Austan Goolsbee

'The question is: Should we be giving an extra $120 billion to people in the top 1%?" So asked Gene Sperling, Hillary Clinton's chief economic advisor, at a recent National Press Club panel discussion. Translation: It's the government's money, and anything left over after Uncle Sam picks your pockets is a "gift."

The economic recovery faltered dramatically in the first half of the year, and that means more trouble ahead. The latest Commerce Department figures show that the nation's economic output was gasping for breath long before the debilitating debt-ceiling debate took center stage, further dimming prospects for 14 million unemployed Americans. The nation's total economic output grew at an anemic annual rate of 1.3% from April through June, below already weak expectations. And the government sharply scaled back its estimate of first-quarter growth to a feeble 0.4%, the lowest figure since the recession technically ended two years ago. "These are disastrous numbers for the economy," said Bernard Baumohl, chief global economist at the Economic Outlook Group.

President Obama, meeting with homeowners at the White House, said the government's efforts to drive down interest rates had fueled a surge in refinancing -- putting money into many homeowners' pockets during the current economic crisis. But almost all the refinancing so far involves borrowers with conventional mortgages who are not in serious financial trouble. The president's own programs for helping troubled homeowners are just beginning to get off the ground.

As President Obama remakes his senior staff, he is also shaping a new approach for the second half of his term: to advance his agenda through executive actions he can take on his own, rather than pushing plans through an increasingly hostile Congress. A flurry of staff departures and promotions is playing out as the White House ends a nearly two-year period of intense legislative activity. Where the original staff was built to give Obama maximum clout in Congress, the new White House team won't need the same leverage with lawmakers.

The guessing game about who will replace Lawrence Summers as President Obama's top economic advisor is ramping up. With Wall Street and Washington fond of speculation, the names of two high-powered Southern Californians surfaced Tuesday to add to a growing list of possible successors for Summers as director of the National Economic Council. The latest buzz was that Obama would tap one of two big names from Newport Beach mutual fund giant Pacific Investment Management Co.: widely regarded fund manager Bill Gross or Chief Executive Mohamed El-Erian.

In his March 22 blog post criticizing proposals to switch from the consumer price index to "chained CPI" to determine cost-of-living adjustments for Social Security beneficiaries and other items in the federal budget, Michael Hiltzik claimed that there were "no grounds" for the statement made in a recent paper from the Moment of Truth Project (" Measuring Up, The Case for Chained CPI" ) that the chained CPI provides a more accurate measure of inflation than the measure currently used.  In fact, experts across the ideological spectrum agree that the chained CPI is indeed more accurate.

The narrative that haunts Cleveland ? former empire of iron and steel, shipping and rail ? has followed it for decades: the collapse of the manufacturing economy, the erosion of jobs, the exodus of residents. But Cleveland has weathered this recession much better than past slumps, as local industries have retooled and reinvented themselves. Old shops and factories have embraced new technologies. And for the first time in a while, there are grounds for optimism. That new story line is what draws President Obama to the city Tuesday, as he works to sell his new budget plan and the broader philosophy on which it relies.

Amid fresh signs of financial troubles, President-elect Barack Obama announced Wednesday that he was tapping a seasoned figure from past economic struggles to head a new advisory panel dedicated to creating jobs and stabilizing the markets. Obama said that former Federal Reserve Chairman Paul A. Volcker, 81, would head the committee, bringing into his circle of top economic advisors a man credited with curbing the high inflation rates of the late 1970s.

In the West Wing it had become a pretty common sight: two national security aides with close ties to the president, Thomas Donilon and Denis McDonough, hurrying into the Oval Office to show him the latest piece of hot intelligence. Some administration officials who watched the scene unfold worried that James L. Jones, the national security advisor at the time, was being left out of the loop and that Obama was being given raw reports before their meaning and import were clear. A strong national security advisor might weed out what the president doesn't need to see. Yet Obama never quite clicked with Jones ?

The sub-prime mortgage crisis and worsening credit card debt are only intensifying a longer-term trend of economic distress for most Americans. This reversal of fortune, which began in the 1970s, includes dwindling prospects for good employment, severe cutbacks in employer-provided health insurance, less reliable company pensions and family incomes that lag inflation, except for the rich. All these trends have accelerated during the Bush administration.