Obama’s New Strategy
[Guest post by DRJ]
An op-ed by L.A. Times’ Washington columnist Doyle McManus outlines President Obama’s new strategy — a campaign based on claims of Republican intransigence that is the opposite of hope and change:
“Obama hopes to win his popular mandate back by running against the congressional minority, putting their flaws in the spotlight instead of his own.
It won’t be transformational. It won’t change the way Washington works. It won’t be pretty. But it’s a strategy.”
This strategy hearkens back to the beginning of his term when Obama’s message to the GOP was “I won.” But there are at least two problems with this strategy: First, it’s not the “hope and change” mantra that Obama was elected on. Second, Republicans have done well by opposing Obama’s plans. In fact, recent GOP victories in Virginia, New Jersey, and Massachusetts suggest it’s the Republicans, not Obama, who should be saying “we won.”
— DRJ
he becomes increasingly invested in Team R’s opposition
dumbass
happyfeet (71f55e) — 2/1/2010 @ 4:55 pm““Obama hopes to win his popular mandate back by running against the congressional minority, putting their flaws in the spotlight instead of his own.”
He should also go and lecture them every few weeks. People seemed to like that.
imdw (00bfab) — 2/1/2010 @ 4:58 pmMeanwhile, the American people are unemployed and being spent into bankruptcy … Seems like NO would be the right word to use.
I think the strategy is laughable and easily over come by the tea party people and their personal campaigning rallies.
Bottoms up always works better.
bill-tb (541ea9) — 2/1/2010 @ 5:00 pm“He should also go and lecture them every few weeks. People seemed to like that.”
imdw – I’m surprised he knew where they were and even acknowledged their existence.
daleyrocks (718861) — 2/1/2010 @ 5:03 pmThis should be called the “Keep fucking that chicken” strategy.
daleyrocks (718861) — 2/1/2010 @ 5:04 pmThe public may be slowly figuring out that “I won” means “we lost”.
htom (412a17) — 2/1/2010 @ 5:11 pmSounds like a three year old who has been told “NO!” by his parents.
Then claims they are being mean to him.
Dr. K (adb7ba) — 2/1/2010 @ 5:15 pmWinning involves changing strategy. Playing nice with the Republicans is like feeding a wild beast, only to be eaten at last. It has not worked. He needs to go back to the fighting attitude that won him the elections in the first place. It’s not gonna be pretty from now, people. THIS IS SPARTA!!!
The Emperor (4baed8) — 2/1/2010 @ 5:17 pmThis is what happens when you pull a chain without turning the light on.
AD - RtR/OS! (810a60) — 2/1/2010 @ 5:20 pmEmperor – exactly when did Obama ever “play nice” with the Rebublicans?
Oh right! He didn’t because “He won”
Captain Bullshit has majorities in BOTH houses; all he had to do was to keep them together. He couldn’t even do that.
I really hope he follows your advice.
Then he won’t even be a mediocre one term president
Dr. K (adb7ba) — 2/1/2010 @ 5:32 pm“imdw – I’m surprised he knew where they were and even acknowledged their existence.”
I suppose the house GOP told him where to go once it was decided he was going to be speaking to them.
imdw (688568) — 2/1/2010 @ 5:32 pmThe
Matador (176445) — 2/1/2010 @ 5:35 pmanswerstrategy my friend, isblowingpissing in the wind…I didn’t see this get a lot of play today.. it’s horrifying…
I just picked that one almost randomly.
This is balls out redistribution.
We’re in big trouble.
but the little president man has a sense of humor at least…
moron
happyfeet (713679) — 2/1/2010 @ 6:07 pmThe White House must be banking on the assumption that the nation’s education system has been off track long enough that no one took civics class or remembers/understands how congressional majorities work any more. Maybe in another decade this strategy will fly, but I don’t think enough geezers have died off yet. Thankfully there’s a lot of home schooled students coming along out there, too.
These people really are all about teh narrative aren’t they? Reality, truth? not so much.
elissa (8b0b7d) — 2/1/2010 @ 6:08 pmthat’s an astoundingly truthful thing to print in the Los Angeles Times
I didn’t know awhile was opposed to be two words.
At least people can’t tell you’re ignorant about it unless you write it down.
happyfeet (713679) — 2/1/2010 @ 6:19 pmfeets, according to my dictionary, their usage of “a while” is correct in this construction, since it is in a prepositional phrase.
AD - RtR/OS! (810a60) — 2/1/2010 @ 6:27 pmyou’re right I just didn’t know…
I just didn’t know.
happyfeet (713679) — 2/1/2010 @ 6:30 pmhf,
I agree. The EIC is already a tool to redistribute income and in the current economy (not to mention Obama’s planned expansion), more and more people are eligible. It’s amazing how much money is transferred because of the EIC.
