BIDEN’S AWKWARD ADMISSION…. One would like to think that high-profile politicians would have learned by now to avoid “no one could have predicted” arguments. They make the speaker appear foolish, and invariably lead to reports showing lots of people predicting precisely what “no one could have predicted.”
Vice President Biden, then, seemed to stumble into a mistake yesterday during an interview with George Stephanopoulos.
“The truth is, we and everyone else misread the economy,” Biden told me during our exclusive “This Week” interview in Iraq.
Biden acknowledged administration officials were too optimistic earlier this year when they predicted the unemployment rate would peak at 8 percent as part of their effort to sell the stimulus package. The national unemployment rate has ballooned to 9.5 percent in June — the worst in 26 years.
“The truth is, there was a misreading of just how bad an economy we inherited,” said Biden, who is leading the administration’s effort to implement it’s [sic] $787 billion economic stimulus plan.
This has prompted a variety of reports showing all kinds of people — Krugman and Stiglitz, among others — warning at the time that the economic recovery package passed in February was too small. Biden’s remark that “everyone … misread the economy” has been interpreted as a concession that the White House should have been more ambitious and less flexible when Senate “centrists” wanted to shrink the stimulus efforts.
But taking a closer look at Biden’s comments, it seems the VP wasn’t actually reflecting on the stimulus at all. Indeed, Biden defended the existing stimulus, calling it the “right package given the circumstances we’re in.” He added that the recovery package has only been in effect for 120 days, and needs more time to inject more money into the economy: :[T]his is just started, the pace of the ball is now going to increase.”
So, if Biden wasn’t conceding that the stimulus wasn’t big enough, what was he acknowledging? Or, put another way, how did the administration “misread the economy”? That’s the part that’s far less clear. I get the sense the VP is saying that the administration raised expectations about how quickly economic matters would improve, and that was in error. When officials said, for example, that the stimulus would prevent double-digit unemployment rates, that was overly optimistic.
If that’s what Biden meant, he should have been far clearer. Saying the administration “misread the economy” makes it sound like the White House chose an insufficient and/or inadequate course in response to the economic crisis. That’s not what the VP was trying to say, but that’s what a lot of people are going to hear.