No doubt the mainstream media were dying to relive those heady days on the campaign, when they got such a rush out of cheerleading for the coolest guy ever to run for president. Unfortunately, its the morning after, and he suddenly doesn't look as great as he did after a couple of martinis in the hotel bar. First, the nomination gaffes, with the incredible embarrassment of sending up multiple nominees with open wound type tax problems. Not esoteric issues either. Just raw refusal to pay what they owe type situations. The spectacle of a former senate majority leader asserting that he "didn't know" he was supposed to pay tax on a limo and driver provided as part of his no work million dollar job with a hedge fund. Now the embarrassment of a stimulus bill drafted by Nancy Pelosi and a bunch of democrat ward politicians. A bill that was so laden with pork that even normally reliable liberal commentators like Paul Krugman had to turn away in shame and disgust. Obama's defense? Republicans ran up a deficit. That was it, republicans ran up a big deficit. So much for change. They did it, so he gets to as well. Of course, there was the obligatory arm waving about the dire results for the country if it wasn't passed, and the usual liberal talking points to the effect that anyone who opposed it wanted to see the country in ruins. As i recall, liberals were incandescant with rage when Bush said pretty much the same thing to justify invading Iraq. Obama's attempted justification for this porker on economic grounds was laughable. It reduced to repeating the talking point that government had to step up when private industry wasn't doing the job. Listening to him, one realized he had absorbed nothing out of the economic history of the past 30 years. This was exactly the talking points used in the '70's, that time of stagflation, gas lines and double digit interest rates. In obama's revisionist world, today's economic problems are the result of... you guessed it, tax cuts. Leave aside the fact that virtually all economists said at the time the Bush tax cuts kept us out of a serious recession following 9/11. Ignore the fact that tax cuts had nothing to do with the excesses of Fnm and FRE, two democrat slush funds. Or the incredible mismanagement of Wall Street, presided over by such democrat stalworths as Robert Rubin, who took down $120 mill for steering Citigroup into a ditch. Focus instead on the fact that Obama actually believes government can create prosperity. In obama's world, there are no trade offs. Rent control solves the problem of housing affordability. Minimum wage laws create gainful employment. Unemployment can be solved easily by government waving a magic wand in the form of a stimulus bill, which will not only put people to work but will get us lots of neat stuff we need, like energy efficient govenrment buildings. If this is true, my question is why be so damn stingy? Why not have government give us all $250,000 a year jobs? Think of the boost to the economy! Why not have government buy everyone a house too? In fact, the stimulus and bank rescue packages could pay off 90% of the country's mortgages, according to bloomberg. That actually might stimulate something. Unfortunately, I've seen this movie. The last reel features stagflation, high inflation with no growth and staggering unemployment. Then we get wage and price controls, then energy rationing, which means long lines. Since no one in his right mind will invest here, we will get exchange controls, a staple of the kind of banana republic economics Obama favors. You'll need to get a license to import or exchange your worthless dollars for real money. Of course, the government issues the license. No potential for corruption there, right?
Perspective alert: I remember when Clinton first came in to office. After his "gays in the military" priority when through as his first piece of government ....he proposed a spending bill to deliver us from the recession of Bush I of a whopping $60Billion. Of course this bit of insanity was shot down by a rational congress after a massive pubic outcry. Oh those were the days.
Excellent core points. A little partisan but truly well presented. Why can't others see things that are so obvious. Stagflation is a real worry and there is something wrong with a president who blames this crisis on tax cuts. I was trying to keep an open mind but Obama is sounding a a democratic hack right now. And geithner look liked a moot court semi finalist who polished his presentation but really did not understand the problem. Instead of coming up with answers he returned to his scripts. His either under equipped for the job or a liar. The problem is the banks are over valuing nearly worthless assets. The problem is that house prices have only deflated half way. The problem is that Wall street is probably only down 2/3 to half the way. We had a completely full of shit economy presided over by his buddies. We are going to return to 1990s pre-bubble pricing. Instead of being a cheerleader for an industry that has to shrink by 80% he should being planning the workout for the banks that were well managed.
The problem now is we're going to spend trillions trying to prevent assets from going to pre bubble prices. All it will do is prolong the time getting there and saddle us with how many more trillions in debt that we may not(?) be able to pay back.