In Riegel's most recent (and excellent) rant the author Star Power wonders, "Perhaps more incredibly, Obama seems to think that government taking over an economy is a new idea. Or that massive growth in government can take place "with unprecedented transparency and accountability.."."
Such words and thoughts by Obama are heard frequently and point to the remarkable naivete of such a tough politician. His approach to governing sounds exactly like what you hear from academicians: I can name the problem, I can state the (hypothetical) answer, and therefore, it is just a matter of execution!
When you have lived in the real world and actually tried to make change, as opposed to just talking about change, you learn that "knowing" the answer isn't the hard part. Making it happen is the hard part. I think there is this very important element missing from Professor Obama's resume: he has never been responsible for managing a problem to a successful conclusion in his life (not counting getting elected, where is very clever and very good). It is all theory with him.
I readily acknowledge his oraorical gifts and the genius of his aspirational message. He is a veritable Pied Piper! But he lives in the abstract. Like an academician, he sees what can and (in his mind) should be and imagines therefore that it can be done. Since solutions to all problems are available in his mind, there is no reason he can't tackle everything at once. Hey, I think therefore it can be done is but a simple extension of I think therefore I am.
Did you see his goofy giddiness on 60 minutes, laughing about the bailouts and the constituencies, or lack thereof, for helping banks and the auto industries. It is a mind game with him! People's lives are melting and the fact that people disagree with his solution is literally funny to him! Hey, it's just a game! I've got time for March Madness brackets, I've already thought of the answers for universal healthcare. I've got time for Leno, 'cause if I can just sell my ideas they will come true.
When you can propose running a deficit in excess of 13% GDP one year and in excess of 9% the next year you are playing Texas Hold'em with our future economic well-being and you are going all-in. No person living in the real world would do it! The numbers are so high not because he is trying to avoid a depression. That would cost much less. The numbers are so high because of the massive social programs he is initiating at a time when it is unaffordable.
In Professor Obama's mind it is all possible. But he has shown that he and his staff can't manage effectively the banks or AIG, yet he wants to triple his activity set. His lack of experience as an executive is going to severely injure this country, because "eventually you run out of other people's money." We are headed for deep, deep trouble.
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5 comments:
Very good observations.
Okay, Hags -
What would you do? Your philosophical kin-folk have utterly ruined the economy with their supply-side tax cutting, deregulating, Laissez faire approach. What would you do that didn't qualify as the retread of a failed policy?
BTW, Hags, I agreed with a lot of your points, just not your conclusion. Obama is an academic and does not have much experience is getting things done. Lets all hope that he is able to overcome this fact.
Here is what I would have done. First, you have to make the banks better. I would have engaged with the toxic assets issue. Had it been me I would have bought lots of them already and not been worried about getting the price exactly right, because you can't get the price exactly right when there is no market because of over-riding fear. I would have been criticized for paying too much, but I would have made things start moving. The markets responded positively today because it appears Treasury is finally going to act.
I would let houses go bankrupt. The market will fix it. People who put down no equity weren't owners in my book, they were renters. Negative amortization, also BS. get out of the house and rent. For those unfortunate people who did nothing wrong except buy something they couldn't afford, I'm sorry but you lost. The market will find buyers for houses at going prices and peple will occupy or rent. The world won't end. Houses and banking are the key issues.
Obama can spend his stimlus plan on Democratic pork plans, but institutionalizing spending through new programs is detrimental at this time. The deficits he is signing up for are absolutely out of this world. We simply can't afford it.
The key to deficit elimination is growth of the PRIVATE sector, not government. Capitalizism is the Golden Goose. Even with our economic blowout, where else would you rather live or invest? Better regulation of the financial markets is necessary. Specifying slaries and bonuses is populist BS.
JMHO,
Hags
Amazingly, Hags, I agree with much of what you said, especially fixing the banks and buying up the toxics (many of which would have paid off just fine if held to maturity - perhaps by the SSA).
I also agree that the private sector must grow. Absent that, we can't afford much of anything from the public purse. I'm sure you don't like him, but Howard Dean makes this point all the time. Without fiscal responsibility there ultimately can't be any programs. At the end of the day, the bills must be paid.
I would have supported - much earlier - mortgage relief by way of lower interest rates + stretched amortizations (subject to bank approval - I wouldn't violate contracts). I'm not interested so much in helping the low equity homeowner as I am in his neighbors. Whole neighborhoods have been decimated by the foreclosure typhoon. In exchange for the relief I would have required full recourse on the debt. Too many people are voluntarily walking away with impunity.
Finally - any new Fan/Fred loans would require full recourse and states would need to adjust their laws accordingly. What choice do they have?
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