The Obama Economy...
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Red Dragon
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The Obama Economy...
The Obama Economy
As the Dow keeps dropping, Obama is running out of people to blame.
As 2009 opened, three weeks before Barack Obama took office, the Dow Jones Industrial Average closed at 9034 on January 2, its highest level since the autumn panic. Yesterday the Dow fell another 4.24% to 6763, for an overall decline of 25% in two months and to its lowest level since 1997. The dismaying message here is that President Obama's policies have become part of the economy's problem.
Americans have welcomed the Obama era in the same spirit of hope the President campaigned on. But after five weeks in office, it's become clear that Mr. Obama's policies are slowing, if not stopping, what would otherwise be the normal process of economic recovery. From punishing business to squandering scarce national public resources, Team Obama is creating more uncertainty and less confidence -- and thus a longer period of recession or subpar growth.
The Democrats who now run Washington don't want to hear this, because they benefit from blaming all bad economic news on President Bush. And Mr. Obama has inherited an unusual recession deepened by credit problems, both of which will take time to climb out of. But it's also true that the economy has fallen far enough, and long enough, that much of the excess that led to recession is being worked off. Already 15 months old, the current recession will soon match the average length -- and average job loss -- of the last three postwar downturns. What goes down will come up -- unless destructive policies interfere with the sources of potential recovery.
And those sources have been forming for some time. The price of oil and other commodities have fallen by two-thirds since their 2008 summer peak, which has the effect of a major tax cut. The world is awash in liquidity, thanks to monetary ease by the Federal Reserve and other central banks. Monetary policy operates with a lag, but last year's easing will eventually stir economic activity.
Housing prices have fallen 27% from their Case-Shiller peak, or some two-thirds of the way back to their historical trend. While still high, credit spreads are far from their peaks during the panic, and corporate borrowers are again able to tap the credit markets. As equities were signaling with their late 2008 rally and January top, growth should under normal circumstances begin to appear in the second half of this year.
So what has happened in the last two months? The economy has received no great new outside shock. Exchange rates and other prices have been stable, and there are no security crises of note. The reality of a sharp recession has been known and built into stock prices since last year's fourth quarter.
What is new is the unveiling of Mr. Obama's agenda and his approach to governance. Every new President has a finite stock of capital -- financial and political -- to deploy, and amid recession Mr. Obama has more than most. But one negative revelation has been the way he has chosen to spend his scarce resources on income transfers rather than growth promotion. Most of his "stimulus" spending was devoted to social programs, rather than public works, and nearly all of the tax cuts were devoted to income maintenance rather than to improving incentives to work or invest.
His Treasury has been making a similar mistake with its financial bailout plans. The banking system needs to work through its losses, and one necessary use of public capital is to assist in burning down those bad assets as fast as possible. Yet most of Team Obama's ministrations so far have gone toward triage and life support, rather than repair and recovery.
AIG yesterday received its fourth "rescue," including $70 billion in Troubled Asset Relief Program cash, without any clear business direction. (See here.) Citigroup's restructuring last week added not a dollar of new capital, and also no clear direction. Perhaps the imminent Treasury "stress tests" will clear the decks, but until they do the banks are all living in fear of becoming the next AIG. All of this squanders public money that could better go toward burning down bank debt.
The market has notably plunged since Mr. Obama introduced his budget last week, and that should be no surprise. The document was a declaration of hostility toward capitalists across the economy. Health-care stocks have dived on fears of new government mandates and price controls. Private lenders to students have been told they're no longer wanted. Anyone who uses carbon energy has been warned to expect a huge tax increase from cap and trade. And every risk-taker and investor now knows that another tax increase will slam the economy in 2011, unless Mr. Obama lets Speaker Nancy Pelosi impose one even earlier.
Meanwhile, Congress demands more bank lending even as it assails lenders and threatens to let judges rewrite mortgage contracts. The powers in Congress -- unrebuked by Mr. Obama -- are ridiculing and punishing the very capitalists who are essential to a sustainable recovery. The result has been a capital strike, and the return of the fear from last year that we could face a far deeper downturn. This is no way to nurture a wounded economy back to health.
