I particularly like the part about embarrassing in front of staff economists, since I quite often amuse myself by picturing the looks on the economic advisers’ faces when they have to listen to a lot of the things that politicians say. I also don’t understand why the unemployment thing is so hard for people- in order to be unemployed, one has to be looking for a job. Otherwise, the unemployment rate would count people who didn’t want to work and politicians would decide that we have a national crisis of stay-at-home moms. (Granted, if you follow politics, you may have noticed that it pretty much seems like we do have that.) You see, when both the numerator and denominator of a fraction increase (as when the labor force gets bigger), the number can get bigg…oh, right, math, now I’m seeing the problem.
Anyway…technically speaking, the “Fix Our Economy Now” bill was passed in 1946 and it was the thing that created the Council of Economic Advisers in the first place. It’s called the Employment Act of 1946, and it pretty explicitly makes the ups and downs of the economy (i.e. business cycles) the government’s problem:
The act begins with a “Declaration of Policy” (section 2), affirming that it is “the continuing policy and responsibility of the Federal Government…to coordinate and utilize all its plans, functions, and resources for the purpose of creating and maintaining…conditions under which there will be afforded useful employment opportunities, including self-employment, for those able, willing, and seeking to work, and to promote maximum employment, production, and purchasing power.”
You can see more on the act here. I suppose this is at least better than the original Employment Act of 1945, which mandated that the federal government do everything in its power to achieve full employment, despite the fact that it’s unclear exactly what full employment is, whether the government has the power to achieve such a goal, and, even if so, whether the benefits of doing so outweigh the costs. Unfortunately, this bill’s close cousin, the Full Employment and Balanced Growth Act appeared in the 1970’s, and it explicitly mandates that the federal government take action towards to the goals of full employment, growth in production, price stability, and balance of trade and budget. I’m not sure why those who drafted the bill didn’t just add in “ponies for everyone” while they were at it, since they seem to be under the impression that the government has magical powers and doesn’t face tradeoffs. (For example, one way to theoretically get growth in production results in increased inflation, so satisfying some of the goals almost by definition entails not satisfying others.)
It’s things like these that almost make me feel sorry for politicians (as opposed to just sympathizing with the economists hired by the politicians). Almost. 🙂