A group of economists asked to assess the efforts of both Obama and Geithner were none too impressed:
U.S. President Barack Obama and Treasury Secretary Timothy Geithner received failing grades for their efforts to revive the economy from participants in the latest Wall Street Journal forecasting survey.
The economists’ assessment stands in stark contrast with Mr. Obama’s popularity with the public, with a recent Wall Street Journal/NBC poll giving him a 60% approval rating. A majority of the 49 economists polled said they were dissatisfied with the administration’s economic policies.
On average, they gave the president a grade of 59 out of 100, and although there was a broad range of marks, 42% of respondents rated Mr. Obama below 60. Mr. Geithner received an average grade of 51. Federal Reserve Chairman Ben Bernanke scored better, with an average 71.
The big criticism has to do with “overpromising and underdelivering”:
[E]conomists’ main criticism of the Obama team centered on delays in enacting key parts of plans to rescue banks. “They overpromised and underdelivered,” said Stephen Stanley of RBS Greenwich Capital. “Secretary Geithner scheduled a big speech and came out with just a vague blueprint. The uncertainty is hanging over everyone’s head.”
The Hill reports that lack of progress is starting to really concern some Democrats in Congress:
Members of Congress and old political hands say [Obama] needs to show substantial progress reviving the economy soon.
Some Democrats have started to worry that voters don’t and won’t understand the link between economic revival and Obama’s huge agenda, which includes saving the banking industry, ending home foreclosures, reforming healthcare and developing a national energy policy, among much else.
While lawmakers debate controversial proposals contained in the new president’s debut budget — cutting farm subsidies, raising taxes on charitable contributions, etc. — there is a growing sense that time is running out faster than expected.
Democrats from states racked by recession say Obama needs to produce an uptick by August or face unpleasant consequences. Others say that there is more time, but that voters need to see improvement by the middle of next year.
The most optimistic say Obama and Democrats in Congress will face a political backlash unless the economy improves by Election Day 2010.
Of course, as mentioned previously, it becomes increasingly clear that he, Geithner and others really don’t know what to do about all of this. And careful and objective analysis of the money promised in both the bailout and stimulus see the former not accomplishing the bailout hoped for and the latter not being at all properly targeted to stimulate the job creating, wealth producing private sector.
And Democrats are right – the sausage making legislative process is of little interest to most Americans, especially those in trouble. They want results and they want them now. He promised to fix it and now they are going to expect results. There was no reality in his promises so it is rather difficult to understand why the American public which elected him should suddenly understand the reality of the situation. He promised, they took him up on it, now he has to deliver.
That’s the downside of actually winning after making a raft of promises that reality won’t let you keep.
This is just pathetic:
President Barack Obama signed a $410 billion spending bill Wednesday that includes thousands of pet projects inserted by lawmakers, even as he unveiled new rules to restrict such so-called earmarks.
At the same time, after Democrats criticized former President George W. Bush’s signing statements, Mr. Obama issued one of his own, declaring five provisions in the spending bill to be unconstitutional and nonbinding, including one aimed at preventing punishment of whistleblowers.
Presidents have employed signing statements to reject provisions of a bill without vetoing the entire legislation. Democrats and some Republicans have complained that Mr. Bush abused such statements by declaring that he would ignore congressional intent on more than 1,200 sections of bills, easily a record. Mr. Obama has ordered a review of his predecessor’s signing statements and said he would rein in the practice.
“We’re having a repeat of what Democrats bitterly complained about under President Bush,” said Sen. Arlen Specter (R., Pa.), who drafted legislation to nullify Mr. Bush’s signing statements.
The president said the spending measure should “mark an end to the old way of doing business.” His proposals, seconded by the House Democratic leadership, followed days of attacks by Republicans — and some Democrats — over the spending for local projects tucked into the bill.
This is an example of what I was talking about yesterday when I said Obama’s first 50 days was marked by a total lack of leadership.
Here was a chance to lead. After railing on the campaign trail against earmarks and wasteful spending, he signs a bill full of earmarks and wasteful spending and then, like a mom who yells, “boys, quit it” but never moves to enforce her words, Obama says “this should end the old way of doing business”. Really?
What’s the penalty? Another lecture after the signature? Had Obama vetoed the bill, he’d have sent the strong message necessary that his assumption of the presidency marked the end of “business as usual”. Instead he caved and created a fiction that this was the “old administration’s” business and therefore exempt from his pledge.
Talk about BS on a stick. If a president signs something into law his watch, it is his and not anyone else’s. To pretend anyone would actually believe that glib nonsense is incredible. But much of the MSM dutifully reported it as such.
He also pushed the fiction that if this bill wasn’t signed, the government would shut down. No it wouldn’t. Congress simply passes a continuing resolution which funds government at last year’s levels. But that’s not what he or Congress wanted. They wanted the 9,000 earmarks and the 8% increase in spending as well – thus the fiction about it being both necessary and last year’s business.
