Archive for the ‘Great Depression’ Category

Obama Administration May Not Understand Economy

March 22, 2009

When it comes to our complex economy, President Barack Obama would do well to heed the physician’s ancient commandment to first “do no harm.”

Instead, Obama’s administration has been prescribing all sorts of multibillion-dollar borrowing remedies without any consistent diagnosis of what is exactly wrong with the weak economy or even how bad things actually are.

By Victor Davis Hanson
The Washington Times

Since becoming president, Mr. Obama has offered numerous bleak economic prognoses. He has told Americans: “The situation we face could not be more serious. We have inherited an economic crisis as deep and as dire as any since the Great Depression.” He has also warned, “Recovery will likely be measured in years, not weeks or months” and “If nothing is done, this recession could linger for years.”

But suddenly last week, physician Barack Obama flipped and issued an entirely new prognosis: “I don’t think things are ever as good as they say, or ever as bad as they say.” He added. “[Things] are not as bad as we think they are now.”

What happened to living through hard times akin to the Great Depression?

Maybe it was the unexpected news that Citibank and Bank of America are starting to show a profit – thanks to the past bailouts of 2008 and new profitable loans. Maybe it was General Motors’ recent decision not to (for now) ask for more federal cash. Maybe it was the reports that consumer spending is not down as much as feared.

Or did Mr. Obama’s change in rhetoric reflect a sort of premeditated strategy: talk down the economy to scare everyone into supporting more government spending and borrowing. Then, once the stimulus bill has passed, talk up the economy to reassure us that it will work?

Or, as seems more likely, does the new government simply not know what is going on – much less what to do about it?

It can’t seem to fill slots at the Treasury Department, and strangely talks about fiscal responsibility and the evils of pork-barrel spending while expanding upon the Bush budget deficit and approving more than 8,000 earmarks.

Mr. Obama – and Congress – should take a deep breath before further expanding the budget with ever-more stimulus spending, borrowing and aggregate debt that will plague our children, who will have to pay back the trillions long after this present recession ends.

Read the rest:
http://www.washingtontimes.com/new
s/2009/mar/22/first-of-all-do-no-harm/

Related:
Public Outrage Could Devour Obama Presidency

Financial Advice, Recovery, Trumped by Obama, Congress, Media, Polls

Protesters At Homes Of AIG Execs

Wall Street Journal: “Geithner Incapacitated;” President Voices Support

Government To Have Bigger Role in All American Lives; Obama Seeks to Increase Oversight of Executive Pay

Dodd Caper, House Vote on 90% Tax, Highlights Founders Hopes; Modern Reality

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53% Say It’s Likely the U.S. Will Enter a Depression

March 10, 2009

Most Americans (53%) now think the United States is at least somewhat likely to enter a 1930’s-like depression within the next few years.

The latest Rasmussen Reports national telephone survey found that 39% think this outcome is unlikely.

Nineteen percent (19%) say a Depression is Very Likely while 7% say it is not at all likely.

The latest results are more pessimistic than those found in early January, when 44% said a 1930’s-like depression was likely in the next few years, and 46% disagreed.

In March 2008, only 38% of adults said the country is likely to slip into a depression, while most (55%) disagreed.

The most recent survey also found that half of all adults (49%) say today’s children will not be better off than their parents. Only 26% hold the more optimistic view, while another 25% are not sure. Those results have changed little from January, when only 27% said children will be better off and 47% disagreed. Twenty-six percent (26%) were undecided at that time.

From Rasmussen:
http://www.rasmussenreports.com/public_content/b
usiness/general_business/53_say_it_s_likely_the_
u_s_will_enter_a_depression_similar_to_1930_s

Dems Already Have Excuses for Economic Failure

February 10, 2009

Even while calling for the urgent passage of the $800 billion-plus economic stimulus package, the Obama administration and its liberal allies are laying the groundwork to neutralize criticisms should it fail.

By Philip Klein
American Spectator

“[B]y the midterm elections we’re probably not going to see an economy that’s better than now,” former Clinton Labor Secretary Robert Reich conceded Sunday on ABC’s “This Week” with George Stephanopoulos. “I mean, not that the stimulus program will have failed, but that the stimulus program, even if it succeeds, will not actually kick in. It will not get the economy better than it is now. Without the stimulus, the economy could be far worse in two years than it is now.”