Listening to Mr. Obama and his chief of staff, Rahm Emanuel, on the weekend, we couldn't help but wonder if they appreciate any of this. They seem preoccupied with going to the barricades against Republicans who wield little power, or picking a fight with Rush Limbaugh, as if this is the kind of economic leadership Americans want.
Perhaps they're reading the polls and figure they have two or three years before voters stop blaming Republicans and Mr. Bush for the economy. Even if that's right in the long run, in the meantime their assault on business and investors is delaying a recovery and ensuring that the expansion will be weaker than it should be when it finally does arrive.
As the Dow keeps dropping, Obama is running out of people to blame.
As 2009 opened, three weeks before Barack Obama took office, the Dow Jones Industrial Average closed at 9034 on January 2, its highest level since the autumn panic. Yesterday the Dow fell another 4.24% to 6763, for an overall decline of 25% in two months and to its lowest level since 1997. The dismaying message here is that President Obama's policies have become part of the economy's problem.
Americans have welcomed the Obama era in the same spirit of hope the President campaigned on. But after five weeks in office, it's become clear that Mr. Obama's policies are slowing, if not stopping, what would otherwise be the normal process of economic recovery. From punishing business to squandering scarce national public resources, Team Obama is creating more uncertainty and less confidence -- and thus a longer period of recession or subpar growth.
The Democrats who now run Washington don't want to hear this, because they benefit from blaming all bad economic news on President Bush. And Mr. Obama has inherited an unusual recession deepened by credit problems, both of which will take time to climb out of. But it's also true that the economy has fallen far enough, and long enough, that much of the excess that led to recession is being worked off. Already 15 months old, the current recession will soon match the average length -- and average job loss -- of the last three postwar downturns. What goes down will come up -- unless destructive policies interfere with the sources of potential recovery.
And those sources have been forming for some time. The price of oil and other commodities have fallen by two-thirds since their 2008 summer peak, which has the effect of a major tax cut. The world is awash in liquidity, thanks to monetary ease by the Federal Reserve and other central banks. Monetary policy operates with a lag, but last year's easing will eventually stir economic activity.
Housing prices have fallen 27% from their Case-Shiller peak, or some two-thirds of the way back to their historical trend. While still high, credit spreads are far from their peaks during the panic, and corporate borrowers are again able to tap the credit markets. As equities were signaling with their late 2008 rally and January top, growth should under normal circumstances begin to appear in the second half of this year.
So what has happened in the last two months? The economy has received no great new outside shock. Exchange rates and other prices have been stable, and there are no security crises of note. The reality of a sharp recession has been known and built into stock prices since last year's fourth quarter.
What is new is the unveiling of Mr. Obama's agenda and his approach to governance. Every new President has a finite stock of capital -- financial and political -- to deploy, and amid recession Mr. Obama has more than most. But one negative revelation has been the way he has chosen to spend his scarce resources on income transfers rather than growth promotion. Most of his "stimulus" spending was devoted to social programs, rather than public works, and nearly all of the tax cuts were devoted to income maintenance rather than to improving incentives to work or invest.
His Treasury has been making a similar mistake with its financial bailout plans. The banking system needs to work through its losses, and one necessary use of public capital is to assist in burning down those bad assets as fast as possible. Yet most of Team Obama's ministrations so far have gone toward triage and life support, rather than repair and recovery.
AIG yesterday received its fourth "rescue," including $70 billion in Troubled Asset Relief Program cash, without any clear business direction. (See here.) Citigroup's restructuring last week added not a dollar of new capital, and also no clear direction. Perhaps the imminent Treasury "stress tests" will clear the decks, but until they do the banks are all living in fear of becoming the next AIG. All of this squanders public money that could better go toward burning down bank debt.
The market has notably plunged since Mr. Obama introduced his budget last week, and that should be no surprise. The document was a declaration of hostility toward capitalists across the economy. Health-care stocks have dived on fears of new government mandates and price controls. Private lenders to students have been told they're no longer wanted. Anyone who uses carbon energy has been warned to expect a huge tax increase from cap and trade. And every risk-taker and investor now knows that another tax increase will slam the economy in 2011, unless Mr. Obama lets Speaker Nancy Pelosi impose one even earlier.