Then to put the proverbial cherry on the dissembling rhetorical sundae, Obama issues his own signing statement after making a press event about dissing Bush’s use of them.
The Drug War along the Mexican-US border is getting some high level consideration:
President Obama weighed in Wednesday on the escalating drug war on the U.S.-Mexico border, saying that he was looking at possibly deploying National Guard troops to contain the violence but ruled out any immediate military move.
“We’re going to examine whether and if National Guard deployments would make sense and under what circumstances they would make sense,” Obama said during an interview with journalists for regional papers, including a McClatchy reporter.
“I don’t have a particular tipping point in mind,” he said. “I think it’s unacceptable if you’ve got drug gangs crossing our borders and killing U.S. citizens.”
Already this year there have been 1,000 people killed in Mexico along the border, following 2008’s death toll of 5,800, according to federal officials who credit Mexican President Felipe Calderon for a crackdown on drug cartels.
But the spillover on the border — for example, to El Paso from neighboring Ciudad Juarez — has created a political reaction.
In a recent visit to El Paso, Texas Gov. Rick Perry called for 1,000 troops to protect the border.
Obama was cautious, however. “We’ve got a very big border with Mexico,” he said. “I’m not interested in militarizing the border.”
I agree with his point about not “militarizing the border”. And I certainly understand the desire to send in help to quell and control the violence that spills over the border. But my question is, how will the troops be mobilized? The only way Obama can send in National Guard troops as I understand it is by federalizing them. Then it becomes a matter of their role. The Posse Comitatus act prevents federal troops from being used in a law enforcement role except on federal property (like Washington DC). So he’s limited in the role to which he can commit any troops even if he wanted too.
It would seem instead, that perhaps the best way to proceed in this case, if the desire is to send NG troops to the border to help in law enforcement, is for the Governors to mobilize and send them while letting active military lend logistical, intel and perhaps advisory support. But unless they’re sent in a war-fighting mode, there isn’t much of a role for federal troops in this case.
UPDATE: Commenter Jay Evans notes a recent change in the law which may effect this (the John Warner National Defense Authorization Act for Fiscal Year 2007 (H.R. 5122)):
SEC. 1076. USE OF THE ARMED FORCES IN MAJOR PUBLIC EMERGENCIES. (a) USE OF THE ARMED FORCES AUTHORIZED.— (1) IN GENERAL.—Section 333 of title 10, United States Code, is amended to read as follows: ‘‘§ 333. Major public emergencies; interference with State and Federal law ‘‘(a) USE OF ARMED FORCES IN MAJOR PUBLIC EMERGENCIES.— (1) The President may employ the armed forces, including the National Guard in Federal service, to— ‘‘(A) restore public order and enforce the laws of the United States when, as a result of a natural disaster, epidemic, or other serious public health emergency, terrorist attack or incident, or other condition in any State or possession of the United States, the President determines that— ‘‘(i) domestic violence has occurred to such an extent that the constituted authorities of the State or possession are incapable of maintaining public order; and ‘‘(ii) such violence results in a condition described in paragraph (2); or ‘‘(B) suppress, in a State, any insurrection, domestic violence, unlawful combination, or conspiracy if such insurrection, violation, combination, or conspiracy results in a condition described in paragraph (2). ‘‘(2) A condition described in this paragraph is a condition that— ‘‘(A) so hinders the execution of the laws of a State or possession, as applicable, and of the United States within that State or possession, that any part or class of its people is deprived of a right, privilege, immunity, or protection named in the Constitution and secured by law, and the constituted authorities of that State or possession are unable, fail, or refuse to protect that right, privilege, or immunity, or to give that protection; or
‘‘(B) opposes or obstructs the execution of the laws of the United States or impedes the course of justice under those laws.
‘‘(3) In any situation covered by paragraph (1)(B), the State shall be considered to have denied the equal protection of the laws secured by the Constitution.
‘‘(b) NOTICE TO CONGRESS.—The President shall notify Congress of the determination to exercise the authority in subsection (a)(1)(A) as soon as practicable after the determination and every 14 days thereafter during the duration of the exercise of that authority.’’.
(2) PROCLAMATION TO DISPERSE.—Section 334 of such title is amended by inserting ‘‘or those obstructing the enforcement of the laws’’ after ‘‘insurgents’’.
It looks like it now depends on the classification of the problem.
Alan Greenspan has a piece in the Wall Street Journal today which essentially casts him as the Pontius Pilate of the financial crisis. Or, to sum it up rather sucinctly, “it wasn’t my fault”. You’re welcome to read through it and agree or disagree. However, the imporant point I think that should be taken from the Greenspan piece are the last two paragraphs:
Any new regulations should improve the ability of financial institutions to effectively direct a nation’s savings into the most productive capital investments. Much regulation fails that test, and is often costly and counterproductive. Adequate capital and collateral requirements can address the weaknesses that the crisis has unearthed. Such requirements will not be overly intrusive, and thus will not interfere unduly in private-sector business decisions.
