Monday, November 24, 2008

Not So Fast There, Mr. President-Elect...

Excerpting from and commenting upon President-Elect Obama's Press Conference:

...if we do not act swiftly and boldly, most experts now believe that we could lose millions of jobs next year.

And if the swift and bold "action" relies upon false premises and faulty advice - what then? What if the new administration steers the American Ship of State in the WRONG DIRECTION, full speed ahead?

This is not random speculation, fear-mongering, or adversarial partisanship. Obama supported the first "stimulus package" pushed by Bush, Reid, and Pelosi last year. How'd that work out? Obama supported the original bailout. Same question - how's that worked out so far?

...move forward in a new direction to create new jobs, reform our financial system, and fuel long-term economic growth.

What new direction? Serious question. WHAT new direction...??? If by "creating jobs" the President-Elect is referring to throwing piles of borrowed (at interest!) and printed (allowed via increasing the debt ceiling) money at the construction unions and fulfilling the Christmas wish lists of America's top corporate executives for corporate welfare then all I can do is point out to liberals, moderates, and conservatives alike that there's nothing "new" down that road.

...we know that rebuilding our economy will require action on a great variety of fronts: from education and health care to energy and Social Security. Without sound policies in these areas...

Again. What action? If the highway to hell is paved with good intentions and the devil is in the details... well... Beelzebub is probably hitching along the Washington D.C. Loop at this very moment looking for some poor sucker to offer him a ride into town. administration will honor the public commitments made by the current administration to address this crisis.

Meaning spending. Meaning debt.

Folks. Again. Especially any liberals reading this. If you hated Bush's economic policies, you might want to consider... Obama's economic policies sound uncomfortably like Bush's economic policies on steroids. If you critiqued (with good reason!) the spendthrift ways of the two preceeding Republican Congresses, fasten your seatbelts... you ain't seen nothing yet!

...we need to restore both confidence in the markets...

And you believe decoupling "income" - revenue - from spending will do the trick? You believe out of control deficit spending and debt creation, piled on top of unfunded liabilities approaching $92.2 TRILLION on Social Security and Medicare alone are the stuff "confidence" is made out of? God help us.

Our families can't afford to keep on waiting and hoping for a solution. They can't afford to watch another month of unpaid bills pile up, another semester of tuition slip out of reach, another month where, instead of saving for retirement, they're dipping into their savings just to get by.

But... but... but... (*SCRATCHING MY HEAD*)

But that's what you're proposing as federal government policy under the Obama administration! You're talking new financial commitments when there's not enough money coming in to pay for old and existing financial commitments! You're talking borrowing more and more money with no prospect of ever being able to pay the principle back and as for the interest... as time goes by interest payments just to sustain the unrepayable debt will crowd out other spending priorities.

And to make the investments we need...

"Investments...?!?!" Governments do not "invest;" they SPEND! An "investment" is supposed to garner a return - a concrete financial return. Interest. Dividends. Capital gains.

You invest in a private company. Your profit - if any - is based upon that business' profit. They have to make money with your money - make enough money, enough profit, to not only pay back your principle, but pay it back with interest, all while having also made a profit themselves.

This isn't the way government "investments" work. Not on either end. The government doesn't make an actual financial "profit" on the money it borrows via T-Bill, bond issuances, etc. Thus, when the government "repays" these loans, they're not repaying the loans via a percentage of the profit they themselves made utilizing the loan to make a profit; rather, they're repaying interest and principle via their taxing authority, via new borrowing, and/or via simply printing currency.

...we have a consensus, which is pretty rare, between conservative economists and liberal economists, that we need a big stimulus package...

No. No we don't. Not so fast there, Mr. President-Elect. Bill Barker votes "no." Anyone else?

...the 2.5 million jobs that I intend to create during the first part of my administration. We have to put people back to work.

Entrepreneurs create jobs - politicians don't; not even presidents. People like Steve Jobs and Bill Gates create jobs. People like Barak Obama - or John McCain if you'd rather - don't. What people like these do is spend our money and take the credit if there's success and duck the responsibility if there's failure.

...across the board, people believe that this stimulus is critical.

Again... putting aside how much the average American knows about Keynesian economics... (*SMILE*)... the average American puts his or her own money directly on the line when he or she believes "stimulus" is warranted. No, Mr. President-Elect, I'm not so sure that the average American is enamored with borrow and spend credit rating destroying economic policies... print and spend inflationary smoke and mirrors... (*SIGH*). The average American wants government to spend within its means - our means - not beyond them. That's what I believe.