While he hasn’t been quite as explicit as Reich, President Obama has adopted the same line of reasoning as part of his public relations offensive to boost support for the stimulus package: a failure to act will make things worse, even if acting may not make things better — or at least not for a while.

President Obama is selling the plan as one that will “save or create” four million jobs, and he’s continued to hedge his statements on the upside potential of the legislation while portraying the dire consequences of inaction.

Last week, he wrote in a Washington Post op-ed that if Congress didn’t pass the stimulus package: “Our economy will lose 5 million more jobs. Unemployment will approach double digits. Our nation will sink deeper into a crisis that, at some point, we may not be able to reverse.”

On Monday, President Obama took his show on the road, urging an Elkhart, Indiana audience to get behind his plan, while cautioning them not to expect miracles.

“We know that even with this plan, the road ahead won’t be easy,” Obama said in his initial remarks at the town hall-style gathering. “This crisis has been a long time in the making, and we know that we cannot turn it around overnight. Recovery will likely be measured in years, not weeks or months.”

Then, in his first primetime press conference as president Monday night, Obama explained: “My administration inherited a deficit of over one trillion dollars. But because we also inherited the most profound economic emergency since the Great Depression, doing little or nothing at all will result in even greater deficits, even greater job loss, even greater loss of income, and even greater loss in confidence.”

What this means is that if the economy is still in trouble as the 2010 elections approach, Democrats will argue that eight years of Republican rule left the country in such awful shape that Democrats will need more time to clean up the mess. If unemployment is in the 7 percent to 9 percent range, they’ll say, without their policies, it would have been 12 percent, or perhaps higher.

While lawmakers are primarily interested in getting reelected, to liberal intellectuals who are constantly clamoring for more government spending, the failure of the stimulus package would represent another real-life example of the failure of Keynesian theory. That’s why they’ve been criticizing the plan from the left.

New York Times columnist Paul Krugman has led the way by arguing that the stimulus package is far too small.

“[I]f we look at the scale of the problem, the Congressional Budget Office says that we’re gonna have a hole in the economy, insufficient spending to the tune of $2.9 trillion over the next three years,” Krugman said on ABC’s “World News” this Sunday.  “And we’ve got a sort of $800 billion plan to cope with it. It’s actually quite a bit on the low side.”

Krugman has complained that the “sort of” $800 billion legislation has too many tax cuts, and that President Obama made too many concessions in an effort to win support of Republicans.

“You know, he did a tremendous amount of attempt at outreach and got zero for it,” Krugman lamented. “Absolutely nothing. And I hope he’s learned his lesson from that.”

In his Monday column, Krugman tore into the compromise legislation forged by centrists in the Senate. “I blame President Obama’s belief that he can transcend the partisan divide — a belief that warped his economic strategy,” Krugman snarled.

So for Krugman and other liberal ideologues, if the economy does not recover after an $800 billion government stimulus package, the excuse will be that Obama abandoned pure Keynesianism out of a misguided desire for bipartisanship.

But unlike Krugman, Democrats will have to face voters in the fall of next year, and if economic conditions do not improve, they’ll be forced to explain how they ran up trillions in debt without having anything to show for it.

New President Obama, Same Economy, Banks and Troubles on Wall Street

January 20, 2009

The dawn of the Obama presidency could not shake Wall Street Tuesday from its dejection over the banking industry’s growing problems. After hearing the new president’s inaugural address, investors continued selling, sending the major indexes down more than 2 percent.

Traders on the floor of the New York Stock Exchange paused at times to watch the inauguration ceremony and Obama’s remarks, but the transition of power cdidn’t erase investors’ concerns about the struggling economy.

Obama said the economic recovery would be difficult and that the nation must chose “hope over fear, unity of purpose over conflict and discord” to overcome the worst economic crisis since the Great Depression.