If we are to retain a dynamic world economy capable of producing prosperity and future sustainable growth, we cannot rely on governments to intermediate saving and investment flows. Our challenge in the months ahead will be to install a regulatory regime that will ensure responsible risk management on the part of financial institutions, while encouraging them to continue taking the risks necessary and inherent in any successful market economy.
Those words reminded me of the quote I saw in business columnist Tom Oliver’s piece today in the Atlanta Journal Constitution:
“The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.” — F.A. Hayek
Any columnist who starts with a Hayek quote is guaranteed to get my attention. And I’ve come to enjoy Oliver’s columns. However, reviewing Greenspan’s advice and admonitions in those two paragraphs, juxtaposed against the simple and elegant truth of Hayek’s statement you find yourself back in the outback watching that big red kangaroo headed for a collision with the car. It is inevitable, there’s nothing you can do about it, they can’t or won’t hear your warnings and all you can do is watch – and cringe.
Frankly, as we watch the machinations of government and listen to their declarations, we have begun to understand that for the most part, those in charge of all of this haven’t a clue. As Oliver states:
Far from demonstrating the demise of free enterprise, this long-running, deepening recession is revealing the limitations of government.
Government, in its various yet powerful incarnations, has been offering one fix after another since August 2007.
The more the Fed and Treasury have tried, the less sure they seem and the more nervous the money makers have become.
It’s understandable that folks would look to the new administration for new ideas. So it’s harder than usual to acknowledge that the ideas are in fact pretty old and, having been tried, found wanting.
Whatever one may think about the so-called stimulus, it’s too easily deconstructed as pork and policy initiatives.
And if it’s still debatable whether to nationalize the financial industry, the move to nationalize health care, education and energy can hardly be disguised as economic recovery programs.
It is understandable that those who derive their power from government would use this recession as an excuse to further government’s reach. But they act as if government has been absent — as if they’ve been absent — from the role of regulator and legislator.
He’s precisely right – it wasn’t a problem with lack of regulation or lack of legislation. It was a lack of proper regulatory oversight and a willful decision by legislators to ignore the building crisis coupled with government distorting the market and actually incentivizing risk taking far beyond that which is prudent that led us here. And now that they have us in this position, all of them, Greenspan included, are engaged in a flurry of finger-pointing and name calling at every one but the right ones. This wasn’t a crisis which happened in just the last 6 months or 8 years. This one has been building for a while.
“The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.” — F.A. Hayek
We had Democrats in charge and then we had Republicans. Again and again.
Both endorsed and encouraged the subprime sleight-of-hand. Both appointed heads of the regulatory agencies that could’ve stopped the poison seeping through our banks’ balance sheets. Both allowed gamblers to hedge and swap derivatives on top of derivatives that no one can explain and that are proving far more debilitating than the debacle they were insuring against.
Freddie Mac and Fannie Mae became toxic assets of the government while doing the bidding of congressmen who now act like the piano players in a brothel.
The Federal Reserve proved to be anything but reserved, instead stoking a fire that burned us all.
These were not the result of idle hands of government, but rather deliberate deeds that created false markets with inflated credit while turning a blind eye to those who finance election results.
Oliver’s characterizations are dead on – and he’s nailed both the fed and the Congress. The most irritating thing to me about this whole mess, other than the obvious huge loss of wealth, is the success those who were responsible for writing the rules, laying out the playing field and calling the game are escaping both blame and punishment for what they’ve brought about. That toad Barney Frank having the chutzpa to talk about prosecuting those who were guilty of getting us in this mess still astounds me. If anyone should be undergoing such prosecution right now, it is he and numerous other congressmen and women, both past and present.
Oliver concludes as follows and I can’t help but say a hearty “amen” to what he has to say:
We periodically recoil in horror at government’s failure to protect foster children or care for veterans or the mentally ill. But then we turn around and assume government will perform better in areas more complicated.
Why does the failure of government so often lead so many to believe we need more government?
Like the hair of the dog for the alcoholic, it may calm the trembling hands for a moment but it inevitably leads to another spree and another hangover.
We’re headed into a “or worse” moment. No one in government is going to listen to Alan Greenspan’s admonitions or believe Tom Oliver’s brief accounting of the history of this crisis. Instead we’re going to see precisely the opposite happen – more regulation, more strings, more intrusion, more control. And, as Hayek said, we’ll again see “how little [men] really know about what they imagine they can design.”
Because the Secretary General has it – and demonstrates again why we ought to let the Third World Debating Club on the Hudson find a new home:
A day after his White House meeting with President Barack Obama, U.N. Secretary-General Ban Ki-moon called the United States a “deadbeat” donor to the world body while making the made the rounds on Capitol Hill.
