Week 6 Blog

I was reading an article on the online version of the U.K.'s "Telegraph" in which Simon Heffer says that perhaps Barack Obama can't fix America. Heffer said that the pork spending that America is spending with the stimulus bill, which is somehow still being talked about, may put our nation in eternal doom. He mentioned the fact that there is a book by Ayn Rand about how America is destroyed by high taxes and a reliance on welfarism, and Heffer sees the significant resemblance when he looks at America today.

Here's my take on this article. It's good, I'll give it that. But I don't really agree with anything he said. How can we see that this president will do a bad job? Who is to assume that even if he is issuing pork with his package, that it won't help the country escape the reality that is the recession in America. Ever since the package has been signed into law, for example, the stock market has been going up. Isn't that a sign that we may be rebounding, and that, who knows?, the recession may be coming to an end? How much of the credit goes to Obama? It will be very interesting to see how things go the next fifty days of his presidency, after the first fifty days haven't really given us enough yet to judge how good or bad of a job he is truly doing.

While perusing the net, I happened to see Steve Forbes's op-ed on forbes.com that was inquiring Obama as to why he has not taken the Abe Lincoln approach of firing incapable leaders. He focuses the article on why Tim Geithner and Ben Bernanke still have jobs, when they obviously can't perform.

In the case of Tim Geithner, the new treasury secretary, Forbes argues, has done nothing to do away with the principle of mark-to-market. This principle has been losing money on the book and, while they have more money, the banks have less regulatory capital to use, due to auditors fearing a lawsuit if they do not take action. In the instance of Bernanke, the chairman of the Federal Reserve, Forbes notes that Bernanke has made every mistake possible in creating and dealing with this economic process. He has shrunk the balance sheet of the Fed to $400 billion, which Forbes compares to firemen rolling up hoses in the midst of a large fire.

Overall, very good point made by Forbes. These men clearly have made mistakes, and I would appreciate it if Obama could realize that these men are not doing the job that they signed up for. We need competent leaders if our country is to succeed, and, right now, they aren't showing too much competence.

Finally, I saw something in the Washington Post by Harold Meyerson that, like the article above, criticized Geithner. He said that it is unbelievable that Geithner has not fired the CEO of AIG, Ed Liddy, after it was revealed that Liddy had given our money to its workers as bonuses. Instead, in the eight weeks since Obama got inaugurated, Geithner has decided to be nice to banks and insurance companies. Meyerson thinks the solution to this is simple. Naturalize these companies. 56 percent of Americans, including Alan Greenspan, support this idea already. That way, the government can appoint trustworthy leaders and prevent situations like the one at AIG.

I definitely agree with this article because it is quite clear that we need more government intervention in these companies, and nationalizing them would help us tremdously.

Week 5 Blog

Economy: Obama's Fault?

I read an article on realclearpolitics.com, that a very interesting argument about who to blame for this economic mess we are in right now. In the end, he points his finger at President Obama, but his reasoning is interesting. The author, David Harsanyi, notes that it would be too early to blame the President, except for the fact that "Obama had not worked early to support agenda-driven omnibus pork bills, job-killing cap and trade schemes, and union assaults on workers' rights, to name just a few of his priorities." Harsanyi notes that the people Obama appoints to fix the economy, such as Treasury secretary Timothy Geithner, whos explanation of the bank bailout plan plunged the market down further recently. Harsanyi states that because Obama has drained his political capital towards "furthering ideology rather than economic growth," that this is his mess.

I think it is certainly a valid argument by Harsanyi, but I do not buy into it just yet. I don't think we really know yet about the quality of the bank bailout and the stimulus plan yet because we have not had enough time to observe its effects. Plus, the economy may have already reached a bottom this past week, when the market rose significantly on Tuesday. So for now, I am content on blaming Bush.

And the reason that I think I have the right to blame Bush is simple. Hey, we spent eight years with him, he had time to let his ideas try to shine through, and that didn't happen. Maybe Obama is smarter than all the critics, and maybe his plan isn't just a bunch of pork. Heck, the critics could be right, but it is too early to tell.

Speaking about the increasing market, I saw an interesting article on nyt.com this week detailing the boom in the stock market. The author, Thomas Friedman, likened this gain to the first day after a tragedy, making it the 9/12 of the stock market. At this time we need unity to keep this nation on track. However, Friedman notes that at this time the Republicans would rather see the Democrats fail, so that the Republicans can win elections, rather than see the nation succeed. It was documented before in clear words when Rush Limbaugh said that he wants Obama to fail.

Friedman also acknowleges that we need to keep helping the companies such as AIG, Citi, and GM get eaten up by the market, then the country will fail along with it. So, the article gives us a lot to think about. Overall, the gist of it is that no matter what happens, the Republicans will find a way to blame the Democrats, and some will even want the country to fail just for the Republicans potential gain.

Why is this? I don't remember the Democrats rejoicing over every Bush error over the past eight years. It is interesting to me how this whole hope-the-other team fails thing is a trait owned by just the Republicans. The Democrats seem to have a grown up opinion about everything.

Finally, a third article I found was on CBSNews.com. Declan McCullagh said that we can no longer achieve the days where the Dow Jones was 14,000, no matter how much stimulating the government does. He called into question the man in charge that put a stimulus bill into action trying to rescue AIG, Fannie and Freddie, GM, and all these companies that are struggling. He stated that we simply cannot fix all the problems and save all the companies and until we realize this the economy is in trouble.

