U.S. policy makers won’t make progress clearing up uncertainty for businesses and Americans this year, according to Austan Goolsbee, former chairman of the White House Council of Economic Advisers.
“The only thing we can be guaranteed of for this coming year is a whole lot of gridlock, so if that adds uncertainty I don’t know if there’s a whole lot we can do about that,” Goolsbee said today in a television interview on “Surveillance Midday” with Tom Keene.
Uncertainty was impeding growth at about 61 percent of small businesses in the U.S., according to a November survey from the National Federation of Independent Businesses. Half of those who cited uncertainty said it was the result of the political situation, the survey showed.
Congress agreed last month to extend a payroll-tax cut through February without resolving the conflict over how to cover the cost through 2012. While President Barack Obama is appealing to lawmakers to extend the break through 2012, Goolsbee said lower taxes do not always stimulate the economy.
“The data does not support that high-income tax cuts are the main drivers of growth, so I don’t think that uncertainty over what the tax rate will be for someone that makes a million dollars a year has that big an impact on the economic growth rate in the country,” said Goolsbee, an economics professor at the University of Chicago Booth School of Business.
Continued drops in joblessness will help Obama as he campaigns for the 2012 election, Goolsbee said. The jobless rate fell to 8.5 percent in December, the fourth consecutive decrease, according to figures from the Labor Department.
“We know there are a lot of people in the unemployment pool that do not match up in their skill set for what jobs are going to be created, and that’s an area we’ve got to keep pressing on,” he said.
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