Meanwhile, Congress demands more bank lending even as it assails lenders and threatens to let judges rewrite mortgage contracts. The powers in Congress -- unrebuked by Mr. Obama -- are ridiculing and punishing the very capitalists who are essential to a sustainable recovery. The result has been a capital strike, and the return of the fear from last year that we could face a far deeper downturn. This is no way to nurture a wounded economy back to health.
Listening to Mr. Obama and his chief of staff, Rahm Emanuel, on the weekend, we couldn't help but wonder if they appreciate any of this. They seem preoccupied with going to the barricades against Republicans who wield little power, or picking a fight with Rush Limbaugh, as if this is the kind of economic leadership Americans want.
Perhaps they're reading the polls and figure they have two or three years before voters stop blaming Republicans and Mr. Bush for the economy. Even if that's right in the long run, in the meantime their assault on business and investors is delaying a recovery and ensuring that the expansion will be weaker than it should be when it finally does arrive.
Sam
Keeper of the furry things...Master of the kibble....Scooper of the poo!
Keeper of the furry things...Master of the kibble....Scooper of the poo!
Re: The Obama Economy...
I was talking to the 8 year-old daughter of a friend of mine, and she said she wanted to be President some day. Both of her parents, liberal Democrats, were standing there, so I asked her, "If you were President what's the first thing you would do?"
She replied, "I'd give food and houses to all the homeless people."
"Wow - what a worthy goal," I told her. "But you don't have to wait until you're President to do that. You can come over to my house and mow the grass, pull weeds, and rake my yard, and I'll pay you $50. Then I'll take you over to the grocery store where the homeless guy hangs out, and you can give him the $50 to use toward food or a new house."
She thought that over for a few seconds, cause after all she's only 8.
And while her Mom glared at me, she looked me straight in the eye and asked, "Why doesn't the homeless guy come over and do the work himself, and you can just pay him the $50?"
And I said, "Welcome to the Republican Party."
Her folks still aren't talking to me!
She replied, "I'd give food and houses to all the homeless people."
"Wow - what a worthy goal," I told her. "But you don't have to wait until you're President to do that. You can come over to my house and mow the grass, pull weeds, and rake my yard, and I'll pay you $50. Then I'll take you over to the grocery store where the homeless guy hangs out, and you can give him the $50 to use toward food or a new house."
She thought that over for a few seconds, cause after all she's only 8.
And while her Mom glared at me, she looked me straight in the eye and asked, "Why doesn't the homeless guy come over and do the work himself, and you can just pay him the $50?"
And I said, "Welcome to the Republican Party."
Her folks still aren't talking to me!
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Red Dragon
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- Joined: Wed Dec 13, 2006 6:03 pm
Re: The Obama Economy...
Typical liberal, it's all well and good to give hand outs until they have to do it directly, then it's a bad thing. They hate it even worse when you show them how ridiculous it is.Desi wrote:I was talking to the 8 year-old daughter of a friend of mine, and she said she wanted to be President some day. Both of her parents, liberal Democrats, were standing there, so I asked her, "If you were President what's the first thing you would do?"
She replied, "I'd give food and houses to all the homeless people."
"Wow - what a worthy goal," I told her. "But you don't have to wait until you're President to do that. You can come over to my house and mow the grass, pull weeds, and rake my yard, and I'll pay you $50. Then I'll take you over to the grocery store where the homeless guy hangs out, and you can give him the $50 to use toward food or a new house."
She thought that over for a few seconds, cause after all she's only 8.
And while her Mom glared at me, she looked me straight in the eye and asked, "Why doesn't the homeless guy come over and do the work himself, and you can just pay him the $50?"
And I said, "Welcome to the Republican Party."
Her folks still aren't talking to me!
Sam
Keeper of the furry things...Master of the kibble....Scooper of the poo!
