Is there anything that he’s done for which you would criticize him?
[Wednesday morning update]
Victor Davis Hanson has some advice for the Messiah, that he won’t take.
You see, as in the case of any other politician, one must look to what he does—and has done—not what he says for election advantage.
And in the case of Sen. Obama, in his nascent career in the Senate, he had already compiled the most partisan record of any Democratic Senator. He had attended religiously one of the most racially divisive and extremist churches in the country. His Chicago friends were not moderates. His campaigns for state legislature, the House and the Senate were hard-ball, no-prisoner affairs of personal destruction, even by Chicago standards. Campaign references to reparations, gun- and bible-clingers, and Rev. Wright’s wisdom were not words of healing.
But the rubes bought it, anyway.
Right now, nothing comes to mind. When (not if, but when) he does something I don’t like, I will say something.
What a shock.
Off the top of my head, I would criticize him for:
* Not pushing for a bigger stimulus package
* Not moving more quickly to do something about insolvent banks
* Sending more troops to Afghanistan before deciding on a new strategy there
* Appointing Judd Gregg
* Appointing Kathleen Sibelius (who could do more good by running for the Senate in 2010; Howard Dean could do the HHS job at least as well)
* Opposing lawsuits over warrant-less wiretapping
* Not waiting 5 days to sign bills, as promised in his campaign (e.g. he only waited 4 to sign the stimulus bill)
That said, I’m thrilled with what he’s done so far. For nearly two years I went door-to-door, made phone calls, gave money, hosted events, and did whatever else I could to help get him elected, based (in part) on his promises to withdraw from Iraq, enact major health care reform, and address climate change. In just 6 weeks he’s taken major strides in all those areas (as well as many others). I’m not surprised to see him stick so closely to his campaign priorities, but all the same I’m very pleased.
My biggest fear at this point is that the continuing collapse of the financial system might swamp everything else he is trying to do.
Well, Jim, I’m gratified to see that at least one apologist can pull his mouth from the groin of the Messiah long enough to complain that he isn’t collectivizing the country fast enough, and isn’t sufficiently fascist.
Jim, my ex-wife actually said, when I told her we didn’t have the money to buy something she wanted, “Just charge it.” You two should talk.
Just wait till harvest season this year…when they send the FBI into Kansas to sieze the grain harvest from the kulaks.
My biggest fear at this point is that the continuing collapse of the financial system might swamp everything else he is trying to do.
Yep. We’ve got a President who appears to be doing everything He can to make the collapse happen, and His worshippers are afraid that might distract Him for His Holy Mission to do the Really Important Stuff. (Which is?)
Jim,
Capital is on strike. The financial crisis you mention is being drastically worsened by Obama. As soon as it looked like Obama was going to win investors started pulling out of the market. About the only area of investment left is angel and he’s trying to kill that off, too. And these capitalists don’t really care if you don’t like it. You can’t force them to do what they do…
Er…Jim, you don’t think “the continuing collapse of the financial system” might be something to which your guy ought to be paying a wee bit of attention? A bit of productive and effective attention? Something other than giving speeches advising people to buy stocks and CEOs to go with the K-Mart drapes? He does have all the levers of power, you know. He obvious does (or did) have the power to direct more than $1 trillion in whatever direction he liked.
Is it your position that he is making progress on this front, but…er..we just don’t see it yet? The market and house prices continue in free fall, unemployment continues to rise, and insolvent banks keep coming back for more bailout money because…uh…because there’s some inertia in the system, and things have to get worse before they get better?
Or is he still gathering his eldritch powers, pondering, and will deploy his mighty wand very soon, at which point the Dow will rebound, unemployment claims will slip, and Citibank will turn a small monthly operating profit?
Or is all this financial stuff just beyond his powers, because of the malign influence of wreckers and Bush moles, out here amongst us unwashed, people who deliberately thwart the noble efforts coming out of Washington?
I realize this whole sordid business of forestalling the Weimarization of the United States gets in the way of the really important stuff, like getting compact fluorescents in every light fixture and solar panels atop every rooftop, not to mention ending this grossly unfair and ridiculous burden of having to pay for your medical care, which ought to be as free as air.
