Has Obama Run Out of Economic Options?

[girl gone mad]

Has Obama Run Out of Economic Options?
http://www.newsweek.com/2010/08/09/has-obama-run-out-of-economic-options.html">Newsweek

Since he first came from nowhere to outmaneuver Hillary Clinton in the 2008 presidential campaign, Barack Obama has been deemed brilliant at political chess. Like any grandmaster, Obama can think several moves ahead, and he knows when to concede a tactical setback, as he’s already done by indicating that the GOP is going to show strong in the upcoming congressional election. So it wouldn’t be surprising if Obama were starting to worry about what lies even further down the board. So bleak is the economic outlook that the president may find himself running out of moves—perhaps even in danger of being checkmated—as he faces reelection in 2012.

That was the unspoken subtext Friday as President Obama put the best possible face on a grim jobs report for July and an ever-darkening economic outlook—not just for the rest of 2010, but for 2011 as well. He talked up the “183,000 jobs” added by the manufacturing sector this year—and alluded hopefully to a USA Today story that suggested some plants are returning to the U.S. “for the first time”—as well as new legislation that will aid the states. What was left unsaid was that Obama may have already politically maneuvered himself out of the only major remedy that could bring unemployment down and growth up enough to assure his reelection: another giant fiscal stimulus. After engendering Tea Party and centrist-Democratic resistance to more government spending by pushing his health-care plan—and losing altitude rapidly in the polls—Obama no longer seems to have the political capital he may well need, in the end, to save his presidency.

Most economists would say it’s far too early to declare that we’re in an economic endgame. “There’s a long time between now and the next presidential election and lot of economic uncertainty,” says Harvard’s Lawrence Katz, the former chief economist for the Department of Labor during the Clinton administration. “There are many policies the administration could adopt between now and then.” Among them: a payroll-tax holiday, targeted tax cuts for the middle class, and further extensions of unemployment compensation. “Historical evidence suggests incumbent parties do well if growth is rapid even if unemployment is high,” Katz adds.

But Katz, like other economists, says it’s almost impossible to imagine growth or unemployment numbers getting anywhere close to where they were in 2007, before the financial crisis, by 2012. It now appears that the spurt of new jobs seen earlier in year—most notably, the 241,000 jobs created in April—was not the start of a new trend of higher growth but a misleading aberration. The loss of 131,000 jobs and the anemic addition of just 71,000 private sector jobs in July, both far worse than the forecasts, amounted to a devastating blow to recovery. Last week Goldman Sachs forecast less than 2 percent growth for 2011, and the unemployment rate seems stuck at 9.5 percent or higher, with the possibility that it could tip back over 10 percent. With interest rates still close to zero, monetary policy can do little more (though the Fed will debate new measures at its meeting Aug. 10, when it is expected to downgrade its economic outlook as well). And political discontent over government spending is such that a much larger fiscal stimulus—urged on Obama at the start of his presidency by such economists as Paul Krugman and Joseph Stiglitz—has now become out of the question. “This town has given up on that completely,” says Heidi Shierholz of the left-leaninig Economic Policy Institute. “He doesn’t have anything big to hang his hat on.”

http://www.newsweek.com/2010/08/09/has-obama-run-out-of-economic-options.html">more...

[OHdem10]

1. Somethings never get the attention, some might like. Bernie Schwarz

(Loral Corp) appeared on Charlie Rose last Friday night
with a plan.

He believes it its time for Obama to proclaim --We are in
an Uemployment or jobs crisis. This crisis must be tackled
with same energy, concern and endeavor that was used to
stabalize the Financial System and Markets.

He believes it is worth 1 trillion dollars because he says
it is investment. Using his businesss and corporate acumen
he seemed to have the plan all plotted on papers in front
of him. It included whole scale infrastructure projects
among other things. He says his plan will work and in
the end pay for itself. For every one dollar you get one
dollar and sixty five cents return.

He insists that he is presenting it to President Obama.


I am sure you can find this program at charlierose.com
if you are interested. This is a Business Man who
understands we are in for the long hard slog and is
offering a plan to help.

[jtuck004]

2. It's not so much that he is out of options, it's that he is out of imagination.

Or perhaps it's his advisors? Regardless, the administration, along with both political parties in Congress, Wall Street, and much of American busienss is, and has been, engaged in a campaign to convince everyone that things are getting better while any sober look would recognize that things are crumbling around them. Gibb's comments about drug testing supporters who disagree with the policies make that clear. Olberman's observation last night that the administration seems to expect to wake up to applause each morning for their so-called accomplishments indicate that there are more than a few people who expect a lot more. He was talking to the administration because of their decision to lash out at supporters instead of doing the hard work, but he could have been talking about any large political group of either side.

