Obama team promotes massive economic recovery plan

Monday 24th November, 06:16 AM JST

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Betzee at 12:33 PM JST - 24th November

GoodDonkey,

I remember in the wake of the news Wall Street would require a USD 700 billion bail out a commentator correctly observed, "This means Obama cannot immediately restore the Clinton tax code on the wealthy nor can McCain make GWB's tax cuts permanent [given our repayment obligations have been upped another trillion]."

The rich realized they could not prosper in a tanking economy. I mean who cares what the capital gains tax is when you're racking up losses? They saw Obama as the best guy to get us out of this.
SedanDelivery at 02:34 PM JST - 24th November

The topic is business and economics and most people come armed with editorials and pet theories and blame for George Bush.

It is kind of funny to recall that when the economy was good American liberals' biggest economic fear, from what I could tell, was the Wal Mart model.

Do you see Wal Mart begging for a hand out?

Nope.

Business is better than ever.

"Jason Furman, a Brookings Institution economist who also has advised Barack Obama, has written that Wal-Mart's low-price savings to America came to $263 billion in 2004, or something like $2,329 per household."
GJDailleult at 05:10 PM JST - 24th November

“We’re out with the dithering. We’re in with a bang.”

And Sarge asked "why was there dithering up until now?" Actually, I don't think he was referring to the Obama transition. He was talking about previous administrations, and in particular Clinton's in 1992. Surprised that sarge missed that not so subtle dig at his favorite president, especially coming from a Democrat.
VOR at 05:13 PM JST - 24th November

Dear Leader and his central planners appear hard at work. Warm up the presses fellas and get lots more green ink, we got some printing to do.
goodDonkey at 05:58 PM JST - 24th November

RR, first of all Neil Young hated Bush and was very vocal on several occasions. The goodDonkey may not see all but he sees through you.

American liberals' biggest economic fear, from what I could tell, was the Wal Mart model.

Wow you were able to able to ascertain that from the 10's of thousands of conservative articles you scanned. Tell me, how close was our concern that we might not obtain a socialist economy as one of our biggest economic fears?

"The topic is business and economics and most people..." can see that linkage to Wal Mart is non sequitur even if they don't recognize the Latin words. There is no correlation between Wal Mart making money because more people have turned to lower priced goods and the needs of our country to restore our economy or rehabilitate our financial structures. This is typical intransigent thinking i.e.: The NeoCon way is the only way to show strength. Supply side economics is the only solution to economic growth. Laissez-faire is the only sustainable economic model. Retail corporations, like Wal Mart will never play a vital role in stabilizing our economy due to brand or corporate identity. They simply serve to acquire, store (much less nowadays) and deliver goods to a consumer. Another company could replace Wal Mart just like Sears, Wards, etc. was replaced. A nation cannot rebuild an auto industry so easily. But I do not want GM's board to remain. Rich Wagoner and his competitors come begging with their tin cups in hand freshly flown in on a corporate jet. I think the chairman should lose his place at the helm. I am not against Chapter 11 Bankruptcy unless it would cause too large a proportion of consumers from purchasing autos because they lack confidence not understanding reorganization and fixating on the term bankruptcy.

Are many of the measures taken already leaning toward socialistic practices? You bethcha. We have far surpassed the intervention macroeconomics that evolved from the ideas of John Maynard Keynes. Right now our system is broken. We must act quickly to avoid anything like the Depression. I am a hands off capitalist kinda guy for the most part but the regulators did not do their job in recent years. There was less oversight and no adaptation to the new derivatives markets that have evolved. Credit default swaps are the perfect example of a totally unregulated derivative. In December 2007, the Bank for International Settlements reported derivative trades tallying in at $681 trillion - ten times the gross domestic product of all the countries in the world combined. I have a lot of respect for Milton Friedman. Just because we have had a crash I don't think it is appropriate to say his ideas had no value. I just think we need government intervention now because we are seeing financial institutions swirl down the drain and we will need their services again when our economy stabilizes. I also believe that we should stay away from Keynesian economics and look at removing regulations that are hindering commerce when times are good or even somewhat less than good. I still believe this is not a good time to enact trade barriers and I think other aspects of the Chicago School of Economics are still valid.

I am quite sure that Obama and team will have me rethinking everything I know about economics. I am quite sure I will be retracting and restating many of my views. He has brilliant economic advisers and will reshape many of the modern concepts of economics. But they will be insignificant compared to the entire world making a shift to accomodate a new model of finance and economics for the future. One old guy working towards a solution with Obama is Paul Volcker. He had his moment in history where he helped America turn a corner. I have stated before and I cannot state enough that Jimmy Carter's selection of Paul Volcker is what beat inflation, which peaked at 13.5% in 1981, and was successfully lowered to 3.2% by 1983. He used harsh measures by choking the money supply but Reagan was credited with this great success that was a product of Jimmy Carter's appointment.

