Started spreading same NONSENSE about Europe now? The same recession nonsense and fear was used to short US markets in January 2008.
Presidents are now imo completely irrelevant to the economy of a country. The Bushes, Reagan, Carter, Clinton have had very marginal impact on our financial health. As Americans we like to blame everything on the Prez, but the truth is that he makes just a a percent or two difference (if that) on the General Account and, for that matter, in almost every other way. Repub or Dem - it really doesn't matter economically. I hate taxes and feel the government is stealing from my wallet. But, even so, I have to admit that Europe has shown that high taxes does not kill an economy. So I'm sorry, but I just don't see that Volcker's argument makes any sense as much as I respect what he did...
Shoe, I think a president has a huge impact on the content and tenor of economic policy. A few off the top of my head: Spoils system rewards upon election Obligation to deliver a federal budget by February Sarbannes - Oxley The First Tax Cut The Second Cut Complete overhaul of fees charged by every federal agency Medicare Prescription Drug Coverage Ignoring Lat Am Ignoring Africa Filling or suspending the filling of SPR Bankruptcy Reform Act of 2005 Corporate dollar repatriation under American Jobs Creation Act of 2005 Bernanke Nomination Paulson Appointment The Ethanol policy and related commodity price inflation The failed attempt at SS trust fund private placement Current economic stimulus Not to mention total hostility to sensible federal regulation or oversite of corporate excess, the Iraq War, and perhaps the biggest of all - undertaking a complete gutting and revamp of federal and agency rules in a corporate friendly way.
You forgot, it was W who told Greenspan to lower rates after the .com crash, sparking the current housing madness...
I agree with what you said about the Bernanke Nomination. However, almost all the other examples that you listed effect us as individuals but not the economy as a whole imo. It's massive things like interest rate levels, trade deficits, inflation/growth, money supply, credit liquidity, etc. that really effect the economy. And I want to state that I think if America would quit wasting their tax dollars on governmental bureaucrats and put it into R&D, we would kick the world's behind. But that's not going to happen with either Repub or Dem. Throwing a tiny check out to Americans around April is just a blip on the radar. And most of the other examples you listed are "Robin Hood" misallocations: stealing from one group to pay another. They are generally neutral economically, because the money doesn't get tied up - it still goes into the economy as a whole. Again, Europe, with its ugly and large scale tax structures and bureaucracy, has done quite well as much as we all hate to admit it... Here's a good link on the futility of the "stimulus package" btw: http://money.cnn.com/2008/01/31/news/economy/barr_recession.fortune/index.htm?postversion=2008020104 "Howard Simons, a strategist at Bianco Research in Chicago, warns that while the rate-cutting and stimulus plans are well intentioned, they are unlikely to result in a recovery any time soon. He says a look at currency markets suggests the U.S. economy is on the path to repeating Japan's so-called lost decade - the years of economic stagnation that followed the 1989 peak in stock and property prices. The problem, he says, is the weakening dollar. And that's why the government's attempt to save the economy could actually be damaging it. Lower rates and more government spending tend to undermine the value of the dollar, which has already fallen sharply in recent years. By reducing interest rates even further, the Fed's rate-cutting policy invites hedge funds and other investors to participate in the so-called dollar carry trade - the practice of borrowing money at low U.S. rates for the sake of investing the proceeds in countries with higher interest rates, and pocketing the difference. The dollar carry trade hurts the United States in two ways. First, it adds to pressure on the value of the dollar, because carry traders borrow in dollars and then sell the dollars to invest the proceeds in other, higher-yielding currencies. A weaker dollar reduces Americans' purchasing power. Second, dollars borrowed to invest in euros or Canadian loonies aren't available to be invested in U.S. enterprises. This deprives the economy of needed capital in the same way that overseas ownership of U.S. assets tends to enrich foreigners rather than U.S. citizens. "The implications of this are very negative," says Simons. He says that by repeatedly cutting rates in the face of negative economic data, the Fed "is trying to do the right thing," but the "cumulative effect will end up being hideously negative." He warns that rate cuts and stimulus don't feed real economic growth. Meanwhile, inflation is on the rise - and keeping rates low is likely to leave the United States "in a seriously inflationary mode.""
The Fed Chairman listens to his big bank brethren only. Do you really think that an extremely intelligent - and Greenspan is very intelligent even if you disagree with how he handled the economy - and highly educated economist-type cares anything about what a political hick like George Bush thinks?
"The EU has a more legitimate central bank and monetary system than the Mickey Mouse Fed." Remind me why Trichet wasn't the first governor of the ECB -Oh yes he was busy facing fraud charges. While Wanky Bernanke may be doing his best to discredit the US system, surely his incompetence can only be a temporary blight on the economy. Switching back to Europe, their undemocratic and corrupt politicians in their race to form a new Soviet style economy will ensure that the Euro area will fade into the background as the new economic powers emerge.
But his point was that they still do a better job of not overinflating the money supply, fraud or no...
"I sense an increasing number of global investors view Europe as falling substantially behind the curve as their economies weaken and the ECB continues to talk of the possibility of future rate hikes. This will likely lead to further US dollar strength and commodity weakness over the coming months. I continue to see the US Fed as now âahead of the curveâ and the odds of an intermeeting rate cut are rising meaningfully." - Hedge Fund Guy's Blog I've read for ages http://hedgefundmgr.blogspot.com/