Goolsbee, warns of enduring joblessness

He was once named the funniest celebrity in Washington, found himself at the heart of a loose-lips political scandal that caused tensions between Canada and Barack Obama, and is now the president’s chief economic adviser.

WASHINGTON — He was once named the funniest celebrity in Washington, found himself at the heart of a loose-lips political scandal that caused tensions between Canada and Barack Obama, and is now the president’s chief economic adviser.

Austan Goolsbee, a longtime friend of Obama’s from Chicago, took to the talk show circuit Sunday to make his first public comments since getting the top job last week.

But this time the man who once joked “don’t believe anything the Canadians say” on The Colbert Report took on a decidedly more stern tone, issuing warnings about unemployment as the United States remains mired in an economic downturn.

“This recession is the deepest in our lifetimes, the deepest since 1929,” Goolsbee said on ABC’s This Week.

“More than eight million people lost their jobs. It’s going to take a significant push on our part — and time — before that comes down. I don’t anticipate it coming down right away.”

Goolsbee’s appointment as chair of the White House Council of Economic Advisers, replacing Christina Romer, comes on the heels of a series of initiatives announced by Obama last week aimed at invigorating the economy.

They include US$50 billion in infrastructure spending and an additional $200 billion in tax cuts for companies that are investing in research and development.

The University of Chicago economics professor couldn’t say how many jobs the measures could create, and whether they’ll help drive down the country’s 9.6 per cent unemployment rate.

“It obviously depends on how you do it,” said the 41-year-old Goolsbee, who has described his friendship with Obama as a bond between “two skinny guys with funny names.”

“It could have a significant impact on trying to get investment in factories … by small businesses in buying equipment, research and development and job creation in this country.”

While he’s not yet a household name in the United States, Goolsbee was certainly a cause celebre in Canadian diplomatic circles two years ago, in the heat of a bruising primary race between Obama and Hillary Clinton, now the president’s secretary of state.

Goolsbee allegedly had words of comfort to worried Canadian consulate officials in Chicago, assuring them that Obama’s anti-NAFTA campaign stance was “more about political positioning than a clear articulation of policy plans.”

Goolsbee denied saying it, prompting his quip to Stephen Colbert a year later.

The Canadian embassy in Washington backed him up, but once the story got out, the damage was done — the Clinton campaign leapt upon it, putting Obama on the defensive at a crucial moment in the campaign. Clinton and Obama were locked in a fierce primary battle in anti-NAFTA Ohio, one that Clinton ultimately won.

Goolsbee, himself a free-trader, kept a low profile following the diplomatic kerfuffle that became known as NAFTAgate, teaching a full course load at the University of Chicago in the spring of 2008.

Obama, in the meantime, has made no attempt to push for renegotiating the deal since he became president.

Michael Wilson, the former Canadian ambassador to the U.S. who left the post last year, worried someone in the Harper government was making him a scapegoat for the damaging leak. Wilson’s stint as ambassador ended last year.

The scandal has apparently been long forgotten in the United States. In media reports of Goolsbee’s appointment on Friday, there were few mentions of his role at the centre of Canada-U.S. political brouhaha.

On Sunday, Goolsbee’s focus was on the floundering U.S. economy and defending the administration, especially Vice President Joe Biden for recently coining the term “summer of recovery.” Republicans have been assailing Biden for the remark, pointing to continuing job losses and weak economic growth.

“The vice president was talking about the summer of recovery in reference to the recovery act, that you would see the creation of a series of infrastructure and other projects ramping up over the summer, and you did see that,” Goolsbee said on “Fox News Sunday.”

He also rapped the knuckles of Republicans, who have recently suggested they might vote to extend Bush-era tax cuts for the middle class.

Goolsbee said he doubted Republicans would agree to something Obama wants, which is to extend the cuts to all but the country’s most wealthy.

“In the past we have seen some of these circumstances in which what appears to be the offer of doing the sensible thing — in the light of day, there is a little bit of a feeling, ’well, if the President’s for it, I’m against it,’ then it falls apart,” he said.

The Bush tax cuts were enacted in 2001 and 2003, and cover all taxpayers. They’re slated to expire at the end of the year.

Obama and congressional Democrats want the tax cuts to remain in place for those earning less than US$250,000 a year, and those above that income bracket would have their tax rates restored to that higher levels that were previously in place.

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