“He used the word ‘deadbeat’ when it came to characterizing the United States. I take great umbrage (over) that,” Ileana Ros-Lehtinen, the panel’s senior Republican, said after an hour-long, closed-door meeting. “We certainly contribute a whole lot of U.S. taxpayer dollars to that organization. We do not deserve such a phrase.
Interviewed after the session, Ban said he had wanted to draw attention to the fact that the U.S. agrees to pay 22 percent of the U.N.’s $4.86 billion operating budget, but is perennially late with its dues — and now is about $1 billion behind on its payments.
That figure is “soon to be $1.6 billion,” Ban emphasized. Asked if he’d used the word ‘deadbeat’ during the meeting, he replied, “Yes, I did — I did,” then laughed mischievously.
The ultimate deadbeat institution which can, unsurprisingly, find more ways to waste money than the US government, calls the country that pays 22% of its cost and host to the parasites that represent their backwater potentates the “deadbeat” ?
Ban certainly demonstrates a lot of respect for the country and the new administration doesn’t he? So far this new relationship with the world is going swimmingly, as the UK can attest.
But there’s a glimmer of hope apparently. Ban has given Obama some budget advice:
Obama seeks a 9.5 percent increase in international affairs spending, which Yeo said would be enough to cover not only next year’s U.S. dues to the U.N., but also $1 billion in arrears.
Amazing. And we’ll end up handing it all over, just watch.
Both Camille Paglia and Howard Fineman give an assessement (although not presented as a 50 day assessment).
Paglia says, “free Obama from his advisors“:
Yes, free the president from his flacks, fixers and goons — his posse of smirky smart alecks and provincial rubes, who were shrewd enough to beat the slow, pompous Clintons in the mano-a-mano primaries but who seem like dazed lost lambs in the brave new world of federal legislation and global statesmanship.
Heads should be rolling at the White House for the embarrassing series of flubs that have overshadowed President Obama’s first seven weeks in office and given the scattered, demoralized Republicans a huge boost toward regrouping and resurrection.
The advice he has received certainly hasn’t been the best, and Paglia makes the point eloquently. She primarily goes off on two things that have hurt the administration’s reputation – the “stimulus” bill and the mishandling of the Gordon Brown visit. Both poorly done. And she’s not at all impressed with, nor does she think anyone else has confidence in what she calls “a shrill duo of slick geeks (Timothy Geithner and Peter Orszag) as the administration’s weirdly adolescent spokesmen on economics” .
President Obama — in whom I still have great hope and confidence — has been ill-served by his advisors and staff. Yes, they have all been blindsided and overwhelmed by the crushing demands of the presidency. But I continue to believe in citizen presidents, who must learn by doing, even in a perilous age of terrorism. Though every novice administration makes blunders and bloopers, its modus operandi should not be a conspiratorial reflex cynicism.
Notice another assessment that uses “overwhelmed”. Paglia charitably tries to write it off as something “every novice administrations” goes though. But is it really?
Paglia interestingly uses the Limbaugh kerfuffle as the ultimate case in point of how his staff has let him down. But she notes he wasn’t particularly smart about it either:
This entire fracas was set off by the president himself, who lowered his office by targeting a private citizen by name. Limbaugh had every right to counterattack, which he did with gusto. Why have so many Democrats abandoned the hallowed principle of free speech? Limbaugh, like our own liberal culture hero Lenny Bruce, is a professional commentator who can be as rude and crude as he wants.
Another bit of grumbling is being heard from Howard Fineman. In an article entitled “The Turning Tide“, Fineman notes “Obama still has the approval of the people, but the establishment is beginning to mumble that the president may not have what it takes.”
Not just the establishment -many in the big mushy middle who became enthralled with the cult of Obama without understanding the Obama agenda are now displaying a little buyer’s remorse.
But Fineman’s critique has to do with how the “establishment”, which he contends still holds enormous power, views the Obama presidency to this point. As with most of the elite media, he waves off the popular sentiment which is, for the most part favorable, and essentially claims it is the “establishment” which will make or break this president. By that, of course, he means the elite media, the money men and politicos. However, that said, his assessment is interesting:
They have some reasons to be concerned. I trace them to a central trait of the president’s character: he’s not really an in-your-face guy. By recent standards—and that includes Bill Clinton as well as George Bush—Obama for the most part is seeking to govern from the left, looking to solidify and rely on his own party more than woo Republicans. And yet he is by temperament judicious, even judicial. He’d have made a fine judge. But we don’t need a judge. We need a blunt-spoken coach.
For all his rhetorical skill, that’s something Obama can’t pull off. He comes off as preachy, and with his lack of experience, no one with any sense would accept him as a coach who’s been there, done that and is now helping the rest of us achieve certain results. He just doesn’t have the authority of experience to sell that. And what is going on around him, such as the poorly handled nomination process, makes any attempt by him to assume that role even less authoritative. Even those he does have on board, such as the “shrill duo of slick geeks” as Paglia calls them, do more to hurt his image than help it.