By STEPHEN BERNARD and TIM PARADIS, AP

Investors are expecting Washington will be a central part of the economic recovery. But the first few minutes of Obama’s term did little to ease their concerns.

“At this stage, markets in general and bank investors specifically are really looking to government as the way out,” said Jack Ablin, chief investment officer at Harris Private Bank in Chicago. “Certainly, of just about all of inaugurations that I can recall today’s event probably has the not only the symbolic importance but really tangible importance to the stock market.”

Investors already nervous about the state of U.S. banking were rattled by the Royal Bank of Scotland‘s forecast that its losses for 2008 could top $41.3 billion, the biggest ever for a British corporation. The British government injected more money into the struggling bank Monday. The government also announced another round of bailouts for the country’s banks.

Read the rest:
http://news.yahoo.com/s/ap/200901
20/ap_on_bi_st_ma_re/wall_street

The Obama-Lincoln Parallel: A Closer Look

January 19, 2009

“Lincoln and Obama shared a loved of words, a belief that rhetoric and oratory could change people’s minds, and the way they would express things, the confidence they would have in a debate – not by fiery oratory, but by a calming presence, a reasoned argument,” says Rice University History Professor Douglas Brinkley.

Brinkley cautions against too close a comparison between Lincoln and Obama.  “When Lincoln came to Washington, seven states had already seceded from the Union. And the Civil War would kill countless Americans.”

Barack Obama and his family recently visited the Lincoln Memorial in Washington. 

From CBS News

With Lincoln often ranking atop historians’ surveys of the greatest U.S. presidents, who wouldn’t want the “Lincolnesque” moniker applied to them? Obama’s circle goes further in portraying him as also fulfilling the legacies of John F. Kennedy and Martin Luther King.

“What all of those men have in common is a kind of rallying the country together behind words,” Brinkley says. “If people start to have the name Barack Obama uttered in the same breath as Martin Luther King or Abraham Lincoln, that’s walking in pretty tall cotton.”

As Brinkley sees it, a better analogy lies between Obama and Franklin Roosevelt, who inherited the Great Depression or Lyndon Johnson, who launched the Great Society programs. The Lincoln inspiration, Brinkley says, is nothing new.

“All Presidents walk the corridor and think about Lincoln. They stare at his portrait. Richard Nixon used to drink gin and have the Secret Service take him to the Lincoln Memorial at night just to talk to Lincoln’s statue,” Brinkley says. Theodore Roosevelt wore a lock of Lincoln’s hair in a ring on his finger.

“We don’t realize how hard it is to be President and how lonely it is in the White House,” Brinkley says, especially when rebel troops are occupying Maryland and Virginia.
.
“It’s very hard to say who has a tougher job,” says Holzer. “Is it the man who’s facing a fiscal crisis worse than any since the Depression and also the specter of nuclear war, terrorism, health pandemics, and all of the issues that a 21st century president has to deal with and hopefully solve? Or is it the President who is facing the destruction of the entire country that he’s been elected to lead?”

Related:
 Obama Reaching Too Much Toward Lincoln?
.
Obama’s “Lincoln Obsession”

For Obama, Media Can’t Wait, Can’t Criticize

Historians say Obama is no Lincoln

Obama And The Press: What’s The Future?

Obama and Lincoln: Historians Mixed (As Usual)

Read all the CBS story:
http://www.cbsnews.com/stories/2009
/01/17/politics/main4731552.shtml

CNN:

http://www.cnn.com/2009/POLITICS/
01/17/lincoln.obsession/index.html

***************

AFP

The spirit of Abraham Lincoln will suffuse Tuesday’s inauguration day, as Barack Obama channels the example of America’s greatest president for a national struggle to overcome the trials of today.

From the Bible that Obama intends to use at his swearing-in to the food he will eat afterwards, the 44th president is overtly invoking his illustrious predecessor in an audacious grasp at history’s inspiration.

“The comparisons to Lincoln, which he has not run away from, set up a high standard, particularly for Americans who don’t really follow politics,” Princeton University presidential historian Julian Zelizer said.

“I think his goals are threefold: first to connect himself with a great leader; second, to place himself in a broader narrative about the nation overcoming its racial past; and third, about being a leader who can heal divisions in difficult times,” he said.