I expect Obama's team to remain very flexible and responsive to whatever current economic conditions they will face. To those who doubt that Obama can improve our economy in four years I give you the immortal words of the late, great, Spiro T. Agnew,"we have more than our share of the nattering nabobs of negativism." Of course the NeoCons would be much more attracted to his quotes like, "pusillanimous pussyfooters" and "vicars of vacillation" and "the hopeless, hysterical hypochondriacs of history."
VOR at 06:05 PM JST - 24th November

goodDonkey, dear leader is looking for highly qualified propagandists over at the ministry of truth. you appear well qualified.
goodDonkey at 06:18 PM JST - 24th November

VOR said:

goodDonkey, dear leader is looking for highly qualified propagandists over at the ministry of truth. you appear well qualified.

Actually I'm not qualified at all. I don't have a degree in communications. I only had one speech class. I am not a great speaker. My degree was in Computer Programming and my graduate work was in Business and Economics. But you can keep recruiting. Although your request was for the "dear leader" in which your apparent interest lies. I think it is personal with you.
Sarge at 07:32 PM JST - 24th November

GJ - If Foolsby was referring to dithering by Bush, he's barking up the wrong tree, ain't he? After all, wasn't it Bush and his treasury secretary who pushed for an IMMEDIATE $750 billion bailout?

I second the motion to nominate goodDonkey for the position of Chief Propogandist at Obama's Ministry of Truth.
spudman at 07:43 PM JST - 24th November

immediate with no oversight. hardly Bush taking charge but rather abdicating responsibility. Bush couldn't manage a party in a brewery, he tried countless times. Super Obama to the rescue!! Barracuda!
goodDonkey at 08:34 PM JST - 24th November

Sarge

When you can't refute the arguments you go after the man. I accept your honors and will wear it like a badge.
goodDonkey at 08:37 PM JST - 24th November

Sarge said:

After all, wasn't it Bush and his treasury secretary who pushed for an IMMEDIATE $750 billion bailout?

"IMMEDIATE," oh Sarge you are hilarious. Bush was a few years, not months, too late to be anything close to immediate.
RomeoRamenII at 09:31 PM JST - 24th November

"Obama .... would not immediately seek to raise taxes on the rich"

Heh, The Revolution has been postponed until further notice.

RR
Betzee at 11:40 PM JST - 24th November

It is kind of funny to recall that when the economy was good American liberals' biggest economic fear, from what I could tell, was the Wal Mart model. Do you see Wal Mart begging for a hand out?

Nope. Nor is any other big box retailer asking for a hand out for that matter. But plenty of Americans owe money for purchases made with plastic at such venues, contributing to our economic woes.
Betzee at 11:50 PM JST - 24th November

This is a good summary of the situation:

It is not just a housing bubble that crashed. It was the excessive debt loads in housing, credit cards, student loans, car loans, corporate bonds, government bonds at all levels and all the other kinds of debt that have caused the crash. The unprecedented levels of debt incurred by households have finally driven them to their knees.

Households incurred those debt levels because their incomes did not keep up with the cost of living. (And Wall St cheered as their jobs were out-sourced, cut completely and/or their wages reduced or kept flat because it increased 'profits.') Their incomes did not keep up because nearly all the gains in productivity and profits were channeled to the upper 2%. Between 2003-05, the after-tax income of the top 1% went up 43% - and the incomes of the bottom 90% stayed flat or fell. The only choice for at least 80% of households to even begin to cover their expenses was to borrow.

Banks aren't lending to businesses that want to expand or take on new people, and won't be until to make loans period until they get a handle on their bad loan portfolios. Soooo the only party which can get the economy moving again is the government. It will have to hire people, through public works programs, whom the private sector can't absorb.
GJDailleult at 11:52 PM JST - 24th November

Quick search of "Goolsbee" and "dithering" shows sarge was right in his most recent post, Goolsbee was talking about the Bush administration. I thought he was comparing the Obama transition to the Clinton transition. Personally, if he was talking about Bush, I don't think dithering is the right word or particularly fair. The Bush administration has simply been trying to deal with something they didn't see coming (whether they should have seen it coming is another question). Does make sarge's original post of "why has there been dithering up until now?" look a bit odd though.