My teenagers feel simlarly, actually. Raised never knowing real want, taught in school it only happens when wicked people hog all the goodies, won’t share the natural wealth that grows naturally on trees, they find it vaguely outrageous that the grimy boring business of earning a living should so greatly interfere with the delightful process of enjoying life.
“* Not pushing for a bigger stimulus package”
How many more trillions would satisfy you?
That kind of made my jaw drop too, Andrea. But I assume Jim put it in there just to yank our chain. Kind of the way people will sometimes double down on screwy statements just because you get points for sheer audacity.
You’re not really going to eat that, are you? It was on the floor! Of course I am! In fact, watch me take a mouthful of dirt, yum yum, bwa ha ha
Hey, at least Obama is providing tremendous stimulus to the firearms industry. Sales have never been better.
Regarding the stimulus: The Obama administration’s rationale for stimulus spending, as put forth in Christina Romer and Jared Bernstein’s “The Job Impact of the American Recovery and Investment Plan”, is that the $550 billion in spending in the plan will make up for about a third of the output gap that we’re facing. And since that was written we’ve learned that the economy has been contracting even faster than previous estimates. So by their own reasoning, the economy has room to absorb 3 to 4 times as much spending (and not spending that money will mean a harsher and longer recession).
I do not know if Obama held back for political reasons, or because they could not find enough projects that were ready to put people to work, but the result may be higher-than-necessary unemployment and a longer downturn. In the worst case he may have to go back for more spending later, when comparatively less would have done the job if spent sooner. [By the same token, a $550 billion stimulus would have done more good in October than it’s going to do now.]
As for the financial crisis, it looks to me like a matter of inertia — AIG and these banks were in big trouble before Obama took office, and we’re only now seeing how big the problem is. The banks (and AIG, and the rating agencies) are the primary ones to blame for the crisis, but they’re critical to the economy, so that puts Obama in the politically unpopular position of having to throw taxpayer money at the bad guys for the good of the country. The fallout from that may eat away at his political capital enough to restrict his freedom of action in other areas.
The Romers are Keynesians. They have models much like global warming advocates have models. That means they are using us as guinea pigs to prove their theories. Too bad for us.
“The banks (and AIG, and the rating agencies) are the primary ones to blame for the crisis”
You forgot Congress. Since they set up the game, they bear more than a little responsibility. Why do lefties always blame business when it reacts to what the government puts in place?
My biggest fear at this point is that the continuing collapse of the financial system might swamp everything else he is trying to do.
So long as this is thought of as a bug and not a feature, then the collapse will continue and be far deeper.
Why do lefties always blame business when it reacts to what the government puts in place?
By this logic the government should be blamed whenever anyone does anything destructive that was not explicitly prohibited beforehand. Which implies that we should use the precautionary principle for business regulation. Would you really want that? I wouldn’t, and I’m supposed to be the statist here! I think that businesses should have the flexibility to try new things, and rise or fall on the results, but that it’s on them to make sure they don’t take the rest of us down with them.
What the banks and AIG did was extremely dangerous, both to the economy as a whole and to the banks themselves. They did it anyway because they either did not understand the risk, or thought the short term returns were worth it. We’d all be better off if the government had recognized what was happening and stepped in much earlier. Greenspan deserves some blame for not only not recognizing the danger, but even encouraging the housing bubble. Neither party in Congress recognized the danger, and both had powerful supporters with interest in inflating the bubble. The Bush administration was a cheerleader for home ownership, and was if anything less interested in financial regulation than the Clinton administration had been (which is saying something).
The banks’ (and perhaps Greenspan’s) sins were sins of comission; the government’s sins were sins of omission.
[Note: This doesn’t align with my political preferences — I’d love to blame it all on Bush and the GOP, but the facts don’t support that interpretation.]
> Which implies that we should use the precautionary principle for business regulation. Would you really want that?
Yes, but then I understand what the “precautionary principle” is.
> I wouldn’t, and I’m supposed to be the statist here!
Of course Jim wouldn’t, because the precautionary principle is that you don’t do something until you can prove that it’s safe (and possibly effective).
Proving that a given biz regulation is “safe” is a restriction that no statist would accept.
Or, is Jim of the belief that “biz regulation” is something that allows a biz to do something? Is Jim really a “that which not explicitly allowed is forbidden” sort?
