Larry Summers: Blame Bad Weather for Unemployment Figures

March 2nd, 2010 6:14 PM

President Obama continuously tries to portray himself as a friend to the little-man, middle class and small business. Hence his attacks on "fat cats" who "just don't get it," while labeling the extravagant bonuses as "obscene," and "the height of irresponsibility."

Meanwhile, members of his administration, in defending a sweeping small-business aid program Obama announced in his State of the Union, give reason to wonder if they really understand how to help small business. 

Among the administration's proposals for small businesses are a $5,000 tax credit to hire new workers, elimination of capital gains taxes, and new incentives to invest in plants and equipment. At the same time, however, the administration plans to raise taxes on "the wealthiest Americans."

Obama's chief economic adviser Larry Summers appeared Feb. 9 on the Fox Business Channel to discuss the administration's economic agenda and defended proposed rate-hikes for those making over $250,000. "Almost all economists who studied these things have that kind of view," he told Fox's Liz Claman.

Perplexed, Fox News contributor Gary B. Smith replied: "it's the biggest bunch of B.S. I ever heard ... this is such a political game. , Larry Summers thinks everyone is Rockefeller living in their Newport, Rhode Island mansion. These are guys that are starting businesses, investing. You can't give people business money to hire people, they have to have a reason for hiring these people and that's because they see sales increasing or costs decreasing. You can't just say ‘go hire these five people' because the businesses will go ‘What for? I don't have the demand!'"

Contributor Mike Norman also disagreed with Obama's economic plan, saying, "If you want to get money into the hands of most people, the fastest, you do something that has been proposed now since this whole crisis began - and that is a suspension or significant reduction in the payroll tax. That's where people get the most taken out; that's something like a trillion-dollars every year that goes to the federal government - that just goes nowhere," Norman said. "That would bring our economy back, but he's not for that."

Recently, the chief economic adviser of the White House also sat down for an interview on CNBC's Monday edition of "Fast Money." And in anticipation of a new jobs report, Larry Summer was ready to blame bad weather for current economic troubles.

During the interview with Karen Finerman, Larry Summers stressed that recent winter blizzards may very likely distort the February jobless figures that are coming out Friday:

"Who knows what the numbers are going to be," Summers told Finerman. "The blizzards that affected much of the country during the last month are likely to distort the statistics and in past blizzards those statistics have been distorted by a hundred to two-hundred thousand jobs."

[Summers chuckle]

"So it's going to be very important to know, very important to look past whatever the next figures are to gauge the underlying trends."