If we are to have any hope we need action by those who recognize how pitifully small the efforts have been thus far, someone who has enough vision to put forth a call to action to move this country into the 21st century. It will take trillions, of course, in education, public works, medical care, building a manufacturing base and public infrastructure appropriate for the 21st century (much like China has been doing for the past 10 years), and it needs to be done without yanking even a piece of the safety net out from under our most vulnerable, and certainly a restructuring of taxes that remove some of the advantages of the most wealthy.

We need a "general", someone who wants to put themselves out there and lead us into the 21st century, knowing that while we could still lose we have no choice, not a call for "bipartisanship" among people who, tragically, seem to generally agree on the economy.

Otherwise we can continue to spend our lives watching small-minded men and women fighting the smallest of battles, and watch the country become...?

[Murray_R]

5. Congratulations.

"If we are to have any hope we need action by those who recognize how pitifully small the efforts have been thus far, someone who has enough vision to put forth a call to action to move this country into the 21st century... We need a "general", someone who wants to put themselves out there and lead us into the 21st century"

You're already on Step 10 of the Road to Serfdom.

[jtuck004]

6. Great. Cartoon Logic. LOL n/t

[Murray_R]

7. it's important

to make your message understandable to the audience.

People clamoring for a "general" to "lead us" creeps me out.

Why don't you want liberty, instead of someone uber-parent with a gun and a plan for everyone else's life?

[jtuck004]

8. Because 300 million people going 300 million different directions is silly chaos,

and will never get anything important done. It takes a leader, someone to pull it all together and inspire people.

There is something to be said for a selfish "I want to do what I want to do perspective", though what it accomplishes is usually (not always) so small that it helps no one.

There's always a problem when people mistake freedom for license.

[Murray_R]

9. chaos, but not silly

300 million people have 300 million different dreams, desires, and wants. You would substitute that for 1 "leader's" dream? The subordination of the individual to the 'leader' is a genuinely fascist tenet, are you aware of the fuhrerprinzip?

That 300 million people have varying wants is exactly why we 'a leader' is so ill suited to satisfy those wants, and why when viewed from that perspective they seem so 'chaotic'. The enormity and complexity of the task of satisfying the wants and needs of 300 million is beyond any 'leader', or even council of leaders. Do you know anything about GOSPLAN?

"There is something to be said for a selfish "I want to do what I want to do perspective", though what it accomplishes is usually (not always) so small that it helps no one."

So all the doctors, bakers, mechanics, truck drivers, and multitude of other voluntary fields of work don't equal the vast array of goods of services you're drowning in in this country?
You think it 'helps no one' because you can't see the forest for the trees.

Do you think there is bread on the shelf at your local store because the shopkeeper is looking out for you, or for himself and his family?

[jtuck004]

10. You proved my point. The doctors, bakers

etc didn't do that by themselves. They got to the store by driving on a road that wasn't built by one small-minded selfish individual. The store was built because someone's vision brought enough people together to build it. The wheat was very likely grown as a result of multiple inputs, but all relying on each other to get their jobs done. The doctors didn't build their own medical school and suddenly appear...etc.

Funny how you bring up the Nazi's. None of that would have been possible without a president and congress to marshall an army and several generals to lead the people into battle to defeat the leader and generals on the other side. And without the "subordination" of a lot of people who died for that cause this would have been a very different country, full of the very slaves you bring up. But we are not, and it's not because 150 million people suddenly jumped up and decided it was in their own best interest to manufacture a tank and boats and float across an ocean to die.

There is almost nothing to be said for selfish, and thanks for the reminder.

[Murray_R]

13. not quite

"You proved my point. The doctors, bakers etc didn't do that by themselves."

I didn't suggest they 'did it by themselves', but that they freely coordinate their activities to achieve what they have. No "leader" told them what they must be, how much to sell their time for, etc. It is far beyond the abilities of any one man, much less small group of men, to coordinate the activities of millions of people to further satisfaction than those individuals could achieve for themselves when property rights are established, and people are free to price their time, service, and goods to one another.

"They got to the store by driving on a road that wasn't built by one small-minded selfish individual."

Wow, if you want to get into a discussion on roads, we can, but rest assured, privately owned roadways have existed since antiquity, and into today. It's not lost on me that the vision of Eisenhower, an excellent general, cribbing the vision of Hitler, instituted the national highway system, and perverted our transportation system into one that today relies on foreign oil to operate. If oil hadn't been subsidized with overseas military force, and the government hadn't taken our wealth in taxes to subsidize automobile travel over market priced alternatives, we could have a much 'greener' and efficient economy already. Before you brag about the government building the road network, think a moment about some of the unintended consequences of that vision "by one small-minded selfish individual".