Andy: I was referring to applying the precautionary principle to business activities, not to business regulation. FWIW, I’m opposed to both.
The most disturbing factoid of the week: according to today’s Rasmussen daily tracking poll, 42% of Americans “Strongly Approve” of the way Obama is performing as President.
Forty-two percent. Astounding. The bizarre topsy-turvy ignorance of “Jim” is apparently quite widespread.
Jim writes “My biggest fear at this point is that the continuing collapse of the financial system might swamp everything else he is trying to do” — as if collectivization of the economy were not already a known risk factor for economic collapse. He is causing the collapse, Jim. Not Rush Limbaugh. Not George W. Bush. The market is simply responding rationally to the probability that future revenue streams will be confiscated by the government through higher taxation, or diluted by the hyperinflation that is likely to accompany a deficit over 10% of GDP.
Memo to Jim (and H): those knobs you’re turning don’t do what you think they do. Please step away from the control panel.
BBB
“By this logic the government should be blamed whenever anyone does anything destructive that was not explicitly prohibited beforehand.”
You ARE the statist here and this doesn’t apply. Government meddled in the business of lending money to so great a degree that it skewed the normal correcting events. Business didn’t create the climate, government did and applied some coercion with the false idea they knew what they were doing. I can blame business for a lot of things but this isn’t one of them. Nationwide finacial events are almost always the result of or exacerbated by government action.
Bill: I think you are wrong. The government did not invent credit default swaps and collateral debt obligations. The government did not tell rating agencies to give bundles of risky mortgages AAA ratings. Those financial instruments were responsible for inflating the bubble (because they created the supply of risky mortgages) and, more importantly, they are the reason we are seeing a global financial crisis and not just a bunch of home foreclosures. The problem is much bigger than the bad loans. All the mortgages in the country add up to $11 trillion, but by the end of 2007 there was over $62 trillion in (completely unregulated) credit default swaps that depended on the housing bubble never popping.
For one of the clearest explanations, search for “The Crisis of Credit Visualized” or Q0zEXdDO5JU at YouTube. Or listen to the Alex Blumberg’s This American Life segment on “The Giant Pool of Money”. Or read “Recipe for Disaster: The Formula That Killed Wall Street” in Wired (available online).
Nationwide finacial events are almost always the result of or exacerbated by government action.
That’s a statement of ideology, not an argument. Read up on what actually happened.
Jim, in re the stimulus, what you need to do is explain the following:
Suppose my business suddenly loses some major customers and a lot of income, and the CEO tells me I need to take a 6% pay cut. I go home glum, because I’ve been expecting my pay to go up, and as a consequence I’ve been charging all kinds of stuff to my credit card, expecting my future pay increases will pay for it all. I’m awash in debt and facing an unexpected sudden contraction in my income, for an unknown length of time, just like the nation as a whole.
Now what? Well, just as I sit down, I see a new credit card offer from a Chinese bank has come in the mail. There’s the solution! I’ll just sign myself up for more credit, and borrow the extra 6% of my salary I’ll be missing. Problem solved!
Or, let’s suppose I am the CEO, and I realize the company’s revenues are going to be down 6% this year. Unfortunately, we’ve been assuming much more positive growth, and based on that, have taken out a whole passel of loans. We’re deeply in debt already. Look like we might have to fire people, squeeze into a smaller space, cut expenses…
But wait! Here’s a thought! This Chinese fellow was in last week, offering to lend the firm a whole pile of money, if he got a seat on the board. Why don’t we just borrow a giant amount of cash from him? Furthermore, let’s not just borrow what we need to cover existing expenses, because that won’t solve the problem with our drop in income.
We get income from the work of our employees, of course. So what’s needed are more employees! What kind? Who cares! Anybody, doing anything! Obviously anybody working for the company is adding value to our product, so company earnings should pick up. I’ll just borrow an additional few $million from the Chinaman, and use it to hire people to do whatever comes to mind, whatever I might like. Personal masseuses for upper management. People to make coffee all day, stuff like that. Problem solved! Next year, we’ll all be rich.
Both of those scenarios should hopefully strike you, as they would any of us, as complete and utter folly. What you need to explain is how what the Federal government is now doing for the nation is obviously different. Because, frankly, with all your (and their) airy talk about “job creation” and “stimulus” and other such cheerful blather, if I compare what the government is doing to what I would do if something similar happened to me — it looks like criminal irresponsibility and wishful thinking.
