No depression: Economy cratering slower than ever

White House economic adviser Austan Goolsbee defends Obama legacy -- after just three months

Published May 29, 2009 2:10PM (EDT)

The headline of a Bloomberg News article published Friday morning: "Obama Prevented Depression, Now Needs Patience, Goolsbee Says."

That would be Austan Goolsbee, a member of Obama's Council of Economic Advisers, speaking at a forum in New York on Thursday night. But what he actually said, according to Bloomberg, came in the context of defending Obama's stimulus spending against a critique from Jack Welch, the former CEO of General Electric.

"If you tried to slash spending and raise taxes you would repeat what drove us into the Great Depression," he said. "Treasury and the administration have embarked on a whole bunch of policies that have eased the credit spread quite substantially. There is no question that it is going to be a bumpy ride, but it is a signal achievement to be less worse."

A signal achievement to be less worse. Words to live by!

As if to underline Goolsbee's comments, on Friday morning the Commerce Department reported its revised estimate of how much GDP had fallen in the first quarter of 2009: 5.7 percent, instead of the originally reported 6.1 percent. The Wall Street Journal all but trumpeted a turnaround:

A leading panel of economists this week predicted GDP will fall only 1.8% in the second quarter, which runs April through June. The National Association of Business Economics forecasters see GDP growing in the third quarter, rising an anemic 0.7 percent, and projects a fourth-quarter increase of 1.8 percent.

1.8 percent economic growth isn't going to replace the millions of jobs lost in just the last six months any time soon. And as plenty of glum prognosticators are predicting, a return to economic "growth" in the fourth quarter could be a mere prelude to another plummet. But for now, it's definitely less worse.

By Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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