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Hoover Institute Senior Fellow Ed Lazear on the Presidential race and efforts to boost the economy and job growth.
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Mitt Romney taking the president to task on the economy in at closing pitch to voters.
In the battleground state of Iowa today Romney's slamming President Obama for misguided policies that have slowed our recovery while promising big change.
Under -- Romney -- administration.
With more on this several -- senior fellow for the Hoover institute and former chief economic advisor to president George W.
Bush welcome back to show it's always great to have you here.
Hi big and I think -- -- I wanna play a little bit the -- so our viewers can get a sense of the town here it is.
Just where the jobs.
Were -- nine million more jobs that -- Obama promised his stimulus would have created by now.
There in China.
Mexico.
Canada in countries that have made this sells more attractive front doors and business and investment.
Even as -- Obama's policies.
Have made it less attractive for -- here.
So Ed we have one more jobs report to come what are you expecting it.
And is it gonna help Romney or is it gonna help the president.
Well I don't think it's gonna make much difference at all if you look at the picture that the economy has been traveling through for the past three years now.
We're basically in a situation where we have.
Continued slow growth so we've had growth at about 2% per year.
Since the turnaround in June of 2009.
A normal recovery should have double that and unless we get -- double that kind of growth we're not gonna have significant job growth.
That one of the things that you know that -- Jerry am sorry.
Well I would just make the point that Obama makes the point that it was Bush's fault and we have some sound not yet here's the president.
What he did -- what he inherited made the problem worse.
It just four short years she borrowed six trillion dollars nearly.
Adding almost as much debt held by the public gets all prior American presidents combined.
Well clearly that wasn't present Obama that was Mitt Romney on the campaign trail today.
In his economic speech.
And he's laying out this hour argument that we're having to borrow from the Chinese for everything we buy.
It is that a good nothing answer for what's going on here.
Well well I think what what the president of course wants to say is that we've had some significant job growth he uses number five million because ignores the government sector -- Even if you use the actual number which is about four point three million jobs.
Most of that job growth is jobs that accommodate the growth in the population so.
Unfortunate lead the numbers actually 87% of all jobs created have just accommodated that.
Growth of population so what we're getting is about 181000 jobs per month.
Since the turn around in June of 2009.
That means that it'll take our entire lifetimes just to get our jobs back that we lost back in 2009.
So.
Where where does not growing anywhere near fast enough we need a dramatic change in policy in order to get the economy growing again.
The policies have not worked surely the president inherited a tough economy.
But that what where what we're experiencing right now is not inheritance.
This is that these -- the policies that he's instituted the president did make the point this week.
That he wants a grand bargain he wants to get together with the other side of the -- find a way of fixing the fiscal -- so.
He does seem to be inching ever so slowly over the years and years and years to the right conclusion.
I you know I again I think our best predictor of the future is the past and the president has not been successful in putting together -- coalition he's not -- the coalition strategy over the past few years in fact.
His strategy has been anything but coalition it's been strictly the Democrats plus the president pushing policies through so.
I'm not confident that we'll see any kind of coalition forming although I sure hope we do.
Because -- in the fiscal cliff that you mentioned I think is a significant.
Impediment to the economy if we see very large increases in taxes and by the way.
I never like the -- fiscal cliff does it tends -- bunch the lower spending with higher taxes most of the problems on the tax side not the spending side.
But if we don't get that fixed we're going to have that very significant drag on this economy sufficiently significant that we could go into -- recession will.
Be specific about that the National Association of Manufacturers out with a study showing that.
If everything does stay in place.
We'll get unemployment at 12%.
We'll lose six million jobs.
Report even says that the threat of the fiscal cliff cut half a percent -- the GDP this year.
So the impact is already there it's gonna mean fewer jobs -- less robust economy do you think fair -- they're talking up this story do you think there.
Too pessimistic or do you think they're right on target.
Well I I you know I wouldn't vouch for their numbers but I'd certainly agree with the direction that they're talking about that there's no question that it's not just uncertainty it's that.
Concerned that we will have higher taxes and on taxes on sectors of the economy that have been.
Important in creating growth you know governor Romney's talked a lot about small business I think the president's kind of -- -- that but.
There is an important point there and that is that if you tax the top earners at 39% year hitting small businesses.
When you talk about investment when you talk about capital gains you talk about dividends taxation -- ordinary income levels.
You're talking about significant impediments to growth and that's -- -- create jobs in this country we know what works there there's a historical record on this stuff this is not just.
Campaign rhetoric if you look at the literature that studied this and I've -- that it planning.
We know that the policies that create growth are low taxes.
Good trade.
Cautious -- regulation and a fiscal policy that is.
Cautious in terms of creating a government structure that can grow the economy.
Well we're not -- in that direction right now we know that we went right exact quick last question today we we get GDP numbers.
Third quarter GDP -- at 2% if you back out government spending.
It's one point 3% is as fast enough do you believe these numbers are these numbers being cooked in -- -- Well I -- I doubt they've been cut but look -- yup they're bad enough as it is you don't have to cook them 2% is just.
No where near what we need the long term growth rate the thirty year growth rate is 3% a recovery growth rate is 4%.
So if you have to cook the numbers to get 2% you're pretty bad shape.
So I would say even -- 2%.
We are talking about an eternity before we get back to where we need to be were already -- 12% below where this economy should be.
It would take -- six years at 5% growth to get back to that.
We need to get going in -- -- in new direction in terms of economic.
Structure.
-- -- -- thanks for coming on tonight it's always a pleasure to talk to you I help you come back soon.
Thank you pleasure to be with you thanks for having me.