In the 200th anniversary of Lincoln’s birth, Obama is reaching back to another lanky lawyer from Illinois who surmounted doubts about his political inexperience to win the presidency at a time of the greatest crisis.

President from 1861 to 1865, Lincoln steered the north to victory over the rebel south in the Civil War, abolished slavery and handed down some of the most inspirational oratory of US history.

His adroitly managed administration was a “team of rivals” drawn from his competitors for the Republican nomination, an example that the Democratic Obama has emulated in naming Hillary Clinton to his cabinet as secretary of state.

In his books and speeches, Obama has described Lincoln as his political hero. He launched his quest to become America’s first black president from the steps of the Illinois state legislature, where Lincoln also served.

For the over-arching theme of his inauguration, Obama has dusted off words from Lincoln’s immortal Gettysburg Address — “A New Birth of Freedom.”

There is a risk of rhetorical over-reach as the untested Obama takes office with the economy deep in crisis and US troops engaged in two wars. But he is not shying away from the comparison, re-reading Lincoln as he hones his own inaugural address.

“You know, there’s a genius to Lincoln that is not going to be matched,” he said in an ABC television interview, claiming to be “intimidated” at the power of Lincoln’s second inaugural address.

But like Lincoln, Obama says he will use his inaugural speech to urge Americans to come together in a spirit of sacrifice, defeat the present challenge and remake their nation as a “beacon for the world.”

And intimidated or not, Obama was funneling the Lincoln example en route to the inauguration, on Saturday retracing his predecessor’s train journey into Washington from Philadelphia and Baltimore.

Obama was Sunday beginning the official inaugural festivities with a public event at the imposing Lincoln Memorial, at the far end of the National Mall from Congress, where he will be sworn in Tuesday.

For that occasion, in front of a crowd expected by city authorities to number millions, Obama will rest his left hand on Lincoln’s own Bible — borrowed from the Library of Congress — to take the oath of office.

Afterwards, Obama will sit down for lunch with congressional leaders, Supreme Court justices and members of his incoming cabinet to eat the kinds of food enjoyed by Lincoln.

The VIP guests will dine on seafood stew, wild game, root vegetables and apple cake off a replica service of the china set selected by Lincoln’s wife at the start of his presidency.

But perhaps just as well, one Washington site intimately connected to Lincoln will not figure in Obama’s celebration. Ford’s Theatre, where the 16th president was assassinated, is closed for renovation.

Obama Stimulus: Trapped Between Too Little Rock and Paul Krugman Nightmare

January 10, 2009

Barack Obama mentioned that he would welcome suggestions from Paul Krugman on the economic stimuls plan.

“Let’s not mince words,” Krugman said recently. “This looks an awful lot like the beginning of a second Great Depression.”

“Here’s my nightmare scenario: It takes Congress months to pass a stimulus plan, and the legislation that actually emerges is too cautious. As a result, the economy plunges for most of 2009, and when the plan finally starts to kick in, it’s only enough to slow the descent, not stop it. Meanwhile, deflation is setting in, while businesses and consumers start to base their spending plans on the expectation of a permanently depressed economy – well, you can see where this is going,” Krugman recently wrote.

That’s the “hard place.”

 
Seeming to agree with Krugman, Obama recently said, “If we don’t act swiftly and boldly, we could see a much deeper economic downturn that could lead to double-digit unemployment.”

The rock is this: Congressional Democrats remove tax cuts proposed by Obama from the stimulus while Republicans try to hold down the deficit by limiting the total amount of Federal money spent in the stimulus.

And let’s just suppost that both sides aim the stimulus at short-term construction jobs rather than long-term careers that will make more wealth and more lasting taxpayers — and a lasting, vibrant U.S. economy.

That’s the rock.

Related:
Krugman:
http://www.indianagazette.com/articles/2009/01/08/
opinions/syndicated_columnists/10008864.txt

‘This looks an awful lot like the beginning of a second Great Depression.’
http://www.latimes.com/news/columnists/la-na-
onthemedia7-2009jan07,0,3156287.column

Obama Pressed From Left on Stimulus

Obama Urges Legislative Sprint, Largest Spending Ever On Las Vegas Gamble

Obama’s New Vision for Vice President Joe Biden

December 21, 2008

Vice President Joe Biden will be the new “White House Task Force on Working Families.”