The government did not tell rating agencies to give bundles of risky mortgages AAA ratings.
No. They told lenders that they would back risky borrowers, thus making the relative risk of lending to say someone with a C rating seem the same as lending to someone with an AAA rating. The notion being that come of those C-rated borrowers just fell on hard times or were just starting out. Yet many of those people had justly earned their rating, but who cares when the government offers to insure lenders in those cases? Well, until the well runs dry at Freddie and Fannie.
Carl: If I told you that the way out of a severe economic downturn was to borrow huge amounts of money, ration private consumption, and devote a huge fraction of the country’s natural resources and productive capacity to building things that would then be set on fire, sunk in the ocean, or otherwise destroyed, you’d call that “complete and utter folly.” And yet WWII ended the Great Depression.
Leland: No, the government did not back most risky borrowers. Most sub-prime loans were not underwritten by Freddy/Fannie — F/F only got into the market after private lenders (who, incidentally, were not subject to the CRA) started taking F/Fs market share. And F/F did not slice its mortgages into CDOs, or gamble in the credit default swap market — they didn’t have to, because their loans already had the government’s guarantee.
We’d be slightly better off if F/F hadn’t made risky loans with government backing, but F/F had nothing to do with the financial collapse. The F/F collapse only cost us the value of the defaulted mortgages (minus the value of the homes); the Wall Street collapse is costing us many times that, and is not as easily remedied because the transactions infected the entire financial system.
And yet WWII ended the Great Depression.
It didn’t do it by manufacturing things and then destroying them. It did it by a) drafting a significant fraction of the work force, taking them off the unemployment roles and b) ending the disastrous New Deal policies of keeping prices and wages too high, which ended up not being put back in place after the war (Roosevelt being dead and not in a position to complain). The Depression ultimately ended because the government ended a lot of the thirties tinkering with the economy that was keeping it sick.
Jim, that’s not an answer to my question so much as a piece of misdirection. You haven’t told me why, contrary to common sense, what the Obama government wants to do make sense. You’ve just said hey, in these other circumstances FDR did something that doesn’t seem to make any more sense as a cure for depression, and that turned out OK.
This is like the medieval physician proposing to the cancer patient that he be treated by having a mercury enema. When the patients asks why that’ll do good, the doctor shrugs, says Beats me, but once this other time I bled a patient, and he got better afterward. If one seemingly crazy random intervention works, why not another? Not very persuasive.
There are a whole host of things that happened during the Second World War. Some of them — hugely increasing working hours while suppressing wage rises, a wave of patriotic devotion to increasing working hours while decreasing consumption, forced decrease in consumption, massive overseas demand for American products — would indeed seem directly related to economic improvement, belt-tightening in expenditures, increased labor productivity. Others, government deficits, your mentioned destruction of materiel, not so much. (It’s maybe worth remembering that most of the military material manufactured in the 40s was not destroyed, but served the US armed forces for decades afterward.)
One factor that doesn’t seem likely to be related to the eventual recovery is government planning of the economy and deficit “stimulus” spending — because Roosevelt had tried those things for the 10 previous years, and they’d not worked at all. So whatever “worked,” it must have been something that was different during the war than during the New Deal era. Show me those differences — what did the war change about the New Deal — and you might have put your finger on the key.
Unfortunately, deficit “stimulus” spending most definitely is not a key difference between 1943 and 1933. If it was what worked in 1943, it would have already worked in 1933, and it didn’t.
> I think you are wrong. The government did not invent credit default swaps and collateral debt obligations.
Actually, it created demand for them. It told banks to buy insurance for their loan portfolios. The two forms that said insurance took were CDSs and CDOs.
Insurance, for those paying attention, is one of the most heavily regulated financial systems.
Then there’s the favorable tax and balance sheet treatment given to fannie mae and freddie mac stock. That treatment pretty much guaranteed that banks would overload on it, which guaranteed that they’d fail with fannie and freddie.
