A Hard Lesson In Obamanomics
James Pethokoukis blogs at Reuters about hope for change -- the hope we all have that we won't be on corners begging for it -- and how it's fading:
Obama took a tremendous economic and political gamble last January. The new president had the option of putting forward a stimulus plan that would attempt to reverse or significantly dampen America's terrible economic downturn ASAP. The quickest and most effective approach would have been a big cut in payroll taxes. For $800 billion, combined Social Security and Medicare taxes could have been slashed by 6 percentage points, or 40 percent. That would have put $1,500 in worker paychecks and, according to one credible study, increased employment by 4 million jobs in 2009.Instead, Obama chose to listen to Rahm "Never let a crisis go to waste" Emanuel and put forward an $800 billion plan that advanced his healthcare, energy and education policy goals -- but pretty much neglected the economy in 2009. Team Obama had to fully understand this. Indeed, a study from the Congressional Budget Office study -- when led by current Obama budget chief Peter Orszag -- concluded that an Obama-like economic stimulus package would be "totally impractical" because it would take so long to implement. (True enough, only seven percent of the American Recovery and Reinvestment Act has been doled out so far.)
Presidential gamble. In short, Obama wagered that the deluge of money coming from the Federal Reserve would do the heavy lifting as far as stabilizing the financial sector and keeping the already apparent recession from turning into a real disaster. Voters would, thus, continue to support his policies to assert more government control over healthcare, heavily regulate energy through a costly cap-and-trade program and further intervene into the financial industry.
The gamble appears to have failed miserably, both economically and politically. The terrible tale of the tape: a) the current downturn is arguably the worse since the Great Depression; b) household wealth has fallen by $14 trillion during the past two years, including the first quarter of 2009; c) while the economy may not shrink as much this quarter as it did in the previous three months (-5.7 percent) or the final quarter of 2008 (-6.3 percent), unemployment is soaring; d) Obama himself said the jobless rate will hit 10 percent this year; d) even worse, the Federal Reserve sees it approaching 11 percent next year. (Recall, that the original White House economic analysis of the Obama economic plan never saw unemployment exceeding 8 percent if Obamanomics was passed by Congress.)
Falling public support. So now many Americans are rightfully wondering just what they are getting for that $800 billion, as well as massive budget deficits as far as the eye can see.
Getting slowly fucked, and not the fun way, is how I'd put it.
Yes, but on the bright side, they've saved the banking industry from onerous regulation and lifted the wage caps from the highest earners, you know, the ones that caused this. So all in all, all good!
jerry at June 19, 2009 8:01 AM
I hear ACORN is hiring.
Pseudonym at June 19, 2009 8:34 AM
And we don't even get the courtesy of a reach-around.
Jeff at June 19, 2009 9:22 AM
So what? This early in the game (and for another six months, at least), one could still get away with blaming the whole thing on Bush.
Jeff, under those circumstances, I'm not sure I'd be worrying too much about courtesy (eeyuck!).
old rpm daddy at June 19, 2009 9:51 AM
I wonder ...
There's a story about Joseph Stalin pulling the feathers out one by one from a live chicken, then giving it some food. The chicken then followed him about the room wherever he went. He turned to his followers and said, "That's how you control the people ... you make them feel pain, then you feed them."
We keep looking at the stimulus package as if it were intended to cure the economic woes we are currently experiencing because that's how the Obama administration advertised it.
But what if that's not its real intent? What if it's a case of serving us cracked corn after we've had our feathers pulled out? Could that be why the major part of the "stimulus" will not take place until next year, after we've felt the pain and before the Congressional elections?
Just wondering ...
Kirk Strong at June 19, 2009 11:55 AM
I have to suspect "it's all Bush's fault" won't play too well next time around. By then, the Bush years will look like the good old days.
MarkD at June 19, 2009 12:01 PM
What I find amazing is how personally popular he remains despite deep opposition to the policies he's trying to implement. No doubt the good press he gets will help to keep that lifeboat afloat for longer than it should be above water but at some point the 'blame Bush' strategy will fail and if the press ever treats Barry O like they treated George W, it's going to get really ugly.
BlogDog at June 19, 2009 1:45 PM
Wouldn't it be an interesting coincidence if the last President of the USA was not even a US citizen?
He will definitely be a citizen of the new country which is coming soon. It's called the North American Union.
Here's another coincidence, what will replace the federal reserve dollar when it becomes totally worthless? Why, the Amero of course.
Will the US Constitution and Bill of Rights apply in this new country? No, it's a different country. The word is out that the NAU constitution will be modeled after the Soviet one, Comrade. This kind of runs parallel to the nationalization of the banks and the car companies.
Another parallel to this is when Bill Clinton did not deny that FEMA concentration camps were being built when questioned by a reporter from Newsweek back in 1995 on CNN. I think this video is now on YouTube.
SM777 at June 19, 2009 3:58 PM
SM777 - Adjust your tinfoil and take your meds.
brian at June 19, 2009 7:38 PM
Brian, ever heard of the State Dept?
I used to work there.............
SM777 at June 19, 2009 7:48 PM
Apparently Obama thinks that Americans can become wealthier by pouring huge sums of money down the toilet. Unfortunately the world doesn't work that way.
xyz at June 19, 2009 8:47 PM
Just because you used to work for a liberal toilet tank doesn't mean that there's an elaborate conspiracy to lock people up in concentration camps.
And if you're that concerned about it, you could always move to a country that is more friendly towards self-defense like Germany.
brian at June 20, 2009 6:04 AM
Brian,
Ever hear of Area 51? The ties it has with FEMA and DHS are, well, interesting.
old rpm daddy at June 20, 2009 7:46 AM
Yeah, I've heard of Area 51. The foils are convinced that the government is hiding extraterrestrials there. Which is bullshit.
I don't have time to keep on on all the latest government conspiracies. Mostly because the government is too incompetent to pull them off.
You honestly think the government that can't come up with a balanced budget is going to be able to round people up and put them in death camps?
I'll remind you that better than 50% of the populace is armed. Also note that nobody in Germany was before the deportations began.
Finally, most people will give up their guns one way: bullets first.
All in all, it doesn't look good for the government coming up with a plan to put us in concentration camps.
brian at June 20, 2009 12:00 PM
As long as we're on the fringe, may I suggest the novel "Patriots" by James Wesley, Rawles?
Especially loved the part about the UN invasion of Idaho.
Gog_Magog_Carpet_Reclaimers at June 20, 2009 1:33 PM
Actually I was going to say something silly, like how aliens are running the TSA (which would explain a great deal), but I forgot to deliver the punchline. Danged aliens!
old rpm daddy at June 21, 2009 6:33 AM
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