Keeper of the furry things...Master of the kibble....Scooper of the poo!
Re: The Obama Economy...
of course that's not something that really happened to me,there are no liberals in Adairsville
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chris
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Re: The Obama Economy...
DAMN, you wrecked it for me. I was like... "DESI IS MY HERO.... DESI FOR PRESIDENT" 
Re: The Obama Economy...
I've known my share of homeless people,there's a lot of those in the Netherlands.Mind you,not because they can't be helped.They choose to live outside of the system.
I've bought them food at times,never gave them money,because I knew very well what they'd spend it on.
I don't know if any of you ever tried giving food to people who beg for money here.Most of them get pi$$ed off,lol
There's this couple just outside of Calhoun,she's on one side of the street and he's on the other side.They're always smoking!
Now how come they can afford cigarettes if they can't afford food???You can buy 3 burgers for the price of one pack of marlboro!!!
I've been homeless (some guy from Turkey was living in the aparment that was supposed to be mine),and I've been broke.Never longer than a week,because I always found something to do real fast.
Wouldn't want to be president,I'm too honest and I'd shoot the reporters if they bugged me,lol
I've bought them food at times,never gave them money,because I knew very well what they'd spend it on.
I don't know if any of you ever tried giving food to people who beg for money here.Most of them get pi$$ed off,lol
There's this couple just outside of Calhoun,she's on one side of the street and he's on the other side.They're always smoking!
Now how come they can afford cigarettes if they can't afford food???You can buy 3 burgers for the price of one pack of marlboro!!!
I've been homeless (some guy from Turkey was living in the aparment that was supposed to be mine),and I've been broke.Never longer than a week,because I always found something to do real fast.
Wouldn't want to be president,I'm too honest and I'd shoot the reporters if they bugged me,lol
Re: The Obama Economy...
i have to confess here.....i look thru the usual posts..read them then look for anything that has both jeff and red dragons name on them....im sorry but i really enjoy theyre banter...
i dont know alot about politics so i stay shhh...but im learning from these two ...
i love it!! i sometimes think OMG did he say that then read the response and think...oh yep...hes joking...but i never really know...all i can say is thank you guys....you are both very interesting people and i love wtching the disagreements....now does that make me a trouble maker or just crazy/?
keep it up...i hope everyone thinks this too...or again am i mad and have missed the point here....do they seriously hate each other.........
i dont know alot about politics so i stay shhh...but im learning from these two ...
i love it!! i sometimes think OMG did he say that then read the response and think...oh yep...hes joking...but i never really know...all i can say is thank you guys....you are both very interesting people and i love wtching the disagreements....now does that make me a trouble maker or just crazy/?
keep it up...i hope everyone thinks this too...or again am i mad and have missed the point here....do they seriously hate each other.........
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Red Dragon
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Re: The Obama Economy...
Sam
Keeper of the furry things...Master of the kibble....Scooper of the poo!
Keeper of the furry things...Master of the kibble....Scooper of the poo!
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chris
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Re: The Obama Economy...
See, I'm not the only one that sees the love hate relationship they have. They both have that raw humor, that I actualy like, I have a little raw humor myself at times. Not a lot of people can take that or see that. Sure, they are kidding, but sometimes not, most of the time I'd have to say they are. just jabbing each other like bar buddies... HA!
kez65 wrote:i have to confess here.....i look thru the usual posts..read them then look for anything that has both jeff and red dragons name on them....im sorry but i really enjoy theyre banter...
i dont know alot about politics so i stay shhh...but im learning from these two ...
i love it!! i sometimes think OMG did he say that then read the response and think...oh yep...hes joking...but i never really know...all i can say is thank you guys....you are both very interesting people and i love wtching the disagreements....now does that make me a trouble maker or just crazy/?
keep it up...i hope everyone thinks this too...or again am i mad and have missed the point here....do they seriously hate each other.........
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Red Dragon
- Rank 3
- Posts: 1946
- Joined: Wed Dec 13, 2006 6:03 pm
Re: The Obama Economy...
