Gene Sperling Thinks Asset Bubbles Are Cool

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Thursday, 06 January 2011 06:26

I will depart from my policy of not commenting on articles where I am mentioned to clarify the issues (to me) surrounding Gene Sperling's selection as a President Obama's national economic advisor. The primary issue is not that Sperling got $900,000 from Goldman Sachs for part-time work, although that does look bad. The primary issue is that Sperling thought, and may still think, that the policies that laid the basis for the economic collapse were just fine.

Sperling saw nothing wrong with the stock market bubble that laid the basis for the 2001 recession. The economy did not begin to create jobs again until two and a half years after the beginning of this recession and even then it was only due to the growth of the housing bubble. Gene Sperling also saw nothing wrong with the growth of that bubble. Gene Sperling also saw nothing wrong with the financial deregulation of the Clinton years which, by the way, helped make Goldman Sachs lots of money. And, he saw nothing wrong with the over-valued dollar which gave the United States an enormous trade deficit. This trade deficit undermined the bargaining power of manufacturing workers and helped to redistribute income upward.

In short, Sperling has a horrible track record of supporting policies that were bad for the country and good for Wall Street. This track record is far more important than his $900,000 consulting fee in providing my basis for objecting to Sperling's appointment. It is remarkable that it was not mentioned in this article.