"Funny how you bring up the Nazi's. None of that would have been possible without a president and congress to marshall an army and several generals to lead the people into battle to defeat the leader and generals on the other side."

So faith in "one leader" to decide things for everyone led to the largest slaughter of all time. This is your point in favor of having "one leader" for us?
It's funny to me that a system so demonstrably prone to and suited for mass slaughter is proposed by you as a system to establish prosperity and bring wealth. Do you think it is a mere accident of history that the largest nations to have succumbed to the will of "one leader's vision" (Germany, Russia, China) have cost the lives of 10s of millions of people each?

If you didn't skip any steps in the Road to Serfdom, you would have noticed that the reliance on central planning and the curtailment of liberty comes first from an appreciation for the government's power to mobilize people for death and destruction.
It perplexes me you won't trust 300 million people with their own freedom for fear of their 'selfishness', but would turn them over to a single leader, presumably somehow not made from the same 'selfish' human clay as the rest of us.
You're waiting for Jesus, aren't you?

[jtuck004]

14. Waste of time, because

You are going to continue to argue silly points, straw men and cartoon logic. Yet you have the freedom to type what you want on this forum because of the unselfish sacrifice of others, and because of the government investment in a military project which turned into the Internet, driven by people who encouraged others to join them. But anyone who won't see the difference between the Nazi's and the people they were harming is just not worth the effort at communication.

You have reminded me that there are those who will simply refuse to understand there are many brands of decaffeinated coffee that are just as tasty as the real thing. That's what popcorn is for. And the list.

[sendero]

19. Because the uber-parents.

.... created this manufactured disaster?

[Crazy Dave]

15. It reminds me of Orwell's "Animal Farm"

No matter how bad things were and getting worse, the animals were always told how great things are and just keep getting better and that they all needed to "work harder".

[pa28]

21. I agree with your idea about his circle of advisors. It's too narrow.

We hope Obama reads widely but we often hear he relies Geithner, Summers and Ruben. IMO these are just bloodless revolving door types who go from gov't to wall street and back. Their bond market view of the economy is something like religion and the time may soon come where iconoclastic ideas become unavoidable.

Opening the table to people like Robert Reich, Elizabeth Warren and Paul Krugman will be like bringing some much needed cool air and water to millions of people out there who are lost in the desert.

[amandabeech]

23. They also need to dump their religious devotion to what they call "free trade."

We are being taken to the cleaners by countries that have serious trade barriers and manipulated currencies.

We are also rewarding countries that are trashing the environment and treating their workers like shit.a

We'd be in better shape if put tariffs in against goods coming in from manipulators and taxed the hell out of services done overseas for us from the same bad guys.

Then we should slap an environmental and labor rights fee on top of that on goods and services coming from countries that abuse the environment and their workers.

Infrastructure development without making trade fair will be absolutely useless because it won't make the cost of doing business much cheaper at all and cheap is the only word that interests employers today.

[Xenotime]

3. It might be time to start going after the wealthy's 401k savings.

A simple management fee would really help the bottom line of the economy.

[kelly1mm]

4. Please expand on this idea including what you would deem 'wealthy'. nt

[SKKY]

22. It's cute you think this would be only the wealthy.

I on the other hand, am not so hopeful.

[TheWatcher]

11. Not at all. There is still plenty left for the Banksters and Wall Street to Steal.

As a matter of fact, they are just getting started.

Watch and be Amazed.

[cbdo2007]

12. The only options left that will do any good are - Regulation and accountability.

That is what we need to "save" the economy but who is going to put their head on the chopping block and call for massive regulation and accountability??????? - NOBODY!!!! Duh.

The Repubes plan to solve the recession, lower taxes, we know doesn't work.

The Dems plan, stimulus packages, just rains money down on a broken system which just gives short term relief without actually fixing anything.

So until we have someone come along who is really, literally, willing to put their career on the line, our economy is never going to truly recover no matter who is in charge.

[OllieLotte]

16. Not sure who you are, but you nailed it. n/t

[cbdo2007]

18. Thanks!

[Warpy]

17. Of course not. What he's running out of are bandaids

to try to stop the gushing of an arterial bleed. It's human nature to try to paste a system you know back together again instead of taking a leap into the unknown to design a better one.

Of course, it's not unknown. We know what finally worked the last time. Right now, there's just little consensus for it.

It seems we always have to hit rock bottom before we realize the old way just won't work, period, and start casting around for the stuff that has worked and try that for a change.

[deficitjobs]

20. What worked last time?

What do you advocate?