DRJ (84a0c3) — 2/1/2010 @ 6:31 pmI have three children – now, productive young adults – and look forward to having grandchildren. What this president and the Democrat-controlled Congress are doing to this country is unconscionable. The debt that all of us older folks are being saddled with is mind-boggling. The debt that our children and future generations will be burdened with is clearly criminal.
GeneralMalaise (55c598) — 2/1/2010 @ 6:42 pmI agree. We should prosecute Boooooosh. Bush created a 500 megaton potato salad mess in Washington. Clean up isn’t free.
Intelliology (00d844) — 2/1/2010 @ 6:47 pmPetulant little child
JD (7fecfd) — 2/1/2010 @ 6:54 pmPresident Obama’s new strategy
How is this different from his startegy in the past year?
Subotai (c7875f) — 2/1/2010 @ 7:05 pmThere’s a clown in every crowd who will do his utmost to try to defend the indefensible… you must do better than that, intelliproctology…
“Mr. Obama did inherit a recession, which is partly responsible for this ocean of red ink. The slow pace of economic recovery has contributed to a collapse in revenues, down to 14.8% of GDP in 2009 and an estimated 14.9% this year. That’s well below the modern historical average of about 18.1%, and it is a reminder that economic growth is the most important contributor to smaller deficits. Had last year’s “stimulus” worked half as well as the White House advertised, these deficits wouldn’t be as large.
But as the nearby chart shows, Mr. Obama’s major contribution to deficits has been a record spending spree. In 2007, before the recession, federal expenditures reached $2.73 trillion. By 2009 expenditures had climbed to $3.52 trillion. In 2009 alone, overall federal spending rose 18%, or $536 billion. Throw in a $65 billion reduction in debt service costs due to low interest rates, and the overall spending increase was 22%.
In one year.
CBO confirms that Democrats have taken federal spending to a new and higher plateau: 24.7% of GDP in 2009, 24.1% this year, and back to an estimated 24.3% in 2011. The modern historical average is about 20.5%, and less than that if you exclude the Reagan defense buildup of the 1980s that helped to win the Cold War and let Bill Clinton reduce defense spending to 3% of GDP in the 1990s.
This means that one of every four dollars produced by the sweat of American private labor is now taxed and redistributed by 535 men and women in Congress.
The slight deficit improvement for 2010 isn’t due to any spending restraint. The feds will get a $218 billion windfall from reduced spending on TARP bailout cash, plus $27 billion in reduced deposit insurance outlays. All of that money and more is going right out the door again in $112 billion more in so far unspent stimulus, a 7% increase in nondefense discretionary spending, 6% more for Medicare and 11% more for Medicaid.
Compared to this gusher, Mr. Obama’s touted spending freeze for some domestic agencies is the politics of gesture. It would apply to only 17% of the budget, and these programs have already had a 22% increase in their annual appropriations in the past two years, and another 25% increase including stimulus.
As for the deficit, CBO shows that over the first three years of the Obama Presidency, 2009-2011, the federal government will borrow an estimated $3.7 trillion. That is more than the entire accumulated national debt for the first 225 years of U.S. history. By 2019, the interest payments on this debt will be larger than the budget for education, roads and all other non-defense discretionary spending.
If this borrowing were financing defense investments or tax rate reductions to spur the U.S. economy, we wouldn’t be worried. But most of this money is going to transfer payments to individuals, or subsidies to home buyers and inefficient businesses that do little for wealth creation.”
http://online.wsj.com/article/SB10001424052748703906204575027181656362948.html
GeneralMalaise (55c598) — 2/1/2010 @ 7:08 pm…but it will do wonders for the bottom lines of those associated with ACORN and the SEIU.
AD - RtR/OS! (810a60) — 2/1/2010 @ 7:13 pmGeneral – But, Bush. That is all.
JD (61d2c1) — 2/1/2010 @ 7:14 pmYou got it, JD. They got nuthin’.
GeneralMalaise (55c598) — 2/1/2010 @ 7:26 pmGeneral – I was trying to see how far down I could distill their message. That was as close as I could get and still convey the whole message.
JD (61d2c1) — 2/1/2010 @ 7:31 pmI agree. We should prosecute Boooooosh. Bush created a 500 megaton potato salad mess in Washington. Clean up isn’t free.
You were asked direct questions about your earlier inane statements regarding climate change. Either answer them now or admit you’re a fool and a poseur.
Let’s hear it – all of it.
Dmac (539341) — 2/1/2010 @ 7:41 pma 22% increase in their annual appropriations in the past two years
I hadn’t looked at it that way.
We’re in big trouble.
happyfeet (713679) — 2/1/2010 @ 7:46 pmApparently the only jobs that will see growth are government jobs under the Barcky reign.
JD (61d2c1) — 2/1/2010 @ 7:47 pmObama is at his best when what he says has no content whatsoever. Hope and Change! He’s at his worst when he actually says something about policy. He will always run against, because if he says what he’s for, it’s all over.
He ran against Bush. He’ll run against the minority. He runs against theories. He runs against people. He’s always against. He’s really only for one thing, Barrack Obama. This is his safety net. If you’re against what he’s for then you’re at best a partisan sniper and at worst a racist demagogue.