Fineman goes on implicitly giving credibility to the belief that Obama may not be up to the job:
Obama may be mistaking motion for progress, calling signals for a game plan. A busy, industrious overachiever, he likes to check off boxes on a long to-do list. A genial, amenable guy, he likes to appeal to every constituency, or at least not write off any. A beau ideal of Harvard Law, he can’t wait to tackle extra-credit answers on the exam.
In the meantime events pop up and multiply, issues expand and reality barrels on. And the “establishment” is getting antsy. Because what the establishment isn’t seeing from their chosen son is something he’s never had reason or cause to display – leadership. What Fineman dances around with this “beau ideal of Harvard Law” and “blunt coach” characterizations is Obama doesn’t seem to understand the basic tenets of leadership. It has nothing to do with jetting around the country on the perpetual campaign, or excellent but basically empty speeches. It means taking charge of the process and spending less time in Columbus, OH and more time leading Congress and his cabinet heads in the direction he wants to see things go.
Instead he’s essentially turned foreign policy over to Hillary Clinton and his domestic agenda over to a Congress which simply cannot control itself while he and his staff pick rhetorical fights with talk-show hosts.
Fineman lays out a list of things to this point which aren’t playing particularly well among the “establishment”. Again, these are Fineman’s list:
-The $787 billion stimulus, gargantuan as it was, was in fact too small and not aimed clearly enough at only immediate job-creation.
-The $275 billion home-mortgage-refinancing plan, assembled by Treasury Secretary Tim Geithner, is too complex and indirect.
-The president gave up the moral high ground on spending not so much with the “stim” but with the $400 billion supplemental spending bill, larded as it was with 9,000 earmarks.
-The administration is throwing good money after bad in at least two cases—the sinkhole that is Citigroup (there are many healthy banks) and General Motors (they deserve what they get).
-The failure to call for genuine sacrifice on the part of all Americans, despite the rhetorical claim that everyone would have to “give up” something.
-A willingness to give too much leeway to Congress to handle crucial details, from the stim to the vague promise to “reform” medical care without stating what costs could be cut.
-A 2010 budget that tries to do far too much, with way too rosy predictions on future revenues and growth of the economy. This led those who fear we are about to go over Niagara Falls to deride Obama as a paddler who’d rather redesign the canoe.
-A treasury secretary who has been ridiculed on “Saturday Night Live” and compared to Doogie Howser, Barney Fife and Macaulay Culkin in “Home Alone”—and those are the nice ones.
-A seeming paralysis in the face of the banking crisis: unwilling to nationalize banks, yet unable to figure out how to handle toxic assets in another way—by, say, setting up a “bad bank” catch basin.
-A seeming reluctance to seek punishing prosecutions of the malefactors of the last 15 years—and even considering a plea bargain for Bernie Madoff, the poster thief who stole from charities and Nobel laureates and all the grandparents of Boca. Yes, prosecutors are in charge, but the president is entitled—some would say required—to demand harsh justice.
-The president, known for his eloquence and attention to detail, seemingly unwilling or unable to patiently, carefully explain how the world works—or more important, how it failed. Using FDR’s fireside chats as a model, Obama needs to explain the banking system in laymen’s terms. An ongoing seminar would be great.
-Obama is no socialist, but critics argue that now is not the time for costly, upfront spending on social engineering in health care, energy or education.
Of course on the other side of these points are those that argue that the stimulus bill was poorly designed and will do nothing to stimulate the economy while ballooning the debt and inviting hyper-inflation as a result. They’d also argue that $275 home-mortgage-bailout rewards bad behavior and that when Obama claimed the pork laden, 9,000 earmark omnibus spending bill was the “last administration’s business” he gave up any hope of being in the same county as the “moral high ground”. Etc., etc.
In essence, the first fifty days can be summed up fairly easily in three words: lack of leadership. And leadership ability isn’t something the tooth fairy delivers one night along with the quarter for your tooth. That is what has the “establishment” mumbling in their martinis.
I had to laugh, however, at how Fineman ended his piece:
Other than all that, in the eyes of the big shots, he is doing fine. The American people remain on his side, but he has to be careful that the gathering judgment of the Bigs doesn’t trickle down to the rest of us.
Talk about “side-steppin'” and damning with faint praise.
But I have to wonder if Fineman’s title, “The Turning Tide” isn’t somewhat of a threat to the Obama administration if it doesn’t get its act together and do so quickly. As in-the-tank as the media was for Obama, they’re now realizing that it was their credibility they sold short if he isn’t successful. But there is only so much, in this era of the new media, they can do to spin what is happening positively. Fineman is issuing a warning of sorts – we can do this for a little while longer, but at some point it is going to turn, and it won’t be pretty.