I think he has a good point, but only to a degree. These are big companies, and if they shut down, like the Times article mentioned, it could be failure to the country. This isn't bailout money going to the small-chain restaurant down the street that employs 30 workers. This is much bigger than that. Millions of jobs are at stake with these jobs that are in trouble. Millions of people have mortgage problems. You can't just ignore the problem. What you can do is lessen it to a degree by not spending as much, but that's only my opinion.
Is that possible? I have no idea. But maybe you could spend less money in the stimulus bill and try that out. It's too late now, but heck, if it ends up working, I'm all for the stimulus bill fixing the economy. The likelihood though is that this one thing will not salvage the economy alone.

Week 4 Blog

An economy in turmoil?

With the stock market suffering extreme losses this week, signified by the Dow's closing number below 7,000 Monday, the first such event in twelve years, the question has to be asked: Is the country losing trust with Obama's economic policies.

An article on the Wall Street Journal website this week proved to be very critical of the Obama administration early on, and remain weary that the policies that he is invoking could in turn increase the length of the recession Americans are living in. The article notes that ever since Obama released his budget plan, the market has been falling even further, and that is largely because the document "is a declaration of hostility towards capitalists across the economy." Finally, the article argues that for now, and maybe the next two or three years, the Obama campaign can blame Republicans for the downfall and live off of their mistakes by simply placing blame on them. The article, earlier on, mentioned figures to go along with its argument that the economy is getting worse with the Obama bills and argues that they may increase the length of the recession.

I find this article very interesting. The article presents many valid arguments, many of which I do not fully understand the language of, but can tell from the context that they are valid points. I must admit that I am not as big of a fan of Obama now as I was when he first got elected. I still support him, and think that he can and hopefully will do a great job, but there really are no immediate positive results since he has been elected, only dark, negative ones. One of those is the stock market, that keeps freefalling at a seemingly unending pace. Another is the tax increases on the wealthy? Will this truly help spread the wealth, or will it in turn take down the economy as we know it? Time to get some other viewpoints.

Anderson Cooper made an argument on CNN.com this week that perhaps the President is trying to do to many things at once to be as effective as necessary to combat this worldwide economic crisis. He notes that with all the things he is trying to do this early on in his presidency, including an overhaul of the healthcare industry and a complete change to our energy policy, it is tough to "laser in" on the economy, which continues to sink further and further as the days go on. Basically, Cooper's main point is that Obama should not ignore the other issues, but should focus on the more "vital surgery" first and then worry about the minor operations.

Once again, a CNN writer speaks to me. I think this is a great point. Now that I think about all that Obama has tried to/already accomplished, it comes as no surprise to me that the economy is lagging behind. Since he has become President, Obama has set forth a plan to close Guantanamo Bay within the year, has proposed to slowly withdraw troops from Iraq and focus more on Afghanistan, as well as his attempts to overhaul the healthcare and energy industries mentioned above. Obama has focused on climate change, which is a radical change to the Bush days, when the former President denied in many instances the significance of global warming on our planet. So, that leaves a question. What has Obama done for the economy? Well, that massive stimulus bill he passed comes to mind immediately. But that hasn't really shown immediate results yet, and we may not know if there will be results for years to come. What we have noticed is the stocks are continuing to plummet, and if we cannot establish rules on how to handle the banking industry effectively, for instance, then maybe we will get a lot worse before we get better. Experts have already said that the chances of us becoming involved in a minor depression have now already increased to one in four, so if Obama is not able to narrow down the focus, perhaps we could be headed down that road.

William Murchison wrote an article for Real Clear Politics that, quite frankly, confuses me. It appears through a good portion of the article that he may be supporting Obama, but at the end he takes a shot at him, in my opinion. He starts off the article by giving the New York Times viewpoint that Conservatives are messed up in their viewpoints, which consist of rallying AGAINST Obama. What he then tells us to do, Murchison I mean, is to listen to those people that the Times do not like. He then goes on to talk about the good and the bad news, in reverse order, of the budget that Obama recently announced to us, which includes a 1.75 trillion dollar deficit.

Murchison starts off with the bad news. He says that Obama wants our nation to be run by, but not owned by, the national government. He then provides that argument that:

"We approach, under Obama-ism, centralization of a sort unattempted here since, under infinitely grimmer economic circumstances, the first New Deal. Mr. Jefferson foresaw something of the sort."

He also incorporates a quote from Tocqueville that basically says when this happens it leaves the people as timid animals unable to control what goes on with their finances, instead being forced to obey their owners, the federal government.

Then Murchison goes into the good. He argues that because Obama wants to finance what is basically a national healthcare plan and end the war in Iraq by taxing the rich, and this process, even if taking every penny from the rich, is unfeasible, that he is overreaching, and the dire economic consequences that could happen if some of Obama's plans came true shouldn't be feared because they simply won't happen.

Okay, now I see where I went wrong in interpreting the article. Murchison NEVER praises Obama, and I don't know how I missed that. He is simply betting that Obama's plans will never come to fruition because the President is overreaching. I think he is wrong. I think Obama's plans, especially with the Iraq war and national healthcare, can get done, and that has nothing to do with him overtaxing the rich. I guess we will have to see how things work out, but I just interpreted this article to be a very pessimistic view of the man in the White House.