But what he’s for is empty. There’s no there there. We’ve elected a mirror.
Ken Hahn (b865d2) — 2/1/2010 @ 8:08 pmdoes he think this is going to sell well?
redc1c4 (fb8750) — 2/1/2010 @ 11:54 pmComment by JD — 2/1/2010 @ 7:47 pm
Since the economy began shedding jobs in 2008, the Govt sector has steadily added positions, and pay, and benefits.
AD - RtR/OS! (810a60) — 2/2/2010 @ 12:04 amThe problem with playing the “We suck less” strategy (variant title: “If you think we’re bad, you should see the other guys”) is that all the public hears is “suck”.
Icy Texan (0781f2) — 2/2/2010 @ 2:34 amThe astounding item is that a good portion of the deficit for FY 2009 was due to the “one time” stimulus.
And this year’s deficit is going to be bigger?
Sure tax reciepts will be lower due to unemployment (not to mention the secondary effects of raising taxes).
I mean, what is this, Stimulus II?
Dr. K (adb7ba) — 2/2/2010 @ 2:42 amLet’s see. Since Obama began his massive spending programs, Republicans (with no power in the house, senate or executive branch, have gained 8 points in generic polls. Independents, who supported Obama by 2:1 in the 2008 election have shifted to 2:1 against him.
Democrats have lost governors’ races in Virginia and New Jersey, two states Obama won. Running as the 41st vote against Obamacare, Scott Brown took the Massachusetts Senate seat formerly held by Teddy Kennedy. Virtually every democrat seat up for election is vulnerable.
The “stimulus” failed; GM & Chrysler failed. TARP has failed. Obamacare has brought citizens to the streets. His “talk-to-anyone” foreign policy has failed. His economic policies have cost 4 million people their jobs with no end in sight.
Since his inauguration, Obama has fallen farther and faster than any president in recent history. People like him personally, but strongly oppose his radical agenda – health care, cap & trade, amnesty, nationalization of industries – by 2:1 margins.
Obvious conclusion? Ram health care, energy taxes and other huge social programs through as fast as possible.
“Go ahead, make my day!”
arch (24f4f2) — 2/2/2010 @ 4:23 am“Apparently the only jobs that will see growth are government jobs under the Barcky reign.”
The 00’s gave us zero net job growth, so maybe this would be a net gain.
imdw (d8a0c2) — 2/2/2010 @ 4:53 amAnd maybe monkeys will fly out of your arse, imdw.
JD (957e20) — 2/2/2010 @ 5:11 amimdw:
Unemployment is not a statistical game played between political parties. We are discussing peoples’ livelihood. Extending unemployment does not foster employment; it encourages unemployment. Government jobs do not make profits; they compete with the private sector for capital.
Obama, using taxpayers’ money, propped up states where spending was out of control. Take California. The democrat controlled legislature has successfully fought off every effort to restrain spending passing wave after wave of regulations and new Liberal spending projects, while supporting communities giving sanctuary to illegal aliens. They should sink or swim with no federal taxpayer bailout.
As for “creating or saving” government jobs. If the state and local government jobs are necessary, the state should fund them without assistance from the other states who are dealing with their own economic priorities. Every employer struggles with economic downturns. It’s no fun to call in loyal, productive employees and tell them you have to let them go because you don’t have the money to pay them.
Growth, new jobs, will only come when the private sector can project profits from hiring, building and selling products and services. Today’s outlook is very risky. Employers, unsure of the cost of healthcare, taxes, energy and materials, are more likely to cut employment rhan increase it.
Like a majority of Americans, I believe that growth in government is the wrong direction.
arch (24f4f2) — 2/2/2010 @ 5:31 am“We are discussing peoples’ livelihood. Extending unemployment does not foster employment; it encourages unemployment.”
It does make it tolerable. That is the point. I don’t know anyone that prefers to be on unemployment over being employed.
“Growth, new jobs, will only come when the private sector can project profits from hiring, building and selling products and services. Today’s outlook is very risky. Employers, unsure of the cost of healthcare, taxes, energy and materials, are more likely to cut employment rhan increase it.”
Profits have returned to the financial sector. Who can we thank for that? Obama the socialist that nationalized the banks? Or Obama the centrist that gave away public money to the rich?
imdw (72206b) — 2/2/2010 @ 5:42 am“I believe that growth in government is the wrong direction.”
That’s an understatement. Yet what’s fascinating is the number of people clamoring about how we need more government spending. We need to spend our way out of the hole. We need fiscal responsibility – so we spend more.
In business, you can create growth by borrowing capital; investing in new technology; hiring more talent: because you are creating a product or service from which your investments make.
In government, you create nothing. In fact, the opposite happens. Only by reducing government and government control can an economy grow. There are a few examples where government pressure has contributed to better productivity and newer technologies. But these are a far cry from the number of innovations and gains created from the private sector.
