Your area of expertise is the Great Depression. Do you see parallels between today and the 1930s?
I do. Living through the recent crisis, I can see that when policymakers have to take extraordinary actions that are often unpopular, there’s a tremendous desire to get back to business as usual. But the reality is that unemployment is still 8.8 percent and the economy remains in desperate need of support.
You must not be much fun at cocktail parties.
I don’t get invited to many. Maybe there’s a reason.
The talk in Washington these days is around deficit reduction. Is that a mistake, given unemployment?
The issue isn’t the current deficit, which is mainly due to the recession; it’s the truly horrible deficit problem we’ll have 20 or 25 years out if we don’t deal with the projected rises in entitlement spending. The economy is sick right now and you need to make sensible investments to get people back to work.
One of the greatest disappointments among the president’s base is that the administration hasn’t done more to help those facing foreclosure.
Could we have done things better on housing? Absolutely. But there was no cheap, easy policy fix here.
Ben Bernanke set a new precedent last week by agreeing to take questions from the media after a Fed policy meeting. What took so long?
Other central banks have been doing this for a long time. But there hasn’t been an ethos of openness at the Fed, and every step toward clearer communication and transparency has been a battle. I give chairman Bernanke a lot of credit for sticking with it.
Last fall, after 20 months at the White House, you moved back to the Bay Area with your husband, fellow economist David Romer, and your son. I suppose your job put a lot of pressure on your husband too.
He basically walked around Washington saying, “I need a job where I can pick up my son after school, and if we need to meet a plumber at the house, it’s going to be me.” In the first few weeks we were there, he’d have all the ingredients out and ready for me to cook dinner when I got home. But then there was one night I was making beef with broccoli at 9:30 in tears and he realized he needed to learn to cook.