...the first job of my economic team is to shape that economic stimulus package so that it is delivering on the 2.5 million jobs that we talked about and is also providing a down payment on the long-term strategies we need in terms of making this economy work for all Americans.

Hold it!!! In order to have a "down payment" aren't... err... savings... usually the first step? In other words, you have to have something in the first place in order to have something to put down. (*SHRUG*) Again... deficits... debts... future liabilities. Obama's "plan" sounds a lot like the "plans" of all those folks who leased Mercedes and Lexus' while buying McMansions they couldn't afford on zero down payment, five-year initial fixed rate plans. (*FROWN*)

That means we have to invest in clean energy. We're going to have to invest in the systems in our — in health care that can reduce costs for families and for businesses.

So Obama is going to support, push through, and begin construction of 50-100 nuclear power plants spread throughout the nation, and they'll all be completed and online by 2016? FANTASTIC!!! Why didn't he say so before?!?!

(Oh... you mean that's NOT the plan...??? You mean that's the furthest thing from the President-Elect's mind? No new nuclear plants? How'bout refineries - government built and owned refineries - a logical extension of the strategic petroleum reserve concept - that the government would lease out to for-profit American companies on a "need basis" so as to better be able to quickly react to sudden future shortages of refined petroleum products so as to blunt price increases which would otherwise be shouldered by the American consumer? No? That's not gonna happen either? Well... he's in favor of digging, right? Dig here, dig now...? No?!?! No drilling either? I'm NOT getting a good feeling about the future.)

It means that we're going to have to invest in the education system...

(*SNORT*) He's kidding - right...? That's all we do is "invest" in the education system! What about reform? What about accountability? What about coming up with "a plan" that amounts to more than throwing money (money we don't have!) at the problem? How about instead of starting with the question "How do our kids afford four years of college?" we ask the following two questions instead: "Why isn't an American high school education of sufficient quality to prepare our young people for entering the work force?" and "Why a FOUR year college undergraduate degree - why not refocus our efforts into offering a useful and meaningful college undergraduate education that can be completed in three or even two years of full-time study - saving a year or two of tuition and housing?"

(You want CHANGE...?!?! Now THAT'S a proposal for change!)

I said during the campaign that my plan represented a net tax cut. And that's important to remember: 95 percent of workers in this country would receive a net tax cut under my plan.

More spending... less taxes. (*SHRUG*) What's the Obama diet - eat more, weigh less...??? Seriously... who knew, who would have thunk it, after all these years... the Democratic Party has apparently come to the conclusion that 95% of Americans are overtaxed!

(Hmm... what ever happened to PayGo?)

We're going to be putting money into people's pockets so that they can spend on buying a new computer for their kid's school, so that they can, you know, make sure that they are able to deal with heat and groceries and all the other strains on family budgets.

No. You're going to BORROW money from the Chinese and others at interest, indebting us, our children, and our grandchildren. You're going to simply print money too, and I don't care how many economists are presently throwing around the word "deflation," what I see is stagflation coming back full swing in 2009/2010. Bush's policies did a job on the dollar; we ain't seen nothing yet though. (*SIGH*)

Seriously... if just throwing money at people is such a great idea, why not just cut every American - each man, woman, and child - a check for $1,000,000. I mean... if it's that simple and if it makes that much sense, why can't we all be instant millionaires?!?!

Oh... and by the way, Mr. President-Elect... that new computer you want that family to buy - chances are it's made in China. The factory is in China. The workers are Chinese. The profits are going overseas.

...if we're going to help pay for some of these expenditures that are absolutely necessary to get our economy back on track, that those who are in a position to pay a little bit more do so.

Oh! Great! You're interesting in paying for "some" of these expenditures! Outstanding!!! As to increasing taxes on "the rich"... I'll believe it when I see it. Forget issues such as "fairness." I'm simply talking nuts and bolts cause and effect. The truly rich have teams of accountants, tax attorneys and financial planners ready to "deal" with anything you can throw at them. Worse case, they'll move overseas. As for those making $150,000/$200,000/$250,000 a year... how much is enough, how much is too much, how much is too little? Anyway... we'll see how things work out in the real world I suppose.

I want to emphasize is that there is a consensus among across the political spectrum that we need a stimulus...