Corwin (ea9428) — 2/2/2010 @ 5:44 am“In government, you create nothing. In fact, the opposite happens.”
Look at all the big nothing that was created during the depression and the second world war.
Forget that. Look at the big nothing that was destroyed on 9/11 — the twin towers. Built by the Port Authority — a government agency.
imdw (ce576a) — 2/2/2010 @ 6:25 am[T]he big nothing … – a government agency.
Yes sir. I agree.
Corwin (ea9428) — 2/2/2010 @ 6:33 amCorwin:
Some government spending is essential. For example, we need national defense, foreign relations, courts and treasury.
Some investments, such as putting a man on the moon, building the interstate highway systems, major dams, airport and seaports are too costly for the private sector or show no return on investment. If there is a national consensus, government can take the lead if the job is beyond the private sector.
Today, our country is a serious “Obamapogenic” financial crisis. We need to ask some hard questions. Feel free to add your own questions.
My poster boy for government waste is the Department of Education. Please show me where in the Constitution the Federal government is required (or even permitted) to control education. For all their mandates and demands on states and local governments, the federal government supplies only 9% of the education budget. If they went away tomorrow, who would suffer?
Does NASA still have a role to play?
Other than obstructing energy development and ruling by fiat, does the EPA still serve an essential purpose?
What does health and human services actually do? Housing and Urban development? Interior?
Is Homeland Security really earning its keep?
[Some of the above are deliberately provocative.]
We must stop spending on programs the have failed and get out of the way of economic recovery or we are all in huge trouble.
arch (24f4f2) — 2/2/2010 @ 6:44 amOnly in Barcky and imdw’s world could someone utter such a nonsensical phrase like we have to spend ourselves out of financial trouble. In the real world, they would be laughed at.
JD (24e83b) — 2/2/2010 @ 6:51 amArch,
I digressed into the imdw-hole. I shouldn’t have.
Yes, government has a role. And your examples are sound.
Neither Obama’s new strategy nor Republican’s we won’t vote for anything strategy are good ones. He didn’t win, nor have the Reps. In fact, no one is winning.
The big growth of government began decades ago. blame Federalists (both Reps and Dems). All are pointing fingers, none are taking responsibility. Both use the others’ flaws as ammo. And we are caught in the cross-fire.
There are no winners and losers – only losers.
Corwin (ea9428) — 2/2/2010 @ 6:52 amimdw, do you ever get tired of arguing with people whose political philosophy pre-dates Herbert Hoover? “Government produces nothing” and a fundamental lack of understanding of basic Keynesian economics? That is so Cal Coolidge.
Possibly the folks saying the government creates nothing of value (save for cool bombs for killing foreigners) should realize what the f*ck they’re typing on, unless the internet really was created by Bill Gates and Steve Jobs.
I’m just not sure how you argue with people who think the only asnwer to any question is “no.”
Deficit reduction panels that you favored? No TARP money you voted for? No
And, yet, here they are, screaming no and calling it governance.
timb (449046) — 2/2/2010 @ 7:04 amOne of my favorite quotes –
“I contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.”
Sir Winston Churchill
arch (24f4f2) — 2/2/2010 @ 7:12 am“government” is very pivotal for a civilized society. However what does “government” mean? Massive bureaucracy with legions of unionized public employees who cannot be fired? Self-same legions poking their noses in your business – be it financial or presonal/sexual?
Test your “government” premise – give the power you desire for your “side” and give it to your political opponents, so they can economically subsidize those you despise – then sing the virtues of government. Won’t be so easy then…..
Californio (35bb0e) — 2/2/2010 @ 7:14 amstrike “presonal” – insert “personal”
Californio (35bb0e) — 2/2/2010 @ 7:15 amtimb uses the same poor arguments I tried to satirize: misquoting what people write.
The answer lies in less government, not no government.
Corwin (ea9428) — 2/2/2010 @ 7:39 amtimb
“Keynesian economics” prolonged and deepened the Great Depression. In Europe, the crisis was over years before we recovered. Keynes ideas did not help us recover; WWII did. FDR’s policies were examples of failure.
The only way out of our current economic situation is growth in the private sector. JFK (a London School of Economics graduate) cut taxes to encourage growth and it worked. Reagan did it and it worked. GWB did it and it worked. These men were all Post-Hoover and Post-FDR.
There are two problems with deficit reduction panels. First, the concept of the executive branch assuming the power of the purse is unconstitutional. Second, Congress (the House of Representative) has the responsibility to solve this problem and not with just an up or down vote.
TARP, stimulus, Wall Street bailouts, auto bailouts, AIG bailout, State bailouts, Fannie & Freddie blank checks all send the wrong message. “Take risks and if you win, you keep the money. If you lose, the taxpayer will cover you.”