The narrative that is now building is one of an administration overwhelmed, still in a campaign mode and rudderless. It began with the UK’s Telegraph last week and it seems to be gaining momentum. Unless Obama and the administration can do some pretty fancy work over the next 50 days, he may emerge from his first 100 days with that being the conventional wisdom. If so, he’s going to have a long 4 years ahead of him.
UPDATE: Interesting Gallup Poll – totally average:
David Brooks had started down the road to Damascus when he was called back into the fold by Dear Leader. His Op-Ed in today’s NYT is the result.
Most of Brooks’ offering is a rather transparent attempt to shame congressional Republicans into supporting Pres. Obama’s agenda:
The Democratic response to the economic crisis has its problems, but let’s face it, the current Republican response is totally misguided. The House minority leader, John Boehner, has called for a federal spending freeze for the rest of the year. In other words, after a decade of profligacy, the Republicans have decided to demand a rigid fiscal straitjacket at the one moment in the past 70 years when it is completely inappropriate.
The G.O.P. leaders have adopted a posture that allows the Democrats to make all the proposals while all the Republicans can say is “no.” They’ve apparently decided that it’s easier to repeat the familiar talking points than actually think through a response to the extraordinary crisis at hand.
There are myriad problems with Brooks’ line of reasoning, including many in just to two foregoing paragraphs (e.g. How much input did Republicans have into the recent legislation? By “adopted a posture” is he referring to “not having control of either the House or the Senate”?), but I wanted to focus in on a couple of points in particular.
After some platitudinous admonitions, Brooks launches into his prescription for Republicans to save capitalism:
Third, Republicans could offer the public a realistic appraisal of the health of capitalism. Global capitalism is an innovative force, they could argue, but we have been reminded of its shortcomings. When exogenous forces like the rise of China and a flood of easy money hit the global marketplace, they can throw the entire system of out of whack, leading to a cascade of imbalances: higher debt, a grossly enlarged financial sector and unsustainable bubbles.
I really don’t know what point Brooks thought he was making, but he failed miserably on any score. First of all, “exogenous forces” cannot be “weaknesses” and/or “shortcomings” with capitalism since, by definition, they come from outside that system. At best, examining such forces can be used to understand better ways of protecting capitalism from them. In the context of the entire Op-Ed piece, however, it appears that Brooks is pitching the tired line that capitalism must be reigned in so that people don’t get hurt. That’s like diagnosing the problem with house, finding termites, and then thinking of ways to protect the termites from the house.
Furthermore, Brooks cites a “flood of easy money” (which, of course, is caused by government) as an example of an exogenous force, and then lists the following “shortcomings” of capitalism: “higher debt, a grossly enlarged financial sector and unsustainable bubbles.” What do any of those things have to do with capitalism? If anything, these are once again a failure of government skewing incentives.
In fact, when the government does its darnedest to make the cost of borrowing money historically low, people would be really stupid not to take advantage of that. We all know that rates fluctuate, and that the cost of money will be more expensive when they go back up. Logically therefore, it only makes sense to borrow when the Fed turns the money spigot on and then to find some sort of an asset to grow that money in. That, of course, is what leads to bubbles as everyone has barrels of money but not as many clear ideas of what makes a good investment. Instead of taking the time to really investigate what opportunities are available, and which ones fit a particular person’s portfolio, the herd mentality takes over and we all tend to keep up with the Jones and Smiths whether that means buying tulip bulbs or a run-down house we intend to flip.
The bottom line, however, is that these sorts of scenarios start with government intervention into the market place. In addition to turning on the money spigot, the federal government was also encouraging lenders to make high-risk loans, and for the Freddie Mac and Fannie Mae to buy them up, securitize them and sell them into the derivatives market. Again, that’s all fine and dandy (until it it all goes to hell), but it has nothing to do with “weaknesses” and “shortcomings” of capitalism, and everything to do with government sticking its big fat honker where it doesn’t belong.
If the free market party doesn’t offer the public an honest appraisal of capitalism’s weaknesses, the public will never trust it to address them.
The “free market party”? Who does he think he’s kidding here? The Republicans haven’t acted like a free market party since … well … it’s been so long I can’t remember.
Moreover, I simply can’t fathom how Brooks thinks a “free market party” would ever be able to reconcile itself to joining hands with Obama on his completely anti-capitalist agenda.
Power will inevitably slide over to those who believe this crisis is a repudiation of global capitalism as a whole.
Earth to Brooks: that’s already happened. Look who the president is for crying out loud, or take the time to read your own newspaper. Each and every day we hear about how the excesses of capitalism caused this crisis, and how the “libertarian” policies of Bush (HA!) have landed us in this awful spot. Capitalism didn’t get a trial, Mr. Brooks, it was rounded up, convicted and summarily shot as soon as the latest grand experiment in government do-goodism failed (again).