Jim, Jim. I have rarely encountered such an intelligent opponent. And one who disagrees with every political post that Rand makes. (As an aside, you may wish to consider posting an occasional approval. This will greatly aid your credibility.) I am amazed at the intellectual effort that goes into so many of your posts. Of course, they’re heavy in juicy rationalizations, but still. That someone would go to such extremes to maintain and defend their own opinions. But things are getting a bit desperate for you, aren’t they? Getting a bit wild in your writings, especially as evidenced in your first post in this thread.
And Carl Pham, I salute you sir, for taking Jim on, time after time after time. Your patience and attention to detail is admired!
Carl:
Ok, I’ll bite. You’re the CEO, and revenue has dropped so that you can’t afford to keep paying one of your employees, call him Joe. You expect revenue to come back up in a year or two. So your choices are:
A) Borrow money from China to keep Joe working.
B) Lay Joe off.
At first glance it’s obvious that B) is the right choice. You can’t sell the additional products that Joe would help produce, because for now the customers aren’t there. He could do other useful work, but it wouldn’t help your company enough to justify both his salary and the interest you will owe to China.
But you aren’t just any company, you are the U.S. government. So you have the best credit rating in the world, and can borrow money for almost no interest. That cushions the blow a bit. Because you are the government, you have made a promise to make sure that all your employees have a safety net of unemployment benefits, medical care, food stamps, etc. Those things wont cost you as much as Joe’s full salary, but they greatly reduce the savings from laying him off. And because you are the government, you aren’t in business to maximize profit for the company, you are in business to maximize the welfare of all your employees, including Joe. That means that you can justify modestly reducing the future earnings of the company in favor of greatly improving Joe’s quality of life in the short term. So the tradeoff between A and B is not so clear-cut.
And there’s another issue. When you lay Joe off, other companies will hear about it. They may wonder if their sales will drop as well, and they may start cutting back, and perhaps laying off their employees. Joe himself will certainly spend less, and that will affect the revenues of other businesses. Laying Joe off will contribute, in its small way, to a cycle in which consumers and businesses cut back, commerce slows, and prompts still more cutbacks. That possibility is far more frightening than having to pay back a borrowed salary — such a spiral could reduce your revenues so much that you’ll have to lay off many more workers, and cripple your ability to quickly recover once the crisis passes. The lines of causality are long and tangled, but if you could trace them you might discover that laying off Joe runs the risk of hurting your business far more than the debt you avoid by not paying his whole salary.
[It’s a bit of a silly metaphor, because companies shouldn’t act like the government, and the government shouldn’t act like a company. They have different options and different priorities.]
On a historical note, unemployment did drop substantially from 1933 (25%) to 1937 (14%), when Roosevelt changed course and tried to balance the budget. It would be just as fair to say that deficit spending worked from 1933 to 1937, but that there wasn’t enough of it. There was plenty from 1940 to 1945.
> It would be just as fair to say that deficit spending worked from 1933 to 1937, but that there wasn’t enough of it. There was plenty from 1940 to 1945.
Jim ignores the other change – FDR wasn’t just deficit spending, he was also waging a war on productivity. That ended right around the time that the US decided to become “the arsenal of democracy”.
The mystery of the great depression is why the economy took so long to recover. Changes in deficit spending don’t explain that. The war on productivity does.
Note that FDR campaigned against Hoover’s deficit spending but continued and expanded it once he got into office. FDR didn’t campaign against Hoover’s war on productivity and continued it. (Hoover, being a progressive, wasn’t actually that far from FDR politically.)
Note that Obama is waging a war on productivity.
Was the Clinton 1993 tax hike a “war on productivity”?
Was the Clinton 1993 tax hike a “war on productivity”?
It was seen as such. Voters fought back by voting in a Republican Congress the following year. Funny how history repeats itself when people fail to study history.
So Clinton declares war on productivity, and productivity soars, the stock market booms, and the nation runs its first post-war surplus. Isn’t that the sort of thing you’d want to repeat?
Clinton’s attempted war on productivity and prosperity failed, thwarted by a Republican Congress. Note that there was no surplus in his first two years in office, or even a coherent plan for one.
FDR’s war on productivity was minimum price laws, labor regulations, and the like. He had govt thugs dumping milk onto the ground.
You had to have the approval of a commisar to produce stuff.
http://newsroom.ucla.edu/portal/ucla/FDR-s-Policies-Prolonged-Depression-5409.aspx?RelNum=5409