America is about “the thrill of victory and the agony of defeat.” Individuals have opportunity to take risks and succeed or fail on their own.
arch (24f4f2) — 2/2/2010 @ 7:43 amThere’s an interesting article from the NY Times in 1999 (which many have read, but is worth rereading) exemplifying how government expansion and control can be a benefit, but has the potential to create problems greater than that which it is trying to fix.
http://www.nytimes.com/1999/09/30/business/fannie-mae-eases-credit-to-aid-mortgage-lending.html?pagewanted=1
Maybe it’s not the real NY Times.
Corwin (ea9428) — 2/2/2010 @ 7:58 am“Keynes ideas did not help us recover; WWII did.”
Yes see it wasn’t the Keynesian spending. It was the bigger wartime spending.
imdw (770125) — 2/2/2010 @ 8:09 amTimb and imadoofus fail to remember (if they ever read it in the first place) FDR’s Treasury Sec’t completely trashing the very spending programs he developed and championed before we entered WWII. Morgenthau admitted that they had made a huge mistake, that their spending policies had extended the Great Depression by another decade, if not longer if war hadn’t broken out.
http://www.artdiamondblog.com/archives/2009/03/_in_new_deal_or.html
Anyone claiming that you can spend your way out of a recession is either willfully ignorant or a rank partisan hack. Perhaps both.
Dmac (539341) — 2/2/2010 @ 8:14 amAnd imadoofus heeds the dog whistle and exposes itself to be an excellent example of both.
Dmac (539341) — 2/2/2010 @ 8:15 am“Timb and imadoofus fail to remember (if they ever read it in the first place) FDR’s Treasury Sec’t completely trashing the very spending programs he developed and championed before we entered WWII. Morgenthau admitted that they had made a huge mistake, that their spending policies had extended the Great Depression by another decade, if not longer if war hadn’t broken out. ”
Imagine how surprised you’ll be to find out that the FDR administration, like others, wasn’t solely of one mind on things, and included several different opinions on the good of the deficit. Of course I know of the period of time when FDR started listening to Morgenthau and scaled back spending. That came right after unemployment had been halved and right before the second dip in 1937. Of course by the time the war started, we weren’t listening to deficit hawks anymore.
“Anyone claiming that you can spend your way out of a recession is either willfully ignorant or a rank partisan hack”
Hey here’s what arch said:
“Keynes ideas did not help us recover; WWII did.”
That’s definitely some sort of willful ignorance.
imdw (6108f6) — 2/2/2010 @ 8:43 amOr, on the faculty of any economics program in the Western world? Or, at a Nobel lecture on economics (see the hated Paul Krugman).
Frankly, dmac, Amity Shales and revisionist bulls*it aside, the economy grew 3 percent in the third quarter and 5.7 in the fourth. Seems like government did pull us out of a recession, just like economists and Obama and every thinking person not mindlessly following John Boehner and the “NO” faction thought.
Please, though, do return to your new found and precious deficit worry. For eight years, “Reagan proved deficits don’t matter” and now, y’all cry over every borrowed penny. It’s almost touching.*
*”almost touching” Can’t actually be touching, because the biggest boon to deficit reduction will be the sunseting of the irresponsible Bush tax cuts and you people will oppose taxes on your social and economic superiors with full-throated gusto. Probably even dust off the Pastor Martin Niemöller quote and claim defending Paris Hilton’s and Lloyd Blankfein’s tax rates is a patriotic act and has nothing to do with selling the country to China. I’d feel pity if you all weren’t such willing accomplices to the rape of the country.
Keep up the good work, imdw. I’d compare you Don Quixote, but windmills are way smarter than dmac and jd
timb (449046) — 2/2/2010 @ 11:05 amUnintentional irony is soooooo delicious. And especially from the creepy one.
JD (61d2c1) — 2/2/2010 @ 11:10 amYes see it wasn’t the Keynesian spending. It was the bigger wartime spending.
Comment by imdw
Actually, it was 12 million men going into the military, kids. Hoover tried Keynesian spending in 1930 but made the fatal mistake of trying to keep wages high and stop layoffs. Roosevelt did some things right, such as the WPA and CCC which gave unemployed men something useful to do. His biggest problem, like Obama’s, was his arrogance and hatred for the productive class. In 1936 during the campaign he said he was hated by the wealthy and hated them in return. It worked as a slogan but the economy went back in the tank in 1937.
Most of you kids don’t know any history. I’m sure you haven’t read Amity Schlaes’ book and I am sure you have not read the UCLA economist’s study of why the Depression was prolonged. They must not have qualified for you list of “every ” economist who agrees with Keynes.
Actually, Keynes has gotten a worse reputation than he deserves because leftist politicians have taken half of his theory, the spending part, and ignored the part about running surpluses in good times.
Mike K (2cf494) — 2/2/2010 @ 11:22 amSome of you might be interested in one comment from that UCLA paper.
“Why the Great Depression lasted so long has always been a great mystery, and because we never really knew the reason, we have always worried whether we would have another 10- to 15-year economic slump,” said Ohanian, vice chair of UCLA’s Department of Economics. “We found that a relapse isn’t likely unless lawmakers gum up a recovery with ill-conceived stimulus policies.”