What is going on with the Charles Freeman nomination, and is it an indicator of a overwhelmed administration losing control? Who, exactly, is in charge there?
Frankly, approaching 45 days into this administration, the transition process, at least as it pertains to critical nominations, has been an unmitigated disaster. But it is the Freeman nomination which begs the question “who is in charge”. Charles Freeman has been nominated for the chairmanship of the National Intelligence Council (NIC), the organization in charge of preparing our most sensitive intelligence estimates.
Obama’s Director of National Intelligence Dennis C. Blair apparently never ran the nomination by the White House. That means Freeman has never been formally vetted. Now this may all fall back on Blair, but you have to wonder what sort of guidance or lack thereof provided him with the belief that this was the way things worked?
More importantly, why did Blair decide Freeman was the man for the job? A former ambassador under George H. W. Bush, to Saudi Arabia and senior envoy to China, Freeman is seen by many as having very serious conflicts of interest which were apparently ignored. Freeman was also a board member the China National Offshore Oil Corp (CNOOC) owned in majority by the Chinese government and other Chinese government agencies. And there are other financial ties which are suspect. Freeman is president of the nonprofit educational organization Middle East Policy Council (MEPC), which paid him $87,000 in 2006, and received at least $1 million from a Saudi prince. You can read about the ramifications of those connections here.
But its not just who Freeman has been connected with, but some of the statements he’s made that make one wonder about his objectivity and, frankly, his moral and ideological foundation. This is a person who remarked that the Chinese government had shown too much “restraint” when putting down the Tiananmen Square protests in 1989. And in testimony before the 9/11 Commission, he advocated the use of a national identity card. After all the wide-spread panic from the left concerning the Bush years and the claim that he was leading us down the path to totalitarianism, this seems like the type of person the left would really find unacceptable for a position.
Then there is the Congressional side of the question. Jennifer Rubin asks:
Does Diane Feinstein think Freeman is an acceptable pick? It is interesting to note how lacking in — what’s the word? ah yes — “oversight” the government is now that Congress and the White House are controlled by the same party. Imagine if George W. Bush had nominated someone whose earnings depended on the largess of the House of Saud or who advocated crushing Chinese dissidents — indeed faster than the Chinese government.
And she further asks, is this the type of person who will give the administration “the “unpoliticized” advice they are looking for?”
Given what we know, I’d say no. However, this nomination is just one more in what can only be characerized as a shambles – Commerce, HHS, Treasury, questions about his housing czar and nominees for other Treasury posts jumping ship – that is the nomination process.
This points to a very inexperienced administration learning on the job in one of the more turbulent times in our history. That is not a good thing, folks, but exactly what was predicted given his lack of a resume. We’ve now seen the result of a campaign based on vacuous slogans. A campaign that was part demonization of the opposition and part beauty pageant. A campaign in which few focused on what the responsibilities of the office entailed and whether the candidate had the qualifications to fulfill them. We’re now “enjoying” what that brings.
UPDATE: Politico reports that Charles Freeman has withdrawn his nomination. Heh … that’s the fastest reaction I’ve ever had to one of my posts.
Warren Buffet on the economy and the effort of the government to “stimulate” it:
While praising efforts by Federal Reserve Chairman Ben Bernanke and others to stimulate the economy, he said the economy “can’t turn around on a dime” and that their efforts could trigger higher inflation once demand rebounds.
“We are certainly doing things that could lead to a lot of inflation,” he said. “In economics there is no free lunch.”
Funny how, when someone like Warren Buffet – who has been a supporter of Obama – says things like ‘trigger inflation’ and ‘no free lunch’, people who were previously playing the denial game (massive spending is necessary and good) suddenly figure there may be a problem. Meanwhile the laws of economics have continued to function despite the denial.
For the most part the press has ignored Buffet’s words and they’ve been downplayed by the administration. But perhaps if those who’ve been in denial are willing to consider Buffet’s warnings, they’ll be open to listening to others. Such as warnings about the double talk that’s been coming out of the Obama administration the past few weeks. For instance:
Confidence (too little) and uncertainty (too much) define this crisis. Obama’s double talk reduces the first and raises the second. He says he’s focused on reviving the economy, but he’s also using the crisis to advance an ambitious long-term agenda. The two sometimes collide. The $787 billion “stimulus” is weaker than necessary, because almost $200 billion for extended projects (high-speed rail, computerized medical records) take effect after 2010. When Congress debates Obama’s sweeping health care and energy proposals, industries, regions and governmental philosophies will clash. Will this improve confidence? Reduce uncertainty?
A prudent president would have made a “tough choice” — concentrated on the economy; deferred his more contentious agenda.
Instead he’s decided he’s not going to let a “good crisis” go to waste and pursue his very expensive agenda which has nothing to do with the economic crisis (or alleviating it). All the while he preaches about crisis, catastrophe, sacrifice, tightening belts and doing with less even as he plans to expand government beyond anything we’ve ever seen.