Here that Jeff, she likes us, your dream may come true afterall. Chris, you will have to stock up on diapers, baby pins, and a nuk nuk.
Sam
Keeper of the furry things...Master of the kibble....Scooper of the poo!
Keeper of the furry things...Master of the kibble....Scooper of the poo!
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chris
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Re: The Obama Economy...
who is going to need all that? YOU or JEFF?Red Dragon wrote:Here that Jeff, she likes us, your dream may come true afterall. Chris, you will have to stock up on diapers, baby pins, and a nuk nuk.
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Red Dragon
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Re: The Obama Economy...
Did you get that picture I sent? 
Sam
Keeper of the furry things...Master of the kibble....Scooper of the poo!
Keeper of the furry things...Master of the kibble....Scooper of the poo!
Re: The Obama Economy...
Bar buddies? I look at it more like Batman and the joker, someone has to keep the joker under control.chris wrote: just jabbing each other like bar buddies... HA!
“...There comes a time when one must take a position that is neither safe, nor politic, nor popular, but one must take it because conscience tells one that it is right.” MLK
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chris
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Re: The Obama Economy...
LOL, ok if thats they way you want it....Jeff&Peks wrote:Bar buddies? I look at it more like Batman and the joker, someone has to keep the joker under control.chris wrote: just jabbing each other like bar buddies... HA!
But still... a love hate relationship, Batman can't survive without the Joker...Re: The Obama Economy...
[quote="chris LOL, ok if thats they way you want it.... But still... a love hate relationship, Batman can't survive without the Joker...[/quote]
Where have you been, Batman has a bunch of enemy's not just the Joker, I think the Penguin just got banned.
But still... a love hate relationship, Batman can't survive without the Joker...[/quote]Where have you been, Batman has a bunch of enemy's not just the Joker, I think the Penguin just got banned.
“...There comes a time when one must take a position that is neither safe, nor politic, nor popular, but one must take it because conscience tells one that it is right.” MLK
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chris
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Re: The Obama Economy...
Jeff&Peks wrote:[quote="chris LOL, ok if thats they way you want it....
Where have you been, Batman has a bunch of enemy's not just the Joker, I think the Penguin just got banned.
exactly!
Re: The Obama Economy...
Let's see how this works, we got Batman, the Joker, the Penquin, Hmm I guess the make you the love interest. You want to go for a ride in the BatCooper.
“...There comes a time when one must take a position that is neither safe, nor politic, nor popular, but one must take it because conscience tells one that it is right.” MLK
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Red Dragon
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Re: The Obama Economy...
Yea that's it, you could put some little fairy wings on it.
Sam
Keeper of the furry things...Master of the kibble....Scooper of the poo!
Keeper of the furry things...Master of the kibble....Scooper of the poo!
-
nuke
Re: The Obama Economy...
What Chris, now I am chopped liver? Jeff has left me for a new love?
Re: The Obama Economy...
nuke wrote:What Chris, now I am chopped liver? Jeff has left me for a new love?
No, you won me over with the Jeep, the Cabin and the Chow, that showed you were some what sane just alittle misguided. Red Dragon is to far gone, he over the hill with no return.
“...There comes a time when one must take a position that is neither safe, nor politic, nor popular, but one must take it because conscience tells one that it is right.” MLK
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chris
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Re: The Obama Economy...
Jeff&Peks wrote:nuke wrote:What Chris, now I am chopped liver? Jeff has left me for a new love?
No, you won me over with the Jeep, the Cabin and the Chow, that showed you were some what sane just alittle misguided. Red Dragon is to far gone, he over the hill with no return.
no no no... you have it all wrong Jeff... and thats because Nuke is actualy "The Riddler"
Re: The Obama Economy...
Speaking of Batman, i'm not really into batman but have Y'all seen the Joker? Good movie, made me a fan but Conner said nothing in the Joker is true, Batman and harry two face are not friends and According to Conner the girl in the movie would be hotter if it was really Batman.
“...There comes a time when one must take a position that is neither safe, nor politic, nor popular, but one must take it because conscience tells one that it is right.” MLK