Bravo to President-elect Barack Obama.

History tells us that the Vice President of the United States is not always as important as he seems to think….

Remember Dan Quayle?

Dan Quayle

President-elect Barack Obama will have to define the role of his Number Two.  He and Vice President-elect Joe Biden seem already to agree on one thing for sure: the Vice President in the Obama Administration will have a smaller role than Dick Cheney.

Cheney responded:  “President-elect Obama will decide what he wants in a vice president and apparently, from the way they’re talking about it, he does not expect him to have as consequential a role as I have had during my time.”

Vice President-elect Joe Biden listens as President-elect Barack ... 
Vice President-elect Joe Biden, in focus but in the shadow, listens as President-elect Barack Obama makes remarks.(AP Photo)

Biden says the move is toward a more historical and constitutional role for the vice president.

Biden cited Article I of the constitution as the source of the Vice President’s power and role.

But it is Article II deals with the Executive Branch of government.

Article I deals with the legislative branch.

Vice President-elect Joe Biden “teaches constitutional law” back in Delaware “but can’t keep the articles of the constitution straight,” said Vice President Dick Cheney on Fox News Sunday.

With two wars boiling, the economy is its worst shape since the Great Depression and the former Chairman of the Senate Foreign Relations Committee at his side one might think Obama would put Biden to the plow.

And Obama ha done just that.  Joe Biden will chair The White House Task Force on Working Families.

Image 
Joe Biden – AP

But it is certain, Obama aides say: Biden will be smaller in stature than Cheney.

Auto Bailout

In an interview with Chris Wallace on Fox this past Sunday, Cheney also said that Congress had a chance to act on the bailout of the auto industry “and failed.” 

“They had ample opportunity to deal with this issue and failed,” Cheney said in an exclusive interview with FOX News Sunday host Chris Wallace. “The President had no choice but to step in.”

Democrats in Congress disagreed.

But Sen. George Voinovich, R-OH, who represents a large auto industry constituency in his home state, was first out of the gate with an e-mailed statement, saying he was “grateful” for the president’s action “to help thwart a disaster that would have sent our state over the cliff.”

Asked about Biden’s role as Vice President, Cheney said that he had heard that Biden was seeking a smaller role as Vice President but that “it will be President-elect Barack Obama’s choice to diminish the office of the Vice President”….

Sure.  Joe Biden will be busy with the White House Task Force on Working Families.

A spokeswoman for the vice-president-elect said “Biden had no intention of continuing the practice started by Vice President Cheney of regularly attending internal legislative branch meetings — he firmly believes in restoring the Office of the Vice President to its historical role.”

Maybe we are returing to the era of Vice President John Nance Garner who was quoted as saying his job was “not worth a bucket of warm spit.”

Garner once described a writer who quoted it this way as a “pantywaist.”

Garner apparetly used a word that began with a “p” and ended in “ss.”

John Nance Garner
John Nance Garner
.
By John E. Carey

Related:
Biden to oversee efforts aimed at middle class

Vice President Dick Cheney attends the unveiling of President George W. Bush's
AP – Vice President Dick Cheney

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From Politico
Outgoing Vice President Dick Cheney poked at Vice President-elect Joe Biden for muffing his constitutional facts on the campaign trail during a wide-ranging interview on “Fox News Sunday.”

Biden, who criticized Cheney for being the “most dangerous vice president” in American history, also has taken issue with Cheney’s expansion of the powers of the vice presidency.

The vice president-elect hasn’t, Cheney said, asked him for any advice.

Asked about Biden’s criticism, Cheney pointed out that Biden also said the powers and responsibilities of the executive branch are in Article One of the Constitution – and as a longtime chairman of the Senate Judiciary Committee and professor of constitutional law, should know that Article One applies to the legislative branch.

“I’d write that off as campaign rhetoric,” Cheney said.