It is an amazing performance.
Yesterday on the podcast, we talked about Pres. Obama’s attitude towards certain aspects of his presidential responsibilities. Apropos of that discussion, he is receiving some criticism for his indifference to the markets.
Some Wall Street economists think President Obama could have voiced some sympathy about the plight of frightened shareholders when he compared the stock market’s plunge to an election tracking poll that “bobs up and down, day to day.”
They worry that the president is underestimating the important role the stock market plays in the economy’s performance, and that the markets’ precipitous slide is actually a vote of no confidence in the administration’s handling of the economy. There’s also a suspicion that Mr. Obama and his advisers think only wealthy people own stocks.
“There is some of that feeling that rich people are the ones who have stocks. He does have somewhat of that feeling. But you’ve got to remember that most people who own stocks aren’t rich,” said David Wyss, chief economist at Standard & Poor’s, the influential Wall Street financial research and forecasting firm…
…Mr. Wyss and some of his colleagues on Wall Street – where investors have lost trillions of dollars in savings and the market is not so much bobbing as dropping straight down – think Mr. Obama could have shown more concern for the markets, which represent the economy and signal its future direction.
During Mr. Bush’s tenure, there was constant criticism that he was “intellectually incurious”, e.g., he showed a lack of interest in the portions of his job he wasn’t required to be engaged in on a regular basis. I wouldn’t dispute those criticisms, of course, but it seems to be a trait that Pres. Obama shares with his predecessor.
Pres. Obama appears to be fascinated by aspects of politics such as “green jobs” and health care that aren’t actually part of the president’s core portfolio, while being uninterested in the foreign and military policies that are essential parts of the president’s purview.At the moment, we’re in the midst of an economic crisis–and I use the word intentionally–that stems from a credit bubble collapse. The stock market is a predictor of future earnings and profitability for private sector firms. As such, it tells you things about the expectations investors (which at this point includes more than half of the population) have about the future income that their investments will produce. What the collapse in the stock market tells us is that investors are voting with their money that future earnings will be substantially lower, meaning that firms all across the country will be less profitable.
What happens on a day-to-day basis, of course, may be subject to a variety of market whims and fancies, but long-term trends do indicate the direction of the economy. The market is a leading indicator. So when there are several straight weeks of decline in stock prices, the market is telling us something.
This seems not to be a reality that the president comprehends.
Instead, the president’s main focus seems to be on health care, green jobs, more policemen and prosecutors, and the like. All of which may be wonderful things, and none of which will happen if the economy implodes. To the extent the current crisis forces him to concentrate on economic policy, he appears to resent it.
Similarly, the president has made missteps in foreign policy this week. The Obama Administration apparently attempted to sell our Eastern European allies down the river by offering to shut them out of missile defense if the Russians cooperate on nuclear non-proliferation in Iran–until they got caught out on it. That was a major misstep.It was quickly followed by two minor missteps.
First was Sec. Clinton presenting the Russian foreign minister with a button which was supposed to say, in Russian, “Reset”, to symbolize the new engagement with the world the Obama Administration was supposed to bring about. What the button actually said was “overcharge” in Russian. On top of this, it’s generally a bad idea, symbolically, to present the Russians with a button to push of any sort, considering that the major foreign policy goal of the last half of the 20th century was to prevent the Russians from pushing “the button”.
Second was the treatment of Gordon Brown, the prime minister of the UK, during his visit. Rather than pulling out all the stops to showcase the visit of the head of government of what, by nearly any measure, is the United States’ most important ally, Mr. Obama treated it as if the Deputy Agriculture Minister of Azerbaijan had showed up on the White House’s doorstep. In what may be a first in my lifetime, the various press organs in Britain, from the commies at The
Spectator Observer, to the staid tories of The Times of London all agreed that Pres. Obama’s treatment of Mr. Brown amounted to an egregious snub of the United Kingdom.
In addition to the above, one has to note the retention of Sec. gates at the DoD, along with the retention of the great majority of the Bush Administration’s positions on executive privilege and the prosecution of the Global War on Terror.
What all of these things add up to is a picture of a president who is essentially uninterested in military policy, or foreign policy, or, really, economic policy, and who in effect simply ignores them to the extent he is able, and delegates their operation to his subordinates. What he cares about is government, and its ability to intervene in the marketplace, and to provide goods and services. It is in those areas where his interest and attention actually lie, and the remainder of the executive branch can, as far as he’s concerned, operate on auto-pilot.
Take all of the above together, and it appears to present an emerging picture of a man who is truly intellectually incurious, and who wishes to ignore, to the extent possible, those aspects of the president’s job that he doesn’t find personally appealing.
Sadly, he appears to be fascinated by aspects of politics such as “green jobs” and health care that aren’t actually part of the president’s core portfolio, while being uninterested in the foreign and military policies that are essential parts of the president’s purview.