That paper was published in 2004. Oh Oh.
Mike K (2cf494) — 2/2/2010 @ 11:25 amFrankly, dmac, Amity Shales and revisionist bulls*it aside, the economy grew 3 percent in the third quarter and 5.7 in the fourth. Seems like government did pull us out of a recession, just like economists and Obama and every thinking person not mindlessly following John Boehner and the “NO” faction thought.
Frankly timb, you and imdw have shown yourselves to be so economically illiterate that it’s no surprise neither of you could wipe your backside without the government providing you with a role of toilet paper and an instruction manual.
The last bubble was a debt bubble, plain and simple. You cannot get yourself out of a debt bubble by taking on more debt. That you can’t grasp this is hardly shocking, but I’ll explain.
The only thing that actually ended the Great Depression was massive investment by the private sector following the 1948 downturn, coupled with the utter destruction of the assets of foreign competition thanks to WW2. The minute these countries got back on their feet by the late 1960s-early 1970s, inflation kicked in full force and we’ve been living on borrowed money ever since. The savings and loan, dot.com, and housing bubbles were the incarnations of this phenomenon–the search for a bigger fool to buy overvalued assets before the bubble popped.
The notion that “GDP went up, so the economy is recovering” in this current environment is a joke. Almost all of that GDP is coming from government debt. Across all sectors of the economy, total debt is at 350% of GDP, yet the ONLY sector that isn’t deleveraging is the federal government. Your claims that the economy is recovering when sales and income taxes have fallen through the floor is laughable and ignorant. The GDP went up during the housing and dot.com bubbles and guess what–we ended up in exactly the same place when they finally popped.
You can’t solve the problems caused by a debt bubble by taking on more debt. Period. Especially when that debt is being bought on the back end by the Fed or by foreign nations who will eventually cut off the credit card.
Take an average neighborhood–five families in this neighborhood are all deep in debt. Four of the families see their predicament and cut their spending to the bone, pay down what debts they can, and save whatever is left over. The fifth one continues to take out loans, runs up even more credit card debt, and never pays down a penny. Sure, the fifth family might have that fancy new TV, brand new automobile, and took a vacation to Disneyland–those memories will be all they have when the bank finally comes to take their house, kick them on the street, and sells the TV for pennies on the dollar to recover their debt. The federal government is adopting the latter course, and in this case, China and the American taxpayers are the bank. Do you really think that Obama can keep up this Janus-faced approach to deficit-spending (complaining about it while he spends at levels Bush only dreamed of) without being called to account eventually? You’re bigger dreamer than I thought.
Government is not going to save you. This fantasy notion that “an increased GDP” will make things all better is not going to save you. You are hedging your bet of economic recovery on not just the government, but all Americans, spending themselves into massive, unsustainable debt again–and we all know how that’s going to end.
Another Chris (2d8013) — 2/2/2010 @ 11:51 amThe economy didn’t grow 5.7% in the last quarter. It grew at that annual rate. So a fourth of that… ya know, that’s what “quarter” meant.
And when you subtract the deficit, it probably shrank. The numbers are easy to play with. While they are better numbers than the quarter before, they probably won’t last if sustaining jobs don’t show up in great numbers.
I don’t know why democrats keep claiming the economy grew 5.7% in a single quarter. Probably trying to repeat something they heard but didn’t understand.
Dustin (b54cdc) — 2/2/2010 @ 11:56 amtimb has always regurgitated long-debunked economic myths. And no amount of reality will dislodge those from him.
The hilarious thing about timb claiming Krugman’s credentials for his hack economics is that Krugman will happily write political tracts that flat-out contradict the actual academic work that got Krugman his Nobel. ( Not to mention rewrite the history of even his own political tracts – as recently when Krugman claimed that the $800 billion stimulus was not enough and that he’d said so all along; when in fact he didn’t.
That’s why Krugman is a joke among those who actually study economics. Because Krugman is a political hack.
SPQR (26be8b) — 2/2/2010 @ 12:05 pm“Actually, it was 12 million men going into the military, kids”
so 12 million men, taking on government jobs. I see.
“I’m sure you haven’t read Amity Schlaes’ book ”
Or they’ve read what economists have to say about her book.
“The last bubble was a debt bubble, plain and simple. You cannot get yourself out of a debt bubble by taking on more debt. That you can’t grasp this is hardly shocking, but I’ll explain.”
You get out of a credit bubble by having credit markets contract. They’ve done that.
[note: fished from spam filter. –Stashiu]
imdw (79d4a3) — 2/2/2010 @ 12:54 pmI would not let imdw within a mile of my family budget, or checkbook.
JD (61d2c1) — 2/2/2010 @ 1:13 pmYou get out of a credit bubble by having credit markets contract. They’ve done that.
No you get out of a debt bubble by having debt contract (not “credit”). It’s gone down some, but at 350% of GDP it’s not nearly enough. And since the government refuses to contract its own debt, we will continue playing this “extend and pretend” game. Fortunately, with so much debt tied up in both the public and private sectors in MBS’s, the OptionARM and Alt-A resets next year may be enough to nip the current delusions in the bud.
Like I said, you’re counting on the economy recovering through another massive expansion of unsustainable debt. If you or timb can’t see the utter foolishness of that course of action, then the only hope is that more people don’t adopt that same attitude, and that the people in charge of government eventually reject it in practice more than in words. Otherwise, be prepared for an even greater collapse down the road.
Another Chris (2d8013) — 2/2/2010 @ 1:38 pm“I would not let imdw within a mile of my family budget, or checkbook”
Unfortunately, I live in CA where .50BMG rifles are unavailable; so, I’ll have to wait until he gets within range of the stuff I have. //sarc.
AD - RtR/OS! (eadee4) — 2/2/2010 @ 2:00 pmAD, dude. You need to check out the .416 Barrett. It will get the job done for you.
SPQR (26be8b) — 2/2/2010 @ 2:08 pm“Like I said, you’re counting on the economy recovering through another massive expansion of unsustainable debt. ”
A lot of our previous debt was unsustainable by individuals and companies because it was to purchase overvalued assets and/or based on unlikely future income. We don’t have to do the same with debt to that works to shift a future boom’s production to this downturn.
imdw (688568) — 2/2/2010 @ 2:11 pmYes, let’s just steal the future’s productivity to pay for our “downturn”.
Let’s not stop spending money on ridiculous crap today. That would be unfair.
Dustin (b54cdc) — 2/2/2010 @ 2:17 pm“Actually, it was 12 million men going into the military, kids”
so 12 million men, taking on government jobs. I see.
Yes, at $21 a month. It cured unemployment by appealing to patriotism. Hitler did the same thing in 1933 and a lot of people thought Germany was a booming economy. It could not have lasted long which one reason why Hitler kicked off the war two years before his generals said Germany was ready.
The real difference was that Truman was a much more humble and sensible man than FDR.
Nobody reads about the 1920 depression, which occurred at the end of WWI. Why don’t they read about it or study it ? Because it was over by 1922. How did that happen ? Harding and Coolidge cut government spending in half. The recovery followed.
Mike K (2cf494) — 2/2/2010 @ 2:19 pmof course, the spin goes that the spending today will facilitate the future productivity. This is the opposite of the truth, but that’s the spin.
Inflation and dept problems and this crushing burden will do anything but facilitate the good life in the future.
Dustin (b54cdc) — 2/2/2010 @ 2:19 pmA lot of our previous debt was unsustainable by individuals and companies because it was to purchase overvalued assets and/or based on unlikely future income. We don’t have to do the same with debt to that works to shift a future boom’s production to this downturn.
Where is the boom coming from? WHERE? I’ve asked you this repeatedly and you’ve refused to answer it EVERY SINGLE TIME.
You have nothing, imdw. Zilch. There is NO sector of our economy with a sustainable industry that a nationwide boom can be built on anymore. We shot our last wad with the housing boom because everyone from the banks to buyers were stupid enough to see homes and real estate as ATMs rather places to live.
The ONLY reason that there is a stock market boom right now is because the Fed, Fannie, and Freddie have been taking on MBSs and toxic loans like crazy, and the government refused to make the banks acknowledge the trash on their ledgers.
The subprime resets killed a number of financial institutions; the OptionARM and Alt-A resets have the potential to finish off the rest. Even if they don’t take them down completely, those peddling the idea that we are walking out of a storm and not through the eye of a hurricane are woefully misinformed.
There will be NO sustainable recovery until the debt is reduced. Period. Everything else is “extend and pretend” by politicians who care more about the next election cycle than the long-term health of the country. And if you refuse to see that, you are just as bad as they are. At least the politicians do it out of their own self-interest; normal citizens do it because they don’t want to accept that the universe doesn’t owe them a living.
Another Chris (2d8013) — 2/2/2010 @ 2:27 pm“of course, the spin goes that the spending today will facilitate the future productivity.”
It depends what the money is spent on.
imdw (8f8ead) — 2/2/2010 @ 2:28 pm“Where is the boom coming from? WHERE? I’ve asked you this repeatedly and you’ve refused to answer it EVERY SINGLE TIME.”
What do you mean “where” ? From the economic cycle. Or do you think we won’t have any more cycles? We’ve been through this kind of thinking. During dot-com.
imdw (c72853) — 2/2/2010 @ 2:30 pm#64 SPQR:
I’ve always thought of him as a punchline in search of a joke. A matter of perspective, I suppose.
I’ve always been fascinated by the idea that WWII ended the Depression, because I have never understood how a period of even greater privation in living standards could be considered the end of an economic depression. While there are some other factors to be considered, as Another Chris mentions above: the state of foreign economic competiton, for example~I think it was really the end of the war that ended the Depression. You had a huge influx of competitive entrepreneurs that entered the market place, along with a rebuilding of market capitalization, not only in durable goods as excess capacity was turned to producing consumer goods, but intellectual capacity as many veterans returned to school that had been deferred, and so on.
In fact the war itself was paid for with deficit spending, which had to be made up over time, and was, up to then, the largest deficit the US government had ever run.
EW1(SG) (edc268) — 2/2/2010 @ 2:31 pmComment by SPQR — 2/2/2010 @ 2:08 pm
Held it at the SHOT Show last month, and it is nice…
AD - RtR/OS! (eadee4) — 2/2/2010 @ 2:31 pmBut, for the $8K+ that it will cost you, it had better be.
^arguing with the above is akin to a Bobo Doll – offer facts in evidence and it just pops right back up with rejoinders without substance.
I find it hilarious that both timb and imawhatever never offer substantative cites to buttress their wild – ass claims, or when they do the cites are so partisan as to beg incredulity.
Dmac (539341) — 2/2/2010 @ 2:36 pm“…In fact the war itself was paid for with deficit spending…”
In 1945, the National Debt was 122% of GDP!, the highest it has ever been in that measure.
And, I’ll repeat, the Dow Jones Industrial Average did not match its’ pre-crash (10/29/29) highs until November 1954, after much of that debt was paid-down by an expanding economy driven by the forced savings of WW-2, and the pent-up demand unleashed by the end of war-time controls.
AD - RtR/OS! (eadee4) — 2/2/2010 @ 2:41 pmTo those who tout Paul Krugman as an economist, do be careful…
“That is, I’ve always believed that a speculative bubble need not lead to a recession, as long as interest rates are cut quickly enough to stimulate alternative investments. But I had to face the fact that speculative bubbles usually are followed by recessions. My excuse has been that this was because the policy makers moved too slowly — that central banks were typically too slow to cut interest rates in the face of a burst bubble, giving the downturn time to build up a lot of momentum. That was why I, like many others, was frustrated at the smallish cut at the last Federal Open Market Committee meeting: I was pretty sure that Alan Greenspan had the tools to prevent a disastrous recession, but worried that he might be getting behind the curve.
However, let’s give credit where credit is due: Mr. Greenspan has cut rates since then. And while some of us may have been urging him to move even faster, the Fed’s four interest-rate cuts since the slowdown became apparent represent an unusually aggressive response by historical standards. It’s still not clear that Mr. Greenspan has caught up with the curve — let’s have at least one more rate cut, please — but the interest-rate cuts do, cross your fingers, seem to be having an effect.”
– Paul Krugman in 2002
“In time this overhang will be worked off. Meanwhile, economic policy should encourage other spending to offset the temporary slump in business investment. Low interest rates, which promote spending on housing and other durable goods, are the main answer. But it seems inevitable that there will also be a fiscal stimulus package”
– Paul Krugman in October, 2001
GeneralMalaise (55c598) — 2/2/2010 @ 3:04 pm“And, I’ll repeat, the Dow Jones Industrial Average did not match its’ pre-crash (10/29/29) highs until November 1954, after much of that debt was paid-down by an expanding economy driven by the forced savings of WW-2, and the pent-up demand unleashed by the end of war-time controls.”
I see you’ve been reading amity shlaes. Does she ever mention why we’d want to use the measure of the pre-crash high as the measure of recovery? Isn’t part of the problem that the market was overvalued at that time?
imdw (de7003) — 2/2/2010 @ 3:17 pmimdw, I don’t know why I respond to your jibes. What would you compare to ? People like you prefer soft numbers so you can fudge them more easily. Well, you’ve got the fudger in chief running things now. Among other things, the 1954 Dow Jones was in inflated dollars.
Mike K (2cf494) — 2/2/2010 @ 3:26 pm“What would you compare to ?”
You know things like employment — total and as a rate — gdp, personal consumption etc…. Does she not explain why she uses the overvalued DOW peak?
imdw (017d51) — 2/2/2010 @ 3:30 pmWhat do you mean “where” ? From the economic cycle. Or do you think we won’t have any more cycles? We’ve been through this kind of thinking. During dot-com.
Oh, the “cycle”–so in other words, you can’t decide which industry is going to be the one to carry us out of this depression. It’s just going to magically get better, with no internal or external forces to put it into play. And citing the dot.com bubble is even dumber, because people eventually got wise to the fact that investors were throwing money into worthless trash companies.
Betting on the “cycle” is what caused the Obama administration to predict the stimulus would cap the U3 at 8%.
If you’re going to try and BS on this topic, at least make an honest effort. This has been pathetic.
Another Chris (35bdd0) — 2/2/2010 @ 9:38 pmimdw, employment rates are just another measure where FDR’s performance in getting the US out of the depression failed. Employment stayed low compared to other industrialized nations for many years after they saw recovery.
SPQR (26be8b) — 2/3/2010 @ 7:41 am