Nope. Sorry. No consensus here! (By the way... wasn't there a consensus back in 2002/2003 that Saddam definitely had chemical weapons, probably had biological weapons or at least the capability to create them in short order upon demand, and that he had a secret viable nuclear weapons development program or at least could start one up at any time...??? Forgive me if the word "consensus" doesn't overly impress me.)

...we can't allow the auto industry simply to — to vanish.

I agree. BUT... this doesn't mean I'm in favor of a federal bailout nor of the federal government taking a managerial role in the auto industry. Bankruptcy and structured reorganization is the ticket. It's the legal/economic framework we as a society have created for such situations and I see no need to FORCE American taxpayers to "invest" in private companies via their tax dollars.

A so-called "pre-packaged" bankruptcy. That's the ticket. As I understand it, this is what President-Elect Obama is leaning towards and if this is indeed the case he'll have my support.

And on that note... (*WINK*)


Rodak said...

I take that your point of view is premised on continuing to maintain that we are being lied to about a credit crunch, and that there is plenty of credit readily available for entrepreneurial start-ups that will employ the millions of workers displaced by bankruptcies and failures?

William R. Barker said...


As a literary type of guy (*WINK*) no doubt you agree "man does not live by bread alone."

Same goes for credit.

Again, throwing good money after bad - especially LOANED or simply PRINTED "good" money after bad - is anything but economic brilliance.

My "point of view" is prefaced upon basic common sense and short/mid/long term economic reality. Period.


Rodak said...

But it offers no solution to the problem. Nor did you answer my direct question.

William R. Barker said...

I did answer your direct question. (*SHRUG*)

No, we're not be "lied" to regarding credit being tighter than it was before the $hit hit the fan; but yes, we're being "lied" to when we're told that there's no choice other than bailouts.

I've tried to explain this to you dozens of times. (*SHRUG*) I don't see what's so confusing.

Not to throw Newton at you, but to paraphrase, every action has consequences and as I've written time and time again, I believe that the long run consequences of all these bailouts and various "stimulus" plans will do more long term harm than good for our economy and our nation.

You've heard of the law of unintended consequences? Well... there are consequences to taking on debt. Sometimes the consequences are worth it, sometimes they're not. (*SHRUG*)

Consider yourself as an individual. Chances are you went into debt to buy your house. That's fine. SUPPORTABLE debt. It wouldn't have been fine if you had bought a bigger, better, more expensive house than you could afford though. There's a point - a line - that separates "reasonable" purchase from unreasonable purchase... be it a house or a car for an individual... be it bailouts or military budgets for a nation. (*SHRUG*)

Rob. Be it in the past on RT or presently here at "Usually Right," I have and will continue to strive to answer specific questions and give my views on specific actions and proposals as well as of course rambling (*WINK*) about "Big Picture" theory.

You ask for solutions. (*SHRUG*) There is no "one big single solution," Rob; what I try to do though is comment of a variety of specifics as well as share broad guidelines of my thinking on "the Big Picture."

How'bout you? Do you have any specific cheers, boos, or questions regarding Obama's speech and press Q&A from yesterday which I critiqued? You're welcome to share your critique of Obama's presentation here, as well as sharing your specific critique of *my* critique of Obama's presentation.


Rodak said...

It seems clear to me that Obama needs to enable something that will have an impact on the economy equal to the impact that the New Deal, plus WWII, had on the economy during the Great Depression.
People have to have jobs, or everything stops.
Am I for bailing out Citi Bank, et al? No. Am I for keeping the Big Three up and running? Yes.

William R. Barker said...

re: RODAK; November 25, 2008 10:43 AM

"Am I for keeping the Big Three up and running? Yes."

So may I assume that regardless of what Bush or Obama support and regardless of what Congress does that you'll be investing your personal assets in GM/Ford/Chrysler stock and bonds?


Rodak said...

My personal assets. That's funny.

Anonymous said...

Rodak's personal assets consist of a well-worn copy of "Das Kapital for Kids," an autographed picture of Euell Gibbons, and a Grateful Dead ticket stub from 1973 (LOL).

Rodak said...

Shit. All of those things would undoubtedly be worth something to somebody.

Anonymous said...

I'd take an autographed box of Grape Nuts from Gibbons!

(That's "GRAPE NUTS," Mr. Sullivan, not "Grab nuts" ...)

Rodak said...

I thought it said "Rape Grunts"...

Anonymous said...

No, that was the Army under Clinton and Black Democrats:

Rodak said...

I guess his name shoulda been Gene Pool McKinney!