Ms. ROMER: I feel we are doing a lot more. So - and the important thing we've announced, the stress test, and it's in the process of happening. That's exactly trying to get a good read on banks. And unfortunately, it takes a while. I mean, to do the test well just inherently is not an overnight procedure. And unfortunately, that creates a few weeks of uncertainty, but I think it is going to eventually give us a good read, and I think that will eventually be very comforting to people, to have a sense of where the banks are and what we need to do to make them healthy.

SIEGEL: The phrase a few weeks of uncertainty - at this stage, sounds fairly optimistic.

Ms. ROMER: I mean, I certainly am optimistic. I like to tell people that we wouldn't be taking all these policies if we didn't really think they'd work. And that is why I'm certainly very optimistic. I feel we have put in place, again, not just this very big, bold fiscal stimulus, but a good financial stabilization, a very good housing policy. And I do think they are going to have effects. You know, I think there certainly will be problems, or what as Tim Geithner always calls, you know, bumps along the way. But I do think it's fundamentally a sound policy, and it will eventually resolve that uncertainty and put us back on the right path.

SIEGEL: Well, Christina Romer, thank you very much for talking with us today.

Ms. ROMER: Great to be here.

SIEGEL: That's Christina Romer, who chairs President Obama's Council of Economic Advisors.

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