He added: “If he wants to diminish the office of the vice president, that’s obviously his call. I think that President-elect Obama will decide what he wants in a vice president. And apparently from the way they’re talking about it, he does not expect him to have as consequential a role has I’ve had during my time.”

Host Chris Wallace also asked Cheney if he was bothered by his outgoing approval ratings – a dismal 29 percent.

“We didn’t set out to achieve the highest level of polls that we could during this administration,” Cheney said. “Eventually you wear out your welcome in this business.”

***************************************

Dialing back his predecessor’s expansive view of the office, Vice President-elect Joe Biden plans on “restoring the Office of the Vice President to its historical role” as adviser to the president and tie-breaker in the Senate, an aide to Biden said…..

See Politico:
http://www.politico.com/news/s
tories/1208/16261.html

>
Biden has called Cheney “the most dangerous vice president we’ve had probably in American history.” Biden also has said he couldn’t name a single good thing that Cheney had done.

Cheney says he strongly disagrees with the idea that he dangerously expanded the powers of the executive branch. Cheney also says he doesn’t think Barack Obama will give Biden as consequential a role as Cheney has had under President George W. Bush.

See:
http://news.yahoo.com/s/ap/20081221
/ap_on_go_pr_wh/cheney_biden_1

*************

Vice President Dick Cheney says it ultimately will be up to the new Obama administration to resolve the crisis in the U.S. auto industry.

Cheney says it’s a difficult problem and that President George W. Bush has done his best to manage it. It was just on Friday when Bush ordered an emergency bailout of the industry by offering $17.4 billion in loans. The aid comes with tough concessions from the carmakers and their workers.

Cheney notes that the Bush administration has less than a month left in power. He says the bailout is only a short-term plan and only goes so far. The vice president says it will be a problem that Barack Obama will have to deal with after he takes over on Jan. 20.

Cheney made the comments on “Fox News Sunday.”

–Associated Press

*******************

Vice President Dick Cheney accused Congress of failing to help a dying U.S. auto industry, leaving President Bush no choice but to step in with billions of dollars in loans, he told FOX News on Friday. 

The vice president spoke with FOX News Sunday’s Chris Wallace, shortly after Bush announced that the federal government would offer $17.4 billion in rescue loans to automakers. 

Wallace said Cheney also took a newsworthy shot at his successor, Vice President-elect Joe Biden. The comments will air on FOX News Sunday. 

See:
http://www.foxnews.com/politics/2008/12/19/ch
eney-white-house-offered-auto-loans-congress-failed-act/

Despite Setbacks, America Needs To Lead the Way

December 21, 2008

We bankrupted ourselves first ideologically through unilateralism, then militarily through “global war,” and now financially through the debt crisis. Rising great powers, we are told, now lead the way.

But where do we locate this new leadership? In Europe’s self-absorption over its rising Muslim quotient? In Russia’s self-inflicted economic penance for its smackdown of Georgia? In India’s crippling obsession with Pakistan? In  China’s super-cooling economy and the social unrest it’ll trigger? In  Japan’s … whatever Japan is doing nowadays?

So which foreign leader has captured the world’s attention with his promise of changed leadership? Ah, that would be Barack Obama, president-elect of that has-been superpower.

Thomas P.M. Barnett
The Washington Times
.

Amidst the most destabilizing global economic crisis since the Great Depression, no great power has stuck its neck out to claim new authority in the international system. Instead, our presidential interregnum has triggered an odd calm, with even last month’s global economic summit effectively postponed until Mr. Obama’s inauguration.

I’m not suggesting we haven’t reached the end of an era, because we have, just that the new boss is going to look an awfully lot like the old boss.

The world remains a dangerous place. Not in terms of state-on-state war, but because the previously enclave West has exposed itself, through globalization’s rapid expansion, to a host of lower-trust environments – the “wild” East and South.

So failed states rank higher than Pentagon fantasies of high-tech war with our biggest creditor, China. So do transnational terrorists capable of temporarily sowing chaos across networks, like they recently did in Mumbai.

Read the rest:
http://www.washingtontimes.com/news/2008/d
ec/21/